Sen. Warren Rumored to Be Prepping CFPB Dealer Oversight Legislation
Senator Elizabeth Warren is planning legislation that will give regulatory agencies like the Consumer Financial Protection Bureau more authority over auto dealers, according to a report published today.
Citing a “source familiar with the discussions,” the report claims that Warren’s staff has already met with aides who work for Sens. Charles Schumer (D-N.Y.) and Mark Warner (D-Va.), among other Democratic Staffers.
The rumor might come as no surprise for those that listened to Warren’s speech at the Levy Institute’s 24th Annual Hyman P. Minsky Conference in Mid-April. In prepared remarks, Warren compared the landscape of the auto finance market to that of the pre-recession mortgage market, “with good actors and bad actors mixed together.”
The Democratic Senator from Massachusetts has long championed the CFPB. She helped to create the bureau in 2010, and targeted auto dealers specifically in a speech last month.
“Auto dealers got a specific exemption from CFPB oversight, and it is no coincidence that auto loans are now the most troubled consumer financial product,” Warren said. “Congress should give the CFPB the authority it needs to supervise car loans – and keep that $26 billion a year in the pockets of consumers where it belongs.”
Warren was referencing a January study from the Center for Responsible Lending, entitled Reckless Driving: Implications of Recent Subprime Auto Finance Growth, in regards to dealer mark-up, a claim that was refuted by the Washington Post’s Fact-Checker blog earlier this week.
Republicans have voiced displeasure with the consumer watchdog in recent months, and most recently introduced legislation aimed at repealing a CFPB bulletin from 2013 limiting the availability of auto finance discounts to consumers.
In March, Rep. Randy Neugebauer (R-Texas), chairman of the financial services subcommittee on financial institutions and consumer credit announced plans to introduce the “first of several bills” aimed at replacing the CFPB’s director position with a “bipartisan, five-member commission appointed by the president.”
In today’s report, Rep. Randy Neugebauer (R-Texas), is quoted as saying that CFPB officials are “a prime example of overreach.”
“Sen. Warren wants to ignore bipartisan recognition that the CFPB is overstepping its bounds with respect to auto dealers,” he said. “Unfortunately, this latest push is symptomatic of Sen. Warren’s desire to micromanage the financial choices of the American consumer.”
Today’s focus in the media on compliance in the auto finance industry comes just as we head into the final weeks before the May 18 start of the Auto Finance Risk & Compliance Summit, the industry’s only event dedicated to these important issues.
More details on the Auto Finance Risk & Compliance Summit, May 18-19 in San Diego, can be found at www.afrcs.com.
