The Government Accountability Office (GAO) said the Consumer Financial Protection Bureau (CFPB)’s 2013 auto lending guidance should have been sent to Congress for review and must be sent for review now. That 2013 guidance from the CFPB advises indirect lenders to impose controls on dealer markups of auto loans to avoid even unintentional discrimination. It was seen by many in the industry as regulatory overreach.
Republicans in Congress have been anxious to curb the powers of the CFPB since it was created. In this case, Sen. Pat Toomey (R-PA) had asked the GAO to review the indirect lending rule.
“GAO’s decision makes clear that the CFPB’s back-door effort to regulate auto loans, which was based on a dubious legal justification, did not comply with the Congressional Review Act,” said Toomey. “I intend to do everything in my power to repeal this ill-conceived rule using the Congressional Review Act.”
The GAO advice means the CFPB needs to send the 2013 guidance back to Congress for review, after which the GAO, under the direction of President Trump’s interim director, Mick Mulvaney, will likely continue monitoring the situation.