Reforming CFPB Indirect Auto Financing Guidance Act

Floor Speech

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Mr. Chairman, in full disclosure, my name is Williams, as Mr. David Scott had said. I am also an auto dealer, but my colleagues here in the House already know that. It is not something I am ashamed of. In fact, it is something I am very proud of.

But Mr. Guinta's bill isn't just about auto dealers. It is about an agency that continues to act not in the best interest of the consumer, but bigger government.

Well, Mr. Chairman, I am here this afternoon to give you a little perspective on that. As many small-business owners can tell you, the financial crisis of 2008 was the worst they had ever seen. Millions of Americans and thousands of small-business owners never recovered.

In response, Congress passed the Dodd-Frank Act, which, in turn, created the CFPB. The CFPB was given broad jurisdiction over the financial services sector: banks, insurance companies, mortgage lenders, credit card companies, payday lenders. The list goes on and on and on.

Dodd-Frank consisted of 2,300 pages of new laws and regulations. Mr. Chairman, I want to take a second and read from one of the sections of Dodd-Frank that has particular importance to us today. Section 1029 says:

The Bureau may not exercise any rulemaking, supervisory enforcement or any authority, including any authority to order assessment, over a motor vehicle dealer that is predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both.

So how did we get here today? In 2013, the CFPB didn't propose a new rule or a new regulation. In fact, they didn't seek comments from industry, consumers, or even Congress. But, instead, they offered guidance.

Since releasing this guidance in 2013, the CFPB has acknowledged that they did not analyze or estimate the economic impact it would have on customers. In addition,

an independent study commissioned by the American Financial Services Association found several significant flaws in the Bureau's methodology, which led to inaccurate, incomplete, and unreliable conclusions about pricing disparities in the auto finance market.

In addition, recent settlements from the CFPB and lenders have highlighted the Bureau's strong-arm tactics and inability to prevent fraudulent claims. At a hearing a few months ago, the Committee on Financial Services heard testimony about the lack of oversight implemented by the CFPB when paying claims to those who were potentially discriminated against.

Mr. Chairman, what most don't understand is that auto dealers--I repeat--auto dealers--are driven by competition. We are driven by protecting our reputation, providing service to our customers, and serving our communities.

When the CFPB issues fines on auto lenders for alleged discriminatory practices, they don't punish the dealers. They punish the consumer, the very people they are trying to supposedly protect, just as most government involvement does.

Mr. Guinta's bill would finally bring transparency and clarification to a process that has had neither.

Mr. Chairman, I know Director Cordray and all those at the CFPB think they can control my industry by controlling the lenders we do business with. But let's not lose sight on what the law says.

I urge passage of H.R. 1737. Let your conscience be your guide.

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