Legislation authored by U.S. Sens. Pat Toomey (R-PA) and Jerry Moran (R-KS) was signed into law by President Donald Trump this week, repealing a Consumer Financial Protection Bureau (CFPB) regulation governing “indirect auto lending.”
Toomey and Moran used a Congressional Review Act to eliminate a 2013 CFPB overstep on “indirect auto loans,” which is financing offered to a car buyer through an automobile dealer instead of through the consumer’s bank or credit union.
When the 2010 Dodd-Frank financial reform law created the CFPB, Congress prohibited the bureau from regulating auto dealers. In 2013, CFPB published a guidance document as a way to work around the initial ban. The document threatened the ability of auto dealers to negotiate the terms of indirect auto loans with their customers and was also used to sanction auto financing companies.
While the House of Representatives passed a bill in 2015 to repeal the CFPB guidance document, further action was not taken before the 114th session of Congress expired.
“Throughout his tenure at the CFPB, Richard Cordray routinely thumbed his nose at the public and Congress by overstepping his authority,” Toomey said. “This auto lending guidance is a clear example of this. I’m pleased that the GAO understood that this guidance was, in fact, a rule and that both the House and Senate used the CRA to roll it back.”
Pennsylvania auto dealers supported the Toomey-Moran legislation. This law marks the 16th time Trump and Congress have used a Congressional Review Act to repeal Obama-era rules.