S. 2663 Is Essential To Keeping Auto Financing Competitive, Affordable
A broad coalition of business groups involved in the making, selling, servicing, financing and auctioning of vehicles is urging Congress to support Senate legislation (S. 2663) that would preserve a consumer’s ability to obtain a discounted auto loan at a dealership.
In a letter sent to U.S. Senators, the group of nine trade associations asked for help in passing the “Reforming CFPB Indirect Auto Financing Guidance Act.” The legislation would rescind the Consumer Financial Protection Bureau’s (CFPB) 2013 auto finance guidance that could lead to limits on a consumer’s ability to receive a discounted auto loan from a dealer. The Senate bill’s House counterpart (H.R. 1737) was passed on November 18, 2015 by a bipartisan vote of 332-96.
The industry has often stated that access to affordable credit is essential to the auto industry and its customers, and the ability of a dealer to discount credit is often necessary to sell a vehicle. The CFPB has been pressuring finance sources for nearly three years to limit a dealer’s ability to discount credit based on a deeply flawed method for measuring lender compliance with the Equal Credit Opportunity Act (ECOA).
S. 2663 would require the CFPB to follow an open process prior to issuing any new guidance related to indirect auto financing. Additionally, the process would provide a framework for the industry to adopt a Department of Justice fair credit model, which effectively meets the CFPB’s stated objective of addressing fair lending risks without preventing consumer discounts for legitimate business reasons.
The letter was signed by: Peter Welch, President, National Automobile Dealers Association; Mitch Bainwol, President and CEO, Alliance of Automobile Manufacturers; Chris Stinebert, President and CEO, American Financial Services Association; Phil Ingrassia, President, National RV Dealers Association; Steve Jordan, CEO, National Independent Automobile Dealers Association; Frank Hugelmeyer, President, Recreation Vehicle Industry Association; Cody Lusk, President, American International Automobile Dealers Association; Frank Hackett, CEO, National Auto Auction Association; and Tim Buche, President and CEO, Motorcycle Industry Council.