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NADA Supports Efforts in Congress to Preserve Consumer Auto Loan Discounts

Published April 13, 2018


Two separate measures are under consideration in Congress to repeal the Consumer Financial Protection Bureau’s (CFPB) deeply flawed and anti-consumer auto financing guidance from 2013 that pressures indirect auto lenders to eliminate the ability of local dealerships to offer discounted auto loans to their customers.

Senate Joint Resolution 57, introduced on March 22 by Sen. Jerry Moran (R-Kan.), and H.J.Res. 132, introduced on April 10 by Rep. Lee Zeldin (R-N.Y.), are unique Congressional Review Act (CRA) resolutions that allow Congress to “fast track” disapproval of an agency rule.

Three hundred and thirty two members of Congress – including 88 Democrats – have already voted to repeal the CFPB’s flawed guidance and preserve important auto loan discounts for their constituents. These CRA resolutions are simply a continuation of this bipartisan effort to keep auto loans affordable and accessible for all consumers.

NADA supports these CRA resolutions because, like H.R. 1737, the Reforming CFPB Indirect Auto Financing Guidance Act of 2015 – a bipartisan bill that passed the U.S. House by a veto-proof majority of 332-96 – their primary purpose is to preserve the rights of dealership customers to receive discounted auto loans in the showroom.

America’s franchised auto dealers strongly believe that every customer deserves to be treated fairly, and that there is no room for discrimination of any kind in auto retailing – period.

S.J.Res. 57 and H.J.Res. 132 are narrowly tailored resolutions that in no way modify or affect the enforcement of any fair credit laws or regulations – including the Equal Credit Opportunity Act (ECOA) – by the CFPB or any other agency. But they do take the important step of ensuring that consumer discounts in auto lending are safeguarded for every consumer.

Fair credit is critical for consumers everywhere. Fortunately, there is a way to ensure fair credit in auto financing while preserving the dealer discounts that promote competition and consumers savings in the marketplace – and that is the NADA Fair Credit Compliance Policy and Program.

NADA continues to urge the government to endorse this compliance program, which is based on a Department of Justice (DOJ) model that preserves consumer discounts on credit for legitimate business reasons.

In the meantime, we hope Congress acts on these important resolutions, because it would mean that the CFPB could not re-issue a new guidance in substantially the same form – absent subsequent authorization by Congress – and in doing so further threaten consumer auto loan discounts.