Cramer Supports Passage of Congressional Review Act Disapproving CFPB's Indirect Auto Financing Guidance

Statement

Congressman Kevin Cramer commended the passage of the bipartisan Congressional Review Act (CRA) to reverse the Consumer Financial Protection Bureau's (CFPB) March 2013 announcement on indirect auto lending and compliance with the Equal Credit Opportunity Act. The resolution was passed by the House of Representatives today.

While the Dodd-Frank Act specifically excludes auto dealers from the CFPB's grasp, this regulation told financial institutions that have indirect lender relationships with auto dealers that they should either impose controls on dealer compensation policies or forbid dealer markup practices altogether. The CFPB's 2013 guidance pressured auto lenders to limit auto dealers' ability to discount credit for consumers. This hasty guidance would have increased the overall cost of auto loans for consumers.

Cramer said, "The Obama era guidance killed competition and fair lending for auto dealers that allowed customers to indirectly finance their car payments. The resolution would rescind the guidance that was based on a flawed assessment. If left in place, the poorly conceived rule could increase borrowing costs for folks buying cars, as though it's not difficult enough for working Americans to make ends meet."

Cramer heard from the Auto Dealers Association of North Dakota (ADAND), which supported this legislation. The Senate voted to pass this joint resolution on April 18, and the Executive Office of the President is encouraging President Trump to sign it into law.

The CRA provides an expedited legislative process for Congress to disapprove of administrative rules through joint disapproval resolutions. Regulations issued by executive branch departments and agencies, independent agencies and commissions, are subject to CRA disapproval resolutions. Under this law, there is a 60-day period in which to pass a resolution of disapproval from when the rule is reported to Congress. When both the Senate and House pass a disapproval resolution and the President signs it the rule either does not go into effect or is considered as not having gone into effect.

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