Sen. Warren, ardent CFPB proponent to subject dealers to CFPB authority
The Consumer Financial Protection Bureau regulates auto lenders, like banks. By design, CFPB does not regulate auto loan arrangers, like auto dealers. When CFPB came into existence in 2010 as a result of the Dodd-Frank Finance Reform Law, NADA and others saw to it that auto dealers were not included in the reach of Dodd-Frank and its progeny, the CFPB, despite the efforts by plaintiffês lawyers and consumer advocates who favored the opposite result at the time. Now comes Sen. Elizabeth Warren (D-Mass.) who, according to The Hill is moving to introduce legislation to reverse the exemption of auto dealer credit arrangers under Dodd-Frank that would have dealers be subject to jurisdiction of CFPB like the banks are currently. In 2010 Professor Warren, a bankruptcy law scholar at Harvard Law School at the time, was an ardent proponent of CFPB under Dodd-Frank which included regulator coverage of auto dealers.
Many Republicans are critical of Warrenês effort, and the bill has very little chance of passing a Republican-controlled Congress. Critics point out that the CFPB was created to regulate the financial services industry and that dealers are already regulated by the Federal Trade Commission as well as the Federal Reserve, the Justice Department and state attorneys general.
I am skeptical of giving the CFPB more power when it refuses to answer Congressês questions regarding its treatment of auto dealers and consumers, said Rep. Frank Guinta (R-N.H.). Guinta is the author of H.R. 1737, a NADA-backed bill that would rescind the CFPBês guidance on auto loans.Download Bulletin PDF