Representatives Frank Guinta (R-N.H.) and Ed Perlmutter (D-Colo.) introduced the Reforming CFPB Indirect Auto Financing Guidance Act of 2015, or H.R. 1737, last week. If passed, the legislation would repeal a Consumer Financial Protection Bureau bulletin from 2013 aimed at limiting the availability of auto finance discounts to consumers.
However, Attorney John Redding, partner at Buckley Sandler LLP, told Auto Finance News that if CFPB Bulletin 2013-02 were simply nullified, it is unlikely to have any meaningful impact on the activities of the CFPB or other agencies with respect to indirect auto finance, given the CFPB’s position that the bulletin simply clarifies existing law.
Along with rescinding CFPB Bulletin 2013-2 though, H.R. 1737 proposes additional requirements for the CFPB to follow a transparent process — including providing for a public comment period, consulting with the agencies that share jurisdiction over the indirect auto financing market, and disclosing its testing methodologies — prior to issuing any future guidance related to indirect auto credit.
“If passed, it will be interesting to see whether the CFPB continues the process of issuing guidance as it has in the past,” Redding said. “Given the requirement for public notice and comment, along with publication of information relied on in preparing the guidance. That said, given the CFPB’s stated goal of transparency, this would be a welcome change and consistent with that goal.” The proposed bill was assigned to a congressional committee Monday that will consider it before possibly sending it on to the House.
Learn more about risk and compliance in auto finance May 18 and 19 at the Auto Finance Risk & Compliance Summit 2015 in San Diego. Register here.Like This Post