House plans May vote to repeal auto-lending guidance

House plans May vote to repeal auto-lending guidance
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The House is aiming to vote to repeal the controversial Consumer Financial Protection Bureau (CFPB) policy on auto-loan financing during the week of May 7.

Aides to House Majority Leader Kevin McCarthyKevin Owen McCarthyTrump mocks 'elites' at campaign rally Rally crowd chants 'CNN sucks' after Trump rips media Trump's America fights back MORE (R-Calif.) laid out that plan while discussing the House agenda at a breakfast in Washington this week, according to a source in attendance,.

 

A spokesman for McCarthy did not immediately return a request for comment.

The resolution to repeal the CFPB auto-lending guidance, which passed the Senate on Wednesday, is almost certain to clear the House and be signed into law by President TrumpDonald John TrumpFamily immigration detention centers could be at capacity within days: report Trump likely to meet with Putin in July: report DOJ requests military lawyers to help prosecute immigration crimes: report MORE.

The CFPB policy will likely be the first informal regulation to be repealed by Congress through the Congressional Review Act.

Congress has used the Congressional Review Act (CRA) more than a dozen times since 2017 to repeal formal rules issued under former President Obama, but never to revoke guidance.

Repealing the 2013 measure would set a new precedent for how far lawmakers can reach back to repeal regulations. Republicans are eager to use the CRA to unwind more guidance using a fast-track process that allows Congress to repeal covered policies with a simple majority in both chambers.

The CFPB’s controversial guidance sought to eliminate “dealer markups,” the additional interest added by an auto-dealer to a third-party loan as extra compensation. The bureau sought to kill the practice over concerns that black and Latino customers were often charged higher rates than whites with identical credit profiles.

Democratic lawmakers have fiercely defended the CFPB guidance and warned against the consequences of repealing similar policies, but lack the votes to kill the repeal effort.

Car dealers, their Republican allies in Congress and business groups have defended the dealer markups as a standard financing tool, dismissed concerns of discrimination as unfounded. They said the bureau rushed ahead with an overreaching power play based on weak evidence.

House Financial Services Committee Chairman Jeb HensarlingThomas (Jeb) Jeb HensarlingOn The Money — Sponsored by Prudential — Trump nominates budget official Kraninger for consumer chief | Senate votes to block Trump ZTE deal | Stocks fall on trade tensions | House panel moves to markup budget Bank regulator: Review after Wells Fargo scandal failed to find industry-wide fraud Five ways Mulvaney is cracking down on his own agency MORE (R-Texas) urged the lower chamber to repeal the CFPB guidance as soon as possible.

“Not only did the Bureau abuse and exceed its legal authority in regulating auto dealers,” Hensarling said in a statement following the Senate vote, “it then failed to afford due process to regulated companies.”

“I applaud my colleagues in the Senate for standing up for the rule of law, and I look forward to finally repealing this harmful and flawed bulletin very soon.”