House committee, NADA press CFPB for internal documents
Both NADA and the House Financial Services Committee are pressuring the Consumer Financial Protection Bureau to release internal documents related to its allegations of auto loan discrimination against minorities.
Financial Services Committee Chairman Jeb Hensarling (R-Tex.) sent a letter to CFPB Director Richard Cordray asking for documents that showed how the bureau built its case against lenders for racial discrimination on auto loans. The Wall Street Journal first reported the story.
The letter also asks Cordray to make Patrice Ficklin, director of the Office of Fair Lending and Equal Opportunity, available for a transcribed interview. Ficklin is in charge of the CFPBês investigation of auto lending. If the committeeês requests are not met, a spokesman told the Journal it would consider subpoenas.
NADA made a Freedom of Information Act request for several internal documents referenced in articles in American Banker. NADA said the documents, as reported by American Banker, showed that the CFPB:
« based its understanding of the vehicle financing marketplace and dealer compensation on a discredited advocacy report;
« purposely decided to try to regulate the auto finance market through market-tipping enforcement actions; and
« persisted in using its disparate impact methodology even though the CFPB knew it was flawed. The CFPB has admitted that the methodology is flawed when used to analyze mortgages, but is much more accurate with other types of loans such as auto loans, according to the Wall Street Journal. A CFPB spokesman told the Journal that the American Banker reporting does not negate the allegations of discrimination.
Meanwhile, NADA continues to lobby for passage of HR 1737, which would revoke the CFPBês auto lending guidance and make the CFPBês research methodology public. The bill has bipartisan support, and NADA Chairman Bill Fox has told reporters he feels optimistic about passage.Download Bulletin PDF