Financial Services and General Government Appropriations Act, 2017

Floor Speech

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Ms. MAXINE WATERS of California. I thank Mr. Serrano for yielding.

You just described this as a shot across the bow to the Consumer Financial Protection Bureau, and you are absolutely right. They are attempting to tell them not to bring fair lending cases against indirect automobile finance companies.

This amendment is about protecting wrongdoers who gouge racial and ethnic minorities with high markups on car loans even when their income, their credit scores, and their financial backgrounds are the same as Whites. The amendment is about protecting companies like Ally Financial, Fifth Third Bank, Honda and Toyota Motor Credit, all of whom have had to enter into settlements with the Bureau over their indirect auto loan practices.

All told, the CFPB, again, has secured nearly $162 million in borrower relief and penalties to help these borrowers. In their investigations, the Bureau found that minority borrowers paid more than $200 over the life of a car loan than White borrowers, even when controlling for borrowers' creditworthiness.

Studies have shown that minority borrowers are less likely to be aware of interest rate markups. According to the Center for Responsible Lending, 68 percent of all borrowers were unaware that dealers have the ability to mark up an interest rate above what a lender offers based on their creditworthiness and the car being sold, but nearly 75 percent of African American and Hispanic borrowers are unaware that the practice of dealer markups even exists.

The guidance that this amendment seeks to nullify clearly outlines steps that lenders can take to protect borrowers from potentially discriminatory lending practices that often occur without the borrower even being aware of it occurring. So we know what the intent of this amendment is, but on a practical level, the amendment will only invite confusion into the industry.

After all, this amendment does nothing to address lenders' obligations under the Equal Credit Opportunity Act. Instead, the amendment only strikes guidance the CFPB has provided to those lenders providing clarity on how they can meet their obligations under the law. The issue has come up before in this Congress, but no matter where you stood on H.R. 1737, a bill we considered last year, you should be against this amendment.

To the Members on the opposite side of the aisle, you are supposed to have a poverty agenda, and you claim that you are taking on a new direction, that you want to have reduced poverty and deal with the problems of minorities and people in rural communities, et cetera.

This is what keeps poverty in these communities. We have these blue suede, slick dealers of all kinds--whether they are automobile lenders or payday loans or auto loans, all of this stuff--coming into these communities, taking advantage of the most vulnerable people who want to get out of poverty.

You say you want to help, but then you come in and you attack the Consumer Financial Protection Bureau. You hate the Consumer Financial Protection Bureau. You want to do everything to undermine their authority. Announcement by the Acting Chair

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