CFPB roundup: Measures to remove auto finance guidance and Mulvaney on the Hill


In another busy week of activities associated with the Consumer Financial Protection Bureau, the American Financial Services Association joined with the National Automobile Dealers Association and other sister trade associations in supporting S.J. Resolution 57 to disapprove the CFPB’s 2013 auto finance guidance.

On March 22, Sen. Jerry Moran (R-Kan.) introduced S.J. Res. 57. This legislation has been co-sponsored by 20 senators. Then earlier this week, Rep. Lee Zeldin (R-N.Y.) introduced H.J Resolution 132, the House companion to S.J. Res. 57.

AFSA explained these two pieces of legislation are unique Congressional Review Act (CRA) resolutions. As such, these resolutions need only a simple majority to pass and cannot be filibustered in the Senate.

The associations reiterated that the CFPB auto financing policy, issued through guidance, directed fundamental market changes “without a transparent rulemaking process to assess the impact on consumers.

“This guidance was issued without any public comment, consultation with CFPB’s sister agencies or transparency,” AFSA continued in a statement.

“AFSA supports Sen. Moran and Rep. Zeldin for taking the lead on this initiative. A vote in Congress is possible later this month,” the organization went on to say.

NADA explained that it supports S.J. Res. 57/H.J. Res. 132 because the CFPB’s guidance pressured indirect auto finance companies to eliminate consumer discounts on auto credit by dealers. 

“This policy, issued without prior notice or public comment, would have raised credit costs for auto buyers,” NADA said.

“Additionally, many members of Congress view the CFPB’s guidance as a roundabout attempt to regulate dealers, despite the dealers’ statutory exemption from the CFPB’s jurisdiction (Sec. 1029(a) of Dodd-Frank).

Enactment of S.J. Res. 57/H.J. Res 132 would deter similar improper regulatory action in the future,” according to NADA, which also told dealers that they are encouraged to contact their senators and representatives to voice their support for this legislation.

Mulvaney on Capitol Hill

Also this week, acting director CFPB director Mick Mulvaney appeared during hearings orchestrated by both the House Committee on Financial Services as well as the Senate Banking Committee.

According to his written testimony to each chamber and shared by the CFPB, Mulvaney gave a compliance update that likely should please auto finance companies and dealerships large and small.

“In another change, the bureau practice of ‘regulation by enforcement’ has ceased,” Mulvaney told lawmakers. “The bureau will continue to enforce the law. That is our job, and we take it seriously.  However, people will know what the rules are before the bureau accuses them of breaking those rules.

“Through the changes I have discussed and others, I am making sure the bureau is operating within its statutory mandate, is accountable for its actions, and is doing the American people’s business in ways that are efficient and effective,” he continued.

Coinciding with his visits to Capitol Hill, the bureau issued a request for information (RFI) on its handling of consumer complaints and inquiries. The CFPB is seeking comments and information from interested parties to assist the bureau in assessing its handling of consumer complaints and consumer inquiries and, consistent with law, considering whether changes to its processes would be appropriate.

To date, the bureau said it has received 1.5 million consumer complaints.

This is the 12th in a series of RFIs announced as part of Mulvaney’s call for evidence to ensure the bureau is fulfilling its proper and appropriate functions.

“This RFI will provide an opportunity for the public to submit feedback and suggest ways to improve outcomes for both consumers and covered entities,” the CFPB said.

The series of RFIs coupled with other actions by the bureau under Mulvaney’s leadership frustrated Rep. Maxine Waters (D-Calif.), ranking member of the House Committee on Financial Services.

“Let me say at the outset that Mr. Mulvaney is not the acting director of the Consumer Financial Protection Bureau,” Waters said in her opening statement during this week’s hearing.

“He was illegally appointed by President Trump in a move that blatantly contradicts the Dodd-Frank statute, which is very clear that the deputy director of the agency shall serve as acting director in the case of absence or unavailability of the director,” she continued.

“I want to be very clear that Democrats’ participation in this hearing is not in any way an acknowledgment of Mr. Mulvaney’s legitimacy at the Consumer Bureau. Nonetheless, given the many impactful and indeed harmful decisions Mr. Mulvaney is making with regard to the Consumer Bureau, it is necessary for us to engage with him in an oversight capacity here today while the courts decide who should actually be in charge,” Waters went on to say.

The California lawmaker later added, “And it is very clear that Mr. Mulvaney is indeed carrying out this president’s agenda at the Consumer Bureau. He has taken a series of actions that weaken the agency’s ability to carry out its important mission and benefit the predatory actors that the agency is designed to police.”

Mulvaney’s appearance before the House contingent can be watched here or through the window at the top of this page.