Bill to Rescind CFPB Auto Lending 'Guidance' Gains Support in Congress

WASHINGTON (Sept. 15, 2014) -- More than 400 new-car dealers and dealer association executives from across the country traveled to the nation's capital last week urging lawmakers to support a new bipartisan bill that nullifies the Consumer Financial Protection Bureau's flawed "guidance" on auto lending.

H.R. 5403 - Reforming CFPB Indirect Auto Financing Guidance Act - sponsored by Reps. Marlin Stutzman (R-Ind.) and Ed Perlmutter (D-Colo.), already has 50 cosponsors in the House since the bill was introduced on September 8. The bill is a narrower version of H.R. 4811, which was reported out of the House Financial Services Committee by a bipartisan vote of 35-24 in June.

"[Dealers] are such an important part of the economy," Rep. Stutzman told attendees at the 2014 National Automobile Dealers Association's (NADA) Washington Conference on September 10. "The CFPB is one of the most unaccountable agencies in the federal government," he added.

The Stutzman-Perlmutter bill requires the CFPB to provide a public comment period before reissuing any guidance on auto finance. The bill also requires transparency and accountability from the agency by making public any studies, data and analyses used to determine future auto finance guidance.

In remarks to his fellow dealers in the audience at the two-day legislative conference, Rep. Mike Kelly (R-Pa.), who played football at the University of Notre Dame, sounded every bit like a head coach talking to his team. In a passionate tone, he urged dealers to stand together, invite Members of Congress to visit their dealerships and become more active in the political process by "getting good people elected."

Kelly, a multifranchise dealer in Butler, Pa., added that there are a lot of marginal customers who benefit from dealer-assisted financing and that officials from the CFPB do not understand the dealership business.

"[The Stutzman-Perlmutter bill] is incredibly important to us," Kelly said.

Sen. Jerry Moran (R-Kan.) told dealers that Democrats and Republicans should come together to oversee the CFPB.

In March 2013, the CFPB issued guidance that threatens to eliminate the flexibility of dealers to discount the interest rate offered to consumers to finance vehicle purchases. The CFPB claims that negotiated interest rates between dealers and their customers create a significant risk of unintentional "disparate impact" discrimination. However, there are a variety of legitimate business-related factors that can affect finance rates, such as beating a competing rate.

NADA Chairman Forrest McConnell in comments during the general session highlighted NADA's recent legislative accomplishments and outlined the challenges ahead.

"In the past year, NADA helped repeal outdated bills that were time-takers and money-wasters," said McConnell, a Honda/Acura dealer in Montgomery, Ala. "We've led the charge against harmful tax reform proposals, including LIFO, heavy-duty truck excise taxes and broad recall legislation on rental vehicles."

Other speakers included House Minority Whip Steny Hoyer (D-Md.); Rep. Jamie Herrera Beutler (R-Wash.); NADA President Peter Welch; Jeff Carlson, chairman of the NADA's Dealers Election Action Committee and a Ford and Subaru dealer in Glenwood Springs, Colo.; and political analyst Charlie Cook.

Editor's note: The bipartisan legislation currently has 50 cosponsors. For the list of cosponsors, click here . Dealers are urged to contact their House members to cosponsor H.R. 5403. To locate your House member, click here . For the issue brief on H.R. 5403, click here .

About NADA

NADA represents 16,000 new-car and -truck dealerships with about 32,000 domestic and international franchises. For more information, visit


Charles Cyrill
NADA Public Affairs
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