Vehicle financing continued to be one of the more bandied about topics on Capitol Hill in recent days.

First, a member of the U.S. Senate introduced legislation to bring what the National Automobile Dealers Association called “transparency and accountability” to the Consumer Financial Protection Bureau's regulation of the auto finance market.

Then during a hearing lasting more than three hours, CFPB director Richard Corday asserted that Rep. Jeb Hensarling, chairman of the U.S. House Financial Services Committee had the matter “exactly backwards” when the two individuals clashed again over the agency’s investigation and $80 million enforcement action against Ally Financial more than two years ago.

During a six-minute exchange that can be seen in the video at the top of this page, Hensarling peppered Cordray about internal CFPB documents the committee used to generate multiple reports about how the bureau handled the investigation involving Ally. The Texas Republican also tried to use a review of salary figures of various CFPB staff members to question Cordray about the validity of disparate impact, a legal theory the bureau has used not only against Ally but other large players in the auto finance market.

At the outset of the hearing, Hensarling reiterated concerns about the depth of power held by the CFPB.

“As Thomas Jefferson once warned, government agencies are sending ‘swarms of officers to harass our people, and eat out their substance,’” the chairman said in his opening statement of the hearing that can be watched in its entirety here.

“Today, the poster child of Jefferson’s lament is the CFPB,” Hensarling continued. “Its director, our witness, is neither elected nor accountable to the American people. Yet when it comes to consumer financial products, he is vested with the awesome power of the entire United States Congress. This is amazing, frightening and tragic.”

As he did throughout his testimony on Wednesday, Cordray defended the actions of the CFPB, highlighting that the bureau has announced orders through enforcement actions for approximately $5.8 billion in total relief for consumers “who fell victim to various violations of consumer financial protection laws,” along with over $153 million in civil money penalties. 

Those figures do not stem solely from the auto finance market, but more than a dozen House members questioned Cordray about it during the hearing, revisiting how the financing process is completed at the dealership and how the CFPB determines whether or not discrimination is happening by finance companies.

One lawmaker who came to the CFPB’s defense was Rep. Maxine Waters, a California Democrat and the committee’s ranking member. Waters not only applauded Cordray’s relief and enforcement figures, she cheered the bureau’s actions in the auto finance space.

“The bureau has also led the charge against the discrimination that still exists in the auto lending industry. We should be doing all we can to prevent minority borrowers from being charged higher interest rates and from overpaying on their auto loans,” Waters said in her opening statement.

“Unfortunately, too many members of Congress have been misled by Republican arguments against the data and methodology used by the CFPB in this important work,” she continued. “While Republicans are attempting to protect lenders, the bureau has fined banks and captive lenders such as Toyota, Honda and Fifth Third Bank for discriminatory practices.”

“Despite a successful track record of helping consumers — whether looking to buy a car, own a home, or attend college — Republicans have turned the CFPB into a political punching bag, attempting to undermine its work at every turn,” Waters went on to say.

“This tactic is at odds with the public’s support for the CFPB and the bureau’s efforts to remain accountable and transparent,” she added.

Perhaps another Republican Waters referenced resides in the upper chamber of Capitol Hill.

Sen. Jerry Moran, a Kansas Republican and member of the Senate Banking, Housing and Urban Affairs Committee, introduced S. 2663, which is dubbed the “Reforming CFPB Indirect Auto Financing Guidance Act.” The measure would require the CFPB to withdraw what NADA described as the “flawed guidance” that attempts to eliminate a dealer's ability to discount auto financing for consumers.

NADA added that the legislation also requires the minimal safeguards the agency failed to follow, such as public participation and transparency. Nothing in the bill would restrict the CFPB’s ability to enforce fair credit laws in auto financing, according to the association.

The dealer group added that the bill is identical to legislation introduced by Reps. Frank Guinta, a New Hampshire Republican, and Ed Perlmutter, a Colorado Democrat, which passed in the House last November by an overwhelmingly bipartisan vote of 332-96. The Guinta-Perlmutter bill (H.R. 1737) won the support of 244 Republicans and 88 Democrats.

“Every consumer deserves access to competitive financing and great rates when they buy a new car or truck, but the CFPB’s misguided policy of eliminating consumer discounts on auto loans is making financing more expensive and harming many of the very people the agency is trying to help,” NADA president Peter Welch said.

“Fortunately for consumers, there is strong bipartisan support in Congress for protecting consumers’ rights and consumer savings by repealing the CFPB’s flawed guidance, and we commend Senator Moran for his leadership on this issue,” Welch added.

Meanwhile, NADA isn’t the only organization working with federal lawmakers to change how the CFPB operates.

Before this week’s hearing featuring Cordray, a bipartisan group of 329 House members sent a letter to the CFPB director urging the bureau to use its rulemaking exemption authority to protect credit unions and other community-based financial institutions from provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).

The letter by Reps. Adam Schiff, a California Democrat and Steve Stivers, an Ohio Republican was fully supported by the Credit Union National Association (CUNA), state-based credit union association leagues and member credit unions.

“On behalf of our credit unions and the 105 million members we represent, we thank Reps. Schiff and Stivers for their leadership on this vitally important matter,” CUNA president and chief executive officer Jim Nussle said. “We are grateful that a great bipartisan majority of members of the House believe the CFPB should use the authority they granted it to exempt credit unions from the Act.”

“The letter to director Cordray and the extensive support it has attracted represents a successful deployment of CUNA's 360-degree advocacy to remove barriers and optimize the operating environment for all credit unions,” Nussle continued.

The lawmakers who authored the letter shared a similar refrain.

“Credit unions and community banks do not pose any systemic risk, yet the CFPB continues to issue rules that disproportionately hurt those community financial institutions,” Stivers said. “These unnecessary and costly regulatory burdens have limited the ability of families and job creators to get access to needed credit and caused community institutions to become too small to survive."

Schiff added, “Credit unions play an integral role in our financial system by helping everyday consumers and businesses access credit at a local level. The CFPB should study and take into account the added burdens placed on credit unions and community banks when issuing new regulations, as these organizations are often disproportionately impacted.”