WASHINGTON–The House could vote as early as today on a resolution that would repeal 2013 guidance from the Bureau of Consumer Financial Protection (BCFP) on indirect auto lenders’ compliance with federal fair lending requirements.
The repeal has the support of the credit union trade associations, although it has been opposed by consumer groups.
CUNA said it “supports the joint resolution as small credit unions are harmed most by poorly tailored policymaking and CFPB bulletins should be subject to the CRA. Additionally, credit unions support using the CRA for indirect auto lending guidance,” CUNA President/CEO Jim Nussle wrote this letter in support of S. J. Res. 57.
The guidance provides the BCFP’s direction on the applicability of federal fair lending laws to “indirect” auto lending (loans facilitated by a car dealer through a third-party lender). It provides an overview of indirect auto lenders’ compliance with the fair lending requirements contained in the Equal Credit Opportunity Act (ECOA) and its implementing regulation, Reg B. The key issue is “buy rate,” or the practice by some indirect lenders to allow the dealer to mark up the interest rate on the loan.
When it announced its guidance in 2013 the Bureau said such policies mean much higher costs for people depending on race, national origin or other alleged biases.
In 2017, the GAO said the BCFP “guidance” was in fact a “rule” and thus subject to the 1996 Congressional Review Act. CRA allows Congress to overturn a rule within 60 business days of its effective date.
The Senate has already passed S.J.Res. 57. The House Rules Committee met on the measure yesterday and it is on the House schedule for today.