A new republican controlled congress and Trump administration could quickly aim to roll back the Consumer Financial Protection Bureau’s disparate impact guidelines — which are intended to mitigate minority discrimination in auto finance — said Chris Stinebert, president and chief executive of the American Financial Services Association.
Senate Bill 2663 would rescind the guidelines and specifically the Bayesian Improved Surname Geocoding (BISG) methodology that has been bemoaned by auto lenders since it was introduced for being too inaccurate, Stinebert explained during Used Car Week’s Subprime Forum.
“That bill is now over in the Senate and we’ve notified CFPB that we’re working with our colleagues at the auto dealer groups to seek a vote on that legislation,” Stinebert said. “We’re hopeful we’ll get more democratic support than we would have (before the election). We’re going to push for a vote during lame duck sessions because we think we have a good chance of getting that passed this time.”
Passage would require the CFPB to start over on those guidelines Stinebert added. However it’s unclear what exactly would replace the BISG method, if anything at all.
The bill does require a period of comment before issuing guidelines in their final form, which could be used to come up with a different solution than the BISG model.
If passed, the law would also require consultation with the Board of Governors of the Federal Reserve System, the Federal Trade Commission, and the Department of Justice before passage of guidelines, as well as a cost benefit analysis to the effect such rules would have on businesses.
