Rep. Zeldin’s Measure to Preserve Affordable Auto Lending Credit Heads to President’s Desk for Signature Into Law

LongIsland.com

Bill to end flawed CFPB edict passes House, Zeldin says.

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NY Congressman Lee Zeldin.

Photo by: Lee Zeldin via YouTube.

Long Island, NY - May 9, 2018 - Congressman Lee Zeldin’s (R, NY-1) House Joint Resolution 132, the House companion to Senate Joint Resolution 57, which passed the Senate on April 18, passed the House of Representatives today by a vote of 234-175. This measure, which now heads to President Trump’s desk for his signature into law, utilizes the Congressional Review Act to repeal ill-founded guidance issued by the Consumer Financial Protection Bureau (CFPB) relating to the indirect auto lending market. Indirect auto loans, as opposed to direct auto loans offered by banks or financial institutions, are loans offered to automobile buyers in the dealership where they are purchasing the vehicle. In an attempt to shut down the indirect auto lending market, the CFPB issued flawed guidance based on questionable “disparate impact” statistics, falsely accusing automobile dealerships and the financial institutions they work with of unproven discrimination. The CFPB, through its own admission, noted a 20% error rate in its own data, and an independent audit of the data used to justify this ruling showed an error rate as high as 41%.
 
“By cutting off the ability of auto lenders to provide discounted auto loans to their customers, the CFPB harms so many low- and lower middle-income borrowers who are seeking auto loans, the same people they are claiming to protect,” said Congressman Lee Zeldin. “Those with low or poor credit find themselves unable to obtain an auto loan to buy a vehicle that would allow them to get to their job, drop their children off at school, and improve the poor credit that disqualifies them from an auto loan in the first place. Local auto dealerships work to provide the appropriate loans that fit their customer’s needs. However, the CFPB in tying the hands of local auto dealers, is hindering their ability to tailor these essential financial products. In a typical government knows best approach, the CFPB is trying to take control of the auto lending market and in doing so their flawed one-size-fits-all proclamation hurts, not helps, consumers.”
 
“H.J.Res. 132 continues the bipartisan effort that began years ago to preserve the ability of local dealerships to offer discounted auto loans to their customers, and we thank Rep. Zeldin for his leadership on this issue,” said National Automobile Dealers Association President and CEO Peter Welch. “America’s franchised auto dealers strongly believe that every customer deserves to be treated fairly, and that there is no room for discrimination of any kind in auto retailing – period. This is a narrowly tailored resolution that in no way modifies or affects the enforcement of any fair credit laws or regulations. But it does take the important step of ensuring that consumer discounts in auto lending are safeguarded for every consumer.”
 
“It’s critical that we preserve consumer discounts in auto financing, and we are grateful for Rep. Zeldin’s efforts to ensure that auto loans remain affordable for all consumers,” said Robert Vancavage, President of the New York State Automobile Dealers Association.
 
The Congressional Review Act, enacted in 1996, gives Congress the power to strike down a regulation issued by a federal agency through the passage of a joint resolution. Once a regulation is repealed through passage of a CRA resolution into law, federal agencies are barred from issuing a similar regulation in the future unless expressly authorized to do so by Congress.