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September 19, 2014
Hensarling criticizes CFPB auto-finance rules
House Financial Services Committee Chairman Jeb Hensarling, R-Texas, wrote CFPB Director Richard Cordray to express frustration about the agency's lack of transparency regarding its auto-lending rules, according to The Hill.
Hensarling last March also demanded more information from Cordray on the methods and analysis the bureau uses to determine if discrimination has taken place in the auto-lending market.
Last year, CFPB issued a guidance bulletin to financial institutions noting they could be held responsible for fair lending violations of auto dealers they work with for indirect lending. NAFCU remains concerned about the guidance, which appears to put credit unions between auto dealers and CFPB.
In his latest letter, Hensarling wrote, "Auto lenders need to be able to understand the legal rules of the road. Continuing to deny these lenders the essential information with which to build compliance systems could make them less likely to extend financing to some borrowers, which could limit competition and make it harder or more expensive for Americans around the country to purchase an automobile."
CFPB this week announced it is proposing to oversee larger nonbank auto finance companies and released a "supervisory highlights" report offered as further guidance to indirect auto lenders, including credit unions, about the potential for fair lending violations.
The proposal affecting nonbank auto lenders is out for a 60-day comment period. It would allow the bureau to supervise compliance with federal consumer protections by nonbank auto finance companies that make, acquire or refinance 10,000 or more loans or leases in a year.
Hensarling last March also demanded more information from Cordray on the methods and analysis the bureau uses to determine if discrimination has taken place in the auto-lending market.
Last year, CFPB issued a guidance bulletin to financial institutions noting they could be held responsible for fair lending violations of auto dealers they work with for indirect lending. NAFCU remains concerned about the guidance, which appears to put credit unions between auto dealers and CFPB.
In his latest letter, Hensarling wrote, "Auto lenders need to be able to understand the legal rules of the road. Continuing to deny these lenders the essential information with which to build compliance systems could make them less likely to extend financing to some borrowers, which could limit competition and make it harder or more expensive for Americans around the country to purchase an automobile."
CFPB this week announced it is proposing to oversee larger nonbank auto finance companies and released a "supervisory highlights" report offered as further guidance to indirect auto lenders, including credit unions, about the potential for fair lending violations.
The proposal affecting nonbank auto lenders is out for a 60-day comment period. It would allow the bureau to supervise compliance with federal consumer protections by nonbank auto finance companies that make, acquire or refinance 10,000 or more loans or leases in a year.
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