CFPB Again Rejects FOIA Request to Release Leaked Agency Documents



McLEAN, VA. (Nov. 6, 2015)--For the second time in four months, the Consumer Financial Protection Bureau (CFPB) has quashed efforts to make public a number of leaked agency documents that undermine many of the CFPB's long-running claims that it is not attempting to regulate auto dealers in circumvention of the Dodd-Frank Act.

The CFPB's latest rejection came in response to an Oct. 8, 2015, Freedom of Information Act (FOIA) request, filed by the National Automobile Dealers Association (NADA), asking the CFPB to release internal documents, leaked to American Banker, acknowledging that the agency intended to regulate the auto finance market through enforcement action, and showing that it eschewed evidence that its methods for estimating disparate impact were deeply flawed.

In July, NADA asked the CFPB to make publicly available documents -- also leaked to American Banker -- in which CFPB officials admitted in a private memo that they intended to eliminate the ability of dealers to offer discounted financing rates to consumers, despite the Bureau's statutory prohibition against regulating auto dealers, as well as numerous public pronouncements from Director Richard Cordray that the Bureau was not -- as both Republicans and Democrats in Congress have worried -- straying from its Congressional mandate.

The CFPB denied NADA's July FOIA request three days after it was filed. The rejection of NADA's latest request comes directly on the heels of a series of  Wall Street Journal articles highlighting the significant shortcomings in the CFPB's process of identifying minority borrowers. According to The Wall Street Journal, the CFPB's continued use of this flawed methodology has resulted in non-minority borrowers receiving settlement funds that were specifically earmarked for minority borrowers.

"CFPB actions in the auto finance market are costing consumers money, and may very well be hurting the very people the agency is trying to help," said NADA President Peter Welch. "Consumers deserve a transparent process that will allow their concerns to be heard and considered before their rights are taken away by an overzealous Washington regulator."

Concerns about the manner in which the CFPB has attempted to influence the auto finance market prompted the House Financial Services Committee to approve H.R. 1737, a bill to provide accountability and transparency to that process. The committee approved the bill with a strong bipartisan vote of 47-10, and currently 102 House Republicans and 65 House Democrats have cosponsored the bill.

The full text of NADA's Oct. 8 letter to CFPB's Chief FOIA Officer is available here. CFPB's response is available here.

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