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 McCarthyGOP rep: Trump needs to retaliate against Iran to deter other hostile nations Ocasio-Cortez: McCarthy should apologize to migrant children separated from their parents Lawmakers warn of 'grave situation' after drone shot down 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 TrumpConway defends herself against Hatch Act allegations amid threat of subpoena How to defuse Gulf tensions and avoid war with Iran Trump says 'stubborn child' Fed 'blew it' by not cutting rates 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The CFPB policy will likely be the first informal regulation to be repealed by Congress through the Congressional Review Act.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 HensarlingHas Congress lost the ability or the will to pass a unanimous bipartisan small business bill? Maxine Waters is the Wall Street sheriff the people deserve Ex-GOP congressman heads to investment bank 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.”