OFFICIALS LEGISLATION INTEREST GROUPS PUBLIC STATEMENTS COMMITTEES VETOES

Reforming CFPB Indirect Auto Financing Guidance Act

Floor Speech

Date: Nov. 18, 2015
Location: Washington, DC
Issues: Business and Consumers

BREAK IN TRANSCRIPT

I rise in strong opposition to H.R. 1737.

Mr. Chairman, this legislation is yet another attempt to obstruct the most important watchdog working on behalf of U.S. consumers, the CFPB.

Since its creation, the agency has returned over $11 billion to more than 25 million consumers harmed by unfair and deceptive practices. Its work is absolutely essential for everyday Americans, giving them the security of knowing that there is someone on their side.

One area where the CFPB's role is increasingly important is auto finance, where outstanding car and truck loan balances now reach $1 trillion, the highest in history.

Unfortunately, discrimination is still alive and well in the indirect auto lending marketplace. In the three settlements to date against Ally Financial, Fifth Third Bank, and Honda, the CFPB secured nearly $140 million in borrower relief and penalties. It found that minority borrowers paid $200 more over the life of a car loan than White borrowers, even when controlling for borrowers' creditworthiness.

The CFPB's findings are consistent with decades of litigation and research that confirm that discretionary markups in indirect auto lending cause millions of dollars in overpayments from minority borrowers. To further their work in this area, the CFPB issued specific guidance regarding auto lending practices.

Unfortunately, H.R. 1737 will repeal this guidance and place absurd restrictions on the reissuance of any new guidance. These new restrictions would be unique to the CFPB and would place an unprecedented burden on the agency's issuance of guidance designed to help lenders comply with Federal fair lending laws. This undermines the basic role of the CFPB and will create uncertainty regarding the application of Federal lending laws in the auto finance sector.

BREAK IN TRANSCRIPT

Ms. VELÁZQUEZ. Doing so is a raw deal for car buyers, especially minorities, who continue to fall victim to deceptive and unfair practices.

Let's let the CFPB do what it is supposed to do--protect the millions of consumers that will buy cars this year--and reject H.R. 1737. I urge a ``no'' vote on this misguided legislation.

BREAK IN TRANSCRIPT


Source
arrow_upward