WASHINGTON Republican lawmakers are calling on the Consumer Financial Protection Bureau to explain its rationale behind new fair lending guidelines for auto lenders.
The House Republicans, including 27 members of the Financial Services Committee, sent a letter dated Thursday to the bureau expressing concern about the intent and methodology of the guidelines. In March, the CFPB told indirect auto lenders to improve oversight of dealers they work with, warning them of reported interest rate disparities in car loans given to minority borrowers.
The letter asked the bureau to provide details of how the CFPB determined both the background of certain borrowers and the pricing discrepancies, among other things. Thirteen House Democrats issued a similar letter late last month asking for more information about the agency's policies related to auto lending discrimination.
"In sum, it appears to us that a loss to consumers would occur if the CFPB uses its supervisory and/or enforcement authority to weaken the intense competition that results from the ability to negotiate with the dealer to obtain financing terms that are more competitive than the best terms the consumer can secure from any other source," said the GOP members, which totaled 35. "It is troubling that the agency has initiated this process without a public hearing, without public comment, and without releasing the data, methodology, or analysis it relied upon to support such an important change in policy."
The lawmakers asked the consumer bureau to respond within 30 days.