CFPB rejects NADAês [I]Freedom of Information Act[/I] request
The Consumer Financial Protection Bureau has rejected NADAês Freedom of Information Act (FOIA) request to release a memo that appears to show that the agency is trying to regulate auto dealers, which is prohibited under the Wall Street Reform and Consumer Protection Act of 2010, also known as the Dodd-Frank law.
Three senior CFPB regulators were named in American Banker as the authors of a memo to director Richard Cordray showing how the recent regulator settlement with Honda Finance would help limit dealer discretion.
The significant limitation of dealer discretion, which in turn reduces fair lending risk, is one of the goals we have been seeking with respect to the indirect auto matters, and this settlement proposal attains that goal, the memo said, according to American Banker.
The CFPB memo appears to contradict statements by Cordray that the agency does not intend to target dealers through its enforcement actions. So NADA asked for the memo under FOIA. CFPBês FOIA manager told NADA the leaked memo was privileged information and denied the request.
NADA President Peter Welch criticized the agencyês response. The CFPB appears to be way outside the swim lane Congress authorized it to swim in, and an increasing number of Democrats and Republicans are justifiably concerned about the agencyês secrecy and its actions, he said. Ultimately, both the Reforming CFPB Indirect Auto Financing Guidance Act (legislation before Congress) and NADAês FOIA request are about ensuring government transparency and accountability on behalf of consumers, who simply canêt afford to be denied millions of dollars in potential savings without having a say in the matter, said Welch.Download Bulletin PDF