U.S. Senator Mike Enzi, R-Wyo., applauded the Senate for voting today to stop the Consumer Financial Protection Bureau (CFPB) from regulating the auto lending industry despite explicit prohibitions against the bureau interfering.
“When the Consumer Financial Protection Bureau was first created, it was given unprecedented authority with little oversight — but the law is clear that overseeing auto lending is off limits,” Enzi said. “The bureau’s decision to ignore these restrictions is bad news for consumers and the auto industry. While the Consumer Financial Protection Bureau needs a lot more checks and balances, I am glad the Senate took action today to at least enforce the restrictions that the bureau should already abide by.”
In 2013, the CFPB issued a guidance document regulating auto dealers’ ability to negotiate loan terms with their customers, even though the Dodd-Frank law which created the CFPB explicitly prohibited it from doing so.
The CFPB also crafted its regulation in an attempt to avoid Congress’s review authority under the Congressional Review Act. But U.S. Senator Pat Toomey, R-Pa., obtained guidance from the Government Accountability Office to determine that the CFPB’s action was in fact “intrusive rulemaking” that should be subject to congressional review.
The resolution passed by the Senate will still need to be passed by the House and signed by the president before it would take effect.