H. Rept. 114-329 - REFORMING CFPB INDIRECT AUTO FINANCING GUIDANCE ACT114th Congress (2015-2016)
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114th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 114-329
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REFORMING CFPB INDIRECT AUTO FINANCING GUIDANCE ACT
_______
November 9, 2015.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 1737]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 1737) to nullify certain guidance of the Bureau
of Consumer Financial Protection and to provide requirements
for guidance issued by the Bureau with respect to indirect auto
lending, having considered the same, report favorably thereon
without amendment and recommend that the bill do pass.
purpose and Summary
Introduced by Representative Guinta, H.R. 1737, the
``Reforming CFPB Indirect Auto Financing Guidance Act,''
repeals the Consumer Financial Protection Bureau's (CFPB's)
Bulletin 2013-02 titled Indirect Auto Lending and Compliance
with the Equal Credit Opportunity Act, which was published on
March 21, 2013. H.R. 1737 also requires the CFPB to follow a
transparent process when issuing subsequent auto finance
guidance.
Background and Need for Legislation
Bulletin 2013-02 provides guidance to indirect auto lenders
regarding fair lending risk under the Equal Credit Opportunity
Act (ECOA).\1\ While this bulletin does not purport to offer
guidance to auto dealers, which are explicitly exempted from
CFPB regulation under the Dodd-Frank Wall Street Reform and
Consumer Protection Act,\2\ it nevertheless raises significant
concerns that the CFPB is flouting this statutory limitation
because the bulletin's practical effect is to regulate dealers.
Furthermore, the bulletin raises concerns among auto lenders
because it asserts that ECOA allows for a ``disparate impact''
theory of liability in which a lender may be held liable for
discrimination where a facially neutral lending practice
disparately impacts minority borrowers, even where the lender
did not intend to discriminate against them. The bulletin
advises that, in order to avoid liability under ECOA, financial
institutions having indirect lender relationships with auto
dealers should either impose controls on dealer compensation
policies or forbid dealers from charging retail interest rates
on consumer auto loans altogether. Although the CFPB maintains
that its bulletins are non-binding guidance, it is
simultaneously aware that such guidance must be taken seriously
by market participants, because just the cost of being
subjected to a CFPB investigation, even if it does not result
in a CFPB enforcement action, is enormous. Accordingly, the
bulletin is tantamount to regulation, except without public
notice or opportunity for comment. By issuing guidance which it
knows will induce actionable reliance, the Bureau attempted to
force lenders to require dealers to adopt a ``flat fee''
compensation model. In doing so, the Bureau seeks to regulate
companies over which it has no statutory authority, and without
even providing the due process afforded regulated companies
under the Administrative Procedure Act.
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\1\See http://files.consumerfinance.gov/f/201303_cfpb_march_-Auto-
Finance-Bulletin.pdf.
\2\See Dodd-Frank Section 1029.
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What makes the CFPB's apparent disregard of its
jurisdictional limitations even more problematic is the
weakness of its statistical ``proof'' that auto dealers have
engaged in discriminatory lending. First, the CFPB does not
have verifiable evidence that borrowers are minorities or other
protected classes--it is illegal for auto dealers to collect
such information. The CFPB ``determined'' borrowers' race,
ethnicity, and gender, among other factors, by reviewing their
names and making conclusions using Bayesian probability, also
known as a ``proxy methodology''--in other words, the CFPB made
what it believed to be good guesses based on a number of
assumptions. Second, the extension of disparate impact theory,
which began in employment discrimination cases and was later
applied to housing discrimination cases, is problematic in the
context of ECOA and auto lending. The theory requires one to
assume that any statistically significant difference in
interest rates paid by borrowers of different races, genders,
or other protected characteristics must be the result of
discrimination. However, there potentially exist a number of
non-discriminatory explanations for certain groups paying
higher interest rates than others--for example, different car
model preferences, dealership locations, socio-economic
factors, and financial sophistication.
On June 20, 2013, 35 Members of the House of
Representatives wrote the CFPB seeking ``all studies, analysis,
and information it relied upon in developing its guidance
document'' and ``the full set of details concerning its
disparate impact methodology,'' including the proxies it used,
the factors held constant, the metric used to measure pricing
disparities, and the numerical threshold at which a pricing
disparity constitutes an ECOA violation. Over a year later, and
only after continuous pressure from Congress and industry
stakeholders, the CFPB released a white paper detailing its
disparate impact methodology for ascertaining fair lending
liability for indirect auto lenders.\3\ The white paper
described the CFPB's methodology for assessing disparate impact
liability.
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\3\http://files.consumerfinance.gov/f/201409_cfpb_report_proxy-
methodology.pdf. The Bureau's proxy method is known as the Bayesian
Improved Surname Geocoding method, or BISG.
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The CFPB's methodology has drawn significant criticism,
including by the American Financial Services Association, which
commissioned Charles River Associates (CRA) to review the
Bureau's white paper. The CRA study, which was released on
November 19, 2014, found significant flaws in the CFPB's proxy
methodology.\4\ Based on 8.2 million vehicle contracts
originated in 2012 and 2013, the study showed that the CFPB's
proxy method overestimates minorities by as much as 41 percent,
which calls into question the reliability of the CFPB's
results. On the heels of the publication of the CRA study,
industry stakeholders vociferously called for the CFPB to
review its testing methodology, correct any errant bias, and
release the findings of its revised methodology for public
review before pursuing further action on the matter.
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\4\http://www.afsaonline.org/news_and_publications/
vehicle_finance_study.cfm.
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Hearings
The Committee on Financial Services' Subcommittee on
Financial Institutions held a hearing examining matters
relating to H.R. 1737 on April 15, 2015.
Committee Consideration
The Committee on Financial Services met in open session on
July 28, 2015 and July 29, 2015, and ordered H.R. 1737 to be
reported favorably to the House without amendment by a recorded
vote of 47 yeas to 10 nays (recorded vote no. FC-55), a quorum
being present.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
sole record vote in committee was a motion by Chairman
Hensarling to report the bill favorably to the House without
amendment. The motion was agreed to by a recorded vote of 47
yeas to 10 nays (Record vote no. FC-55), a quorum being
present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the committee based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee states that H.R. 1737
will provide for the regulation of the auto loan industry
pursuant to methodologically sound principles by (1) repealing
the CFPB's Bulletin titled ``Indirect Auto Lending and
Compliance with the Equal Credit Opportunity Act'' (Bulletin
2013-02) and (2) requiring that the CFPB formulate any future
guidance addressing the same subject based on public input
after releasing the data and analysis supporting the proposed
guidance, and after conducting a study on the costs and impacts
of the proposal to consumers and women-owned, minority-owned,
and small businesses.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimates
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington DC, October 14, 2015.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services, House of Representatives,
Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1737, the
Reforming CFPB Indirect Auto Financing Guidance Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susan Willie.
Sincerely,
Keith Hall.
Enclosure.
H.R. 1737--Reforming CFPB Indirect Auto Financing Guidance Act
H.R. 1737 would nullify a bulletin published by the
Consumer Financial Protection Bureau (CFPB) that provides
guidance to lenders who agree to finance the purchase of an
automobile through a dealership in compliance with the Equal
Credit Opportunity Act. The bill also would direct the CFPB,
when proposing new guidance on this topic, to follow certain
procedures to provide for public notice and to make all
studies, data, and analyses used in developing the guidance
available to the public.
Based on information from the CFPB, CBO expects the agency
would not prepare a replacement bulletin if H.R. 1737 were
enacted. Because the bill would not affect the underlying
statue or regulations to implement it, the Bureau can continue
to enforce the Equal Credit Opportunity Act without the
bulletin. Therefore, enacting H.R. 1737 would not affect the
federal budget. Because enacting the bill would not affect
direct spending or revenues, pay-as-you-go procedures do not
apply.
Enacting the bill would not increase net direct spending or
on-budget deficits by more than $5 billion in any of the four
10-year periods beginning in 2026.
H.R. 1737 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
The CBO staff contact for this estimate is Susan Willie.
The estimate was approved by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.
Earmark Identification
H.R. 1737 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Duplication of Federal Programs
Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015),
the Committee states that no provision of H.R. 1737 establishes
or reauthorizes a program of the Federal Government known to be
duplicative of another Federal program, a program that was
included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most
recent Catalog of Federal Domestic Assistance.
Disclosure of Directed Rulemaking
Pursuant to section 3(k) of H. Res. 5, 114th Cong. (2015),
the Committee states that H.R. 1737 contains no directed
rulemaking.
Section-By-Section Analysis of the Legislation
Section 1. Short title
This Section cites H.R. 1737 as the ``Reforming CFPB
Indirect Auto Financing Guidance Act''
Section 2. Nullification of auto lending guidance
This section states that Bulletin 2013-02 of the Bureau of
Consumer Financial Protection (published March 21, 2013) shall
have no force or effect.
Section 3. Guidance requirements
This section amends Section 1022(b) of the Consumer
Financial Protection Act of 2010 (12 U.S.C. 5512(b)) to provide
that when proposing and issuing guidance primarily related to
indirect auto financing, the CFPB must provide opportunity for
public input and make the data and analysis supporting the
proposed guidance publicly available subject to certain
redactions under the Freedom of Information Act. The section
further provides that the CFPB must consult with other federal
authorities and conduct a study on the costs and impacts of the
guidance to certain groups.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
CONSUMER FINANCIAL PROTECTION ACT OF 2010
* * * * * * *
TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION
* * * * * * *
Subtitle B--General Powers of the Bureau
* * * * * * *
SEC. 1022. RULEMAKING AUTHORITY.
(a) In General.--The Bureau is authorized to exercise its
authorities under Federal consumer financial law to administer,
enforce, and otherwise implement the provisions of Federal
consumer financial law.
(b) Rulemaking, Orders, and Guidance.--
(1) General authority.--The Director may prescribe
rules and issue orders and guidance, as may be
necessary or appropriate to enable the Bureau to
administer and carry out the purposes and objectives of
the Federal consumer financial laws, and to prevent
evasions thereof.
(2) Standards for rulemaking.--In prescribing a rule
under the Federal consumer financial laws--
(A) the Bureau shall consider--
(i) the potential benefits and costs
to consumers and covered persons,
including the potential reduction of
access by consumers to consumer
financial products or services
resulting from such rule; and
(ii) the impact of proposed rules on
covered persons, as described in
section 1026, and the impact on
consumers in rural areas;
(B) the Bureau shall consult with the
appropriate prudential regulators or other
Federal agencies prior to proposing a rule and
during the comment process regarding
consistency with prudential, market, or
systemic objectives administered by such
agencies; and
(C) if, during the consultation process
described in subparagraph (B), a prudential
regulator provides the Bureau with a written
objection to the proposed rule of the Bureau or
a portion thereof, the Bureau shall include in
the adopting release a description of the
objection and the basis for the Bureau
decision, if any, regarding such objection,
except that nothing in this clause shall be
construed as altering or limiting the
procedures under section 1023 that may apply to
any rule prescribed by the Bureau.
(3) Exemptions.--
(A) In general.--The Bureau, by rule, may
conditionally or unconditionally exempt any
class of covered persons, service providers, or
consumer financial products or services, from
any provision of this title, or from any rule
issued under this title, as the Bureau
determines necessary or appropriate to carry
out the purposes and objectives of this title,
taking into consideration the factors in
subparagraph (B).
(B) Factors.--In issuing an exemption, as
permitted under subparagraph (A), the Bureau
shall, as appropriate, take into
consideration--
(i) the total assets of the class of
covered persons;
(ii) the volume of transactions
involving consumer financial products
or services in which the class of
covered persons engages; and
(iii) existing provisions of law
which are applicable to the consumer
financial product or service and the
extent to which such provisions provide
consumers with adequate protections.
(4) Exclusive rulemaking authority.--
(A) In general.--Notwithstanding any other
provisions of Federal law and except as
provided in section 1061(b)(5), to the extent
that a provision of Federal consumer financial
law authorizes the Bureau and another Federal
agency to issue regulations under that
provision of law for purposes of assuring
compliance with Federal consumer financial law
and any regulations thereunder, the Bureau
shall have the exclusive authority to prescribe
rules subject to those provisions of law.
(B) Deference.--Notwithstanding any power
granted to any Federal agency or to the Council
under this title, and subject to section
1061(b)(5)(E), the deference that a court
affords to the Bureau with respect to a
determination by the Bureau regarding the
meaning or interpretation of any provision of a
Federal consumer financial law shall be applied
as if the Bureau were the only agency
authorized to apply, enforce, interpret, or
administer the provisions of such Federal
consumer financial law.
(5) Guidance on indirect auto financing.--In
proposing and issuing guidance primarily related to
indirect auto financing, the Bureau shall--
(A) provide for a public notice and comment
period before issuing the guidance in final
form;
(B) make available to the public, including
on the website of the Bureau, all studies,
data, methodologies, analyses, and other
information relied on by the Bureau in
preparing such guidance;
(C) redact any information that is exempt
from disclosure under paragraph (3), (4), (6),
(7), or (8) of section 552(b) of title 5,
United States Code;
(D) consult with the Board of Governors of
the Federal Reserve System, the Federal Trade
Commission, and the Department of Justice; and
(E) conduct a study on the costs and impacts
of such guidance to consumers and women-owned,
minority-owned, and small businesses.
(c) Monitoring.--
(1) In general.--In order to support its rulemaking
and other functions, the Bureau shall monitor for risks
to consumers in the offering or provision of consumer
financial products or services, including developments
in markets for such products or services.
(2) Considerations.--In allocating its resources to
perform the monitoring required by this section, the
Bureau may consider, among other factors--
(A) likely risks and costs to consumers
associated with buying or using a type of
consumer financial product or service;
(B) understanding by consumers of the risks
of a type of consumer financial product or
service;
(C) the legal protections applicable to the
offering or provision of a consumer financial
product or service, including the extent to
which the law is likely to adequately protect
consumers;
(D) rates of growth in the offering or
provision of a consumer financial product or
service;
(E) the extent, if any, to which the risks of
a consumer financial product or service may
disproportionately affect traditionally
underserved consumers; or
(F) the types, number, and other pertinent
characteristics of covered persons that offer
or provide the consumer financial product or
service.
(3) Significant findings.--
(A) In general.--The Bureau shall publish not
fewer than 1 report of significant findings of
its monitoring required by this subsection in
each calendar year, beginning with the first
calendar year that begins at least 1 year after
the designated transfer date.
(B) Confidential information.--The Bureau may
make public such information obtained by the
Bureau under this section as is in the public
interest, through aggregated reports or other
appropriate formats designed to protect
confidential information in accordance with
paragraphs (4), (6), (8), and (9).
(4) Collection of information.--
(A) In general.--In conducting any monitoring
or assessment required by this section, the
Bureau shall have the authority to gather
information from time to time regarding the
organization, business conduct, markets, and
activities of covered persons and service
providers.
(B) Methodology.--In order to gather
information described in subparagraph (A), the
Bureau may--
(i) gather and compile information
from a variety of sources, including
examination reports concerning covered
persons or service providers, consumer
complaints, voluntary surveys and
voluntary interviews of consumers,
surveys and interviews with covered
persons and service providers, and
review of available databases; and
(ii) require covered persons and
service providers participating in
consumer financial services markets to
file with the Bureau, under oath or
otherwise, in such form and within such
reasonable period of time as the Bureau
may prescribe by rule or order, annual
or special reports, or answers in
writing to specific questions,
furnishing information described in
paragraph (4), as necessary for the
Bureau to fulfill the monitoring,
assessment, and reporting
responsibilities imposed by Congress.
(C) Limitation.--The Bureau may not use its
authorities under this paragraph to obtain
records from covered persons and service
providers participating in consumer financial
services markets for purposes of gathering or
analyzing the personally identifiable financial
information of consumers.
(5) Limited information gathering.--In order to
assess whether a nondepository is a covered person, as
defined in section 1002, the Bureau may require such
nondepository to file with the Bureau, under oath or
otherwise, in such form and within such reasonable
period of time as the Bureau may prescribe by rule or
order, annual or special reports, or answers in writing
to specific questions.
(6) Confidentiality rules.--
(A) Rulemaking.--The Bureau shall prescribe
rules regarding the confidential treatment of
information obtained from persons in connection
with the exercise of its authorities under
Federal consumer financial law.
(B) Access by the bureau to reports of other
regulators.--
(i) Examination and financial
condition reports.--Upon providing
reasonable assurances of
confidentiality, the Bureau shall have
access to any report of examination or
financial condition made by a
prudential regulator or other Federal
agency having jurisdiction over a
covered person or service provider, and
to all revisions made to any such
report.
(ii) Provision of other reports to
the bureau.--In addition to the reports
described in clause (i), a prudential
regulator or other Federal agency
having jurisdiction over a covered
person or service provider may, in its
discretion, furnish to the Bureau any
other report or other confidential
supervisory information concerning any
insured depository institution, credit
union, or other entity examined by such
agency under authority of any provision
of Federal law.
(C) Access by other regulators to reports of
the bureau.--
(i) Examination reports.--Upon
providing reasonable assurances of
confidentiality, a prudential
regulator, a State regulator, or any
other Federal agency having
jurisdiction over a covered person or
service provider shall have access to
any report of examination made by the
Bureau with respect to such person, and
to all revisions made to any such
report.
(ii) Provision of other reports to
other regulators.--In addition to the
reports described in clause (i), the
Bureau may, in its discretion, furnish
to a prudential regulator or other
agency having jurisdiction over a
covered person or service provider any
other report or other confidential
supervisory information concerning such
person examined by the Bureau under the
authority of any other provision of
Federal law.
(7) Registration.--
(A) In general.--The Bureau may prescribe
rules regarding registration requirements
applicable to a covered person, other than an
insured depository institution, insured credit
union, or related person.
(B) Registration information.--Subject to
rules prescribed by the Bureau, the Bureau may
publicly disclose registration information to
facilitate the ability of consumers to identify
covered persons that are registered with the
Bureau.
(C) Consultation with state agencies.--In
developing and implementing registration
requirements under this paragraph, the Bureau
shall consult with State agencies regarding
requirements or systems (including coordinated
or combined systems for registration), where
appropriate.
(8) Privacy considerations.--In collecting
information from any person, publicly releasing
information held by the Bureau, or requiring covered
persons to publicly report information, the Bureau
shall take steps to ensure that proprietary, personal,
or confidential consumer information that is protected
from public disclosure under section 552(b) or 552a of
title 5, United States Code, or any other provision of
law, is not made public under this title.
(9) Consumer privacy.--
(A) In general.--The Bureau may not obtain
from a covered person or service provider any
personally identifiable financial information
about a consumer from the financial records of
the covered person or service provider,
except--
(i) if the financial records are
reasonably described in a request by
the Bureau and the consumer provides
written permission for the disclosure
of such information by the covered
person or service provider to the
Bureau; or
(ii) as may be specifically permitted
or required under other applicable
provisions of law and in accordance
with the Right to Financial Privacy Act
of 1978 (12 U.S.C. 3401 et seq.).
(B) Treatment of covered person or service
provider.--With respect to the application of
any provision of the Right to Financial Privacy
Act of 1978, to a disclosure by a covered
person or service provider subject to this
subsection, the covered person or service
provider shall be treated as if it were a
``financial institution'', as defined in
section 1101 of that Act (12 U.S.C. 3401).
(d) Assessment of Significant Rules.--
(1) In general.--The Bureau shall conduct an
assessment of each significant rule or order adopted by
the Bureau under Federal consumer financial law. The
assessment shall address, among other relevant factors,
the effectiveness of the rule or order in meeting the
purposes and objectives of this title and the specific
goals stated by the Bureau. The assessment shall
reflect available evidence and any data that the Bureau
reasonably may collect.
(2) Reports.--The Bureau shall publish a report of
its assessment under this subsection not later than 5
years after the effective date of the subject rule or
order.
(3) Public comment required.--Before publishing a
report of its assessment, the Bureau shall invite
public comment on recommendations for modifying,
expanding, or eliminating the newly adopted significant
rule or order.
* * * * * * *
MINORITY VIEWS
H.R. 1737 would nullify the Consumer Financial Protection
Bureau's (``CFPB'' or ``Bureau'') March 2013 bulletin
(``Bulletin'') that clarifies the Bureau's authority to
regulate indirect auto lenders under the Equal Credit
Opportunity Act (``ECOA'') and that establishes its supervisory
and enforcement expectations concerning indirect auto lender
compliance with ECOA's fair lending requirements. In nullifying
the Bulletin, H.R. 1737 seeks to impose unprecedented
restrictions on the Bureau's issuance of important regulatory
guidance and is unnecessary in light of the Bureau's Summer
2014 white paper explaining its methodology for identifying
violations of ECOA and its implementing regulation, Regulation
B.
The intent of H.R. 1737 is to send a clear message from
Congress to the CFPB that lawmakers disapprove of the Bureau's
recent actions to root out discriminatory practices among auto
lenders. However, Members of Congress who were supportive of
the creation of the CFPB and its mission believe enforcing
these fair lending laws is precisely what the Bureau was
designed to do. To date, the CFPB has reached settlements with
several large lenders that have agreed to improve their fair
lending compliance and return money to harmed consumers. The
Bureau has provided thorough and timely information to Congress
on these enforcement actions.
During the 113th Congress, similar legislation was proposed
(H.R. 5403) and two separate inquiries from House Democrats and
Republicans were made questioning the Bulletin and requesting
details concerning the process that the Bureau uses to identify
potential fair lending violations. The CFPB responded in Summer
2014 with a white paper responsive to the concerns raised by
members that provides extensive detail into its methodology for
identifying and analyzing potential fair lending violations.
The Bulletin provides important guidance on the Bureau's
supervisory and enforcement expectations for indirect auto
lenders. If enacted, H.R. 1737 would nullify guidance that to
date has been helpful to regulated entities as they develop and
refine their fair lending compliance management programs. H.R.
1737 does not alter regulated entities' obligations under ECOA
or the CFPB's examination or enforcement activity pursuant to
ECOA. Consequently, the practical effect of H.R. 1737 would be
to nullify important information relied upon by regulated
entities during a period of heightened regulatory scrutiny
while also undermining indirect auto lenders' fair lending
compliance management programs.
For the foregoing reasons, the Minority opposes H.R. 1737.
Maxine Waters.
Carolyn B. Maloney.
Wm. Lacy Clay.
Gwen Moore.
Gregory W. Meeks.
[all]