WASHINGTON–The Federal Reserve has proposed revisions to Regulation M in order to clarify which auto dealers fall beneath its umbrella and which must comply with rules from the Consumer Financial Protection Bureau as part of the Consumer Leasing Act (CLA).
The Fed said it is seeking the clarifications under the CLA as the result of some overlap and confusion in the rulemakings, especially after the Dodd Frank Act, which created the CFPB, was passed in 2010.
The Fed continues to retain authority to issue rules for motor vehicle dealers that are “predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both, and are otherwise not subject to the Bureau’s regulatory authority.”
The Fed said it is further seeking to eliminate guidance related to “branches of foreign banks or leasing companies located in the United States.” That guidance is “inapplicable,” according to the Fed, in that it does not believe motor vehicle dealers intended to be covered by Reg M “operate in this way.”
The proposal will be issued for a 60-day comment period.