NADA praises House passage of Financial Choice Act
NADA praised the House for passing H.R. 10, the Financial Choice Act, a comprehensive financial reform bill that rolls back much of Dodd-Frank and cuts back the power of the Consumer Financial Protection Bureau (CFPB). NADA said the bill offers relief for consumers facing the prospect of higher costs for financing vehicle purchases.
The bill, which passed by a mostly party-line vote, includes a provision that is virtually identical to H.R. 1737, a NADA-backed bill from the last Congress. That provision would nullify the CFPBês guidance on indirect auto financing, which tried to eliminate a dealerês ability to discount credit in the showroom.
H.R. 10 also requires the Bureau to: provide public notice and comment before issuing any additional auto-financing guidance; make publicly available all studies, data, methodologies or other information relied on to produce the guidance; and study the costs and impact of the guidance. The Choice Act also brings the CFPB under the congressional appropriations process for the first time, another reform NADA has long supported.
Americaês franchised new-car dealers have always been on the side of our customers, which is why we have so strenuously opposed the CFPBês anti-consumer guidance that would have raised the cost of car and truck loans and pushed otherwise-creditworthy customers out of the auto credit market altogether, said NADA Chairman Mark Scarpelli.
The Choice Act as written has almost no chance in the Senate, as Democrats oppose it strongly. Some Senators are reportedly working on their own version of Dodd-Frank reform.
Separately, the U.S. Treasury issued a report calling for a strong curtailment of the CFPB and saying the president should be able to fire the director.
The Bureauês unduly broad regulatory powers have led to predictable regulatory abuses and excesses, the report said. The CFPBês approach to rulemaking and enforcement hindered consumer access to credit, limited innovation and imposed unduly high compliance burdens, particularly on small institutions.Download Bulletin PDF