And they say letter writing is dead.
The old-fashioned form of communications is getting a lot of attention in the auto finance world lately as congressmen continue to send letters to Consumer Financial Protection Bureau president Richard Cordray asking for clarification on the bureau’s stance on auto lending.
The latest letter came from Rep. Spencer Bachus (R-Ala.) dated April 1, which mentioned a press conference held at the end of February with representatives from the CFPB. Bachus writes that on the call, three possible payment structures were deemed acceptable by the bureau — flat-fee, flat-percentage, or a hybrid of the two.
Bachus wasn’t happy with that.
“It should be noted that the Equal Credit Opportunity Act does not contain prohibitions on discretionary compensation mechanisms,” he writes. “Other than a potential flat fee or variation of it, please provide at least one example of a specific discretionary dealer compensation mechanism lenders can adopt.”
Bachus’s letter fellows one from Rep. Jeb Hensarling (R-Tex), chairman of the House Financial Services Committee, last month, which informed Corday that without significant explanation of the CFPB’s proxy methodology for disparate impact in auto finance, his committee would consider issuing subpoenas. As of now, no subpoenas have been issued. Requests for comment from the committee remain outstanding.
For his part, attorney Michael Thurman of Loeb and Loeb LLC says it “wouldn’t surprise [him] at all” if subpoenas were ultimately issued. What’s that line about the power of the pen?
Check out the Bachus letter here.
