Reforming CFPB Indirect Auto Financing Guidance Act

Floor Speech

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Mr. HILL. Mr. Chairman, I rise today in support of my colleague from New Hampshire on his bipartisan bill to reform and assist our Nation's auto dealers and consumers and increase the oversight and transparency of the Consumer Financial Protection Bureau.

Dodd-Frank explicitly prohibited the CFPB from regulating auto dealers, but their guidance on indirect auto lending is an end around to indeed do just that, regulate auto dealer sales.

Not only is the CFPB's guidance inherently flawed, but the agency has not provided the opportunity for public comment or input, nor have they shared any of their analysis or assumptions on which they based their model.

This guidance is another example of emerging government price regulation and fee setting in the financial services industry. We have always, as a part of our financial regulation, tried not to set price by regulatory directive. Instead, we have operated on a consumer disclosure and consumer education model.

But price regulation is clearly what this guidance does. It is softer and more delicate in its language, but it clearly is leading towards price regulation.

Consumer lending in banking is down among community banks. It has been cut in half over the past few years. One reason for that, one key reason for that, is the inability of a consumer bank to price for risk.

Today's legislation is not about discrimination. It is about giving access to credit to people who need it and giving access to credit to them in the right way, particularly those families with limited resources.

This bill in no way ties CFPB's hands. It merely gives the public an opportunity to comment on the Bureau's attempt to reshape the auto loan market.

Whether it is in a rural area or an urban area, this pernicious expansion of price regulation in financial services by the Federal Government will have a negative effect on credit allocation in our communities.

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