NADA Praises Sen. Moran for Introducing Pro-Consumer Auto Finance Bill
LEGISLATION WILL ENSURE CONSUMER INTERESTS ARE PROTECTED IN THE REGULATION OF AUTO FINANCING
TYSONS, Va. (March 11, 2016)-The National Automobile Dealers Association (NADA) today commended Sen. Jerry Moran (R-Kan.) for introducing legislation in the U.S. Senate to protect consumers by bringing transparency and accountability to the Consumer Financial Protection Bureau's (CFPB) regulation of the auto finance market.
On Thursday, Moran, a member of the Senate Banking, Housing and Urban Affairs Committee, introduced S. 2663, the “Reforming CFPB Indirect Auto Financing Guidance Act,” which would require the CFPB to withdraw the flawed guidance that attempts to eliminate a dealer's ability to discount auto financing for consumers. The legislation also requires the minimal safeguards the agency failed to follow, such as public participation and transparency. Nothing in the bill would restrict the CFPB's ability to enforce fair credit laws in auto financing.
The bill is identical to legislation introduced by Reps. Frank Guinta (R-N.H.) and Ed Perlmutter (D-Colo.), which passed the House in November of 2015 by an overwhelmingly bipartisan vote of 332-96. The Guinta-Perlmutter bill (H.R. 1737) won the support of 244 Republicans and 88 Democrats.
"Every consumer deserves access to competitive financing and great rates when they buy a new car or truck, but the CFPB's misguided policy of eliminating consumer discounts on auto loans is making financing more expensive and harming many of the very people the agency is trying to help,” said NADA President Peter Welch. “Fortunately for consumers, there is strong bipartisan support in Congress for protecting consumers rights and consumer savings by repealing the CFPB's flawed guidance, and we commend Senator Moran for his leadership on this issue.”
Consumers have access to multiple lenders when financing through a local dealership, and dealers can discount loans to meet or beat competitive offers, but the CFPB policy aims to end loan discounting. In August, The Wall Street Journal estimated that the CFPB's campaign to eliminate dealer discounts would cost some consumers nearly $600 on a typical new-car loan.
Visit NADA.org/autofinance to learn more about how the CFPB's campaign to eliminate discounted financing rates is raising credit costs for consumers.