Vote Explanation for The Reforming CFBP Indirect Auto Lending Guidance Act (H.R. 1737)

Rep. Beto O'Rourke
Nov 20, 2015 · 1 min read


Last time you bought a car you might have noticed an option to finance through the dealership. This is called indirect auto lending. In 2013, a new government agency called the Consumer Protection Financial Bureau (CFPB) issued guidance on indirect auto lending, saying that “disparate impact discrimination was evident” and that the dealerships should be held responsible for discriminatory lending practices.

This CFBP guidance was offered without public comment, review or examination of the data and methods used to decide the extent to which discriminatory lending is occurring. This lack of openness has created uncertainty, criticism of the CFPB’s conclusions, and has made loans more expensive to borrowers.

In an attempt to fix this, Wednesday the House of Representatives passed the Reforming CFBP Indirect Auto Lending Guidance Act (H.R. 1737). This bill requires more openness and transparency from the CFPB, requiring the agency to give the public a chance to comment and make all data, studies and methods used when offering guidance open to the public. This legislation also makes the CFBP consult with the Justice Department, the Federal Reserve and the Federal Trade Commission to create studies on the cost to consumers and minority and women-owned small businesses before issuing guidance.

These changes will make the CFBP more accountable and open to scrutiny when offering guidance.

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