Senate to vote on resolution to repeal CFPB’s guidance on indirect auto lending
WASHINGTON, D.C. – Consumers Union, the advocacy division of Consumer Reports, urged the Senate to oppose efforts to repeal the Consumer Financial Protection Bureau’s indirect auto lending guidance. The Senate is expected to vote soon on a Congressional Review Act (CRA) resolution that would undo the CFPB’s guidance, which clarifies that the Equal Credit Opportunity Act makes auto lenders liable for discriminatory pricing on loans they acquire from auto dealers.
“It has long been established that dealer mark-ups on auto loans often result in higher costs for minority borrowers compared to white borrowers with similar credit records,” said Pamela Banks, senior policy counsel for Consumers Union. “The CFPB’s guidance simply highlights the potential liability auto lenders face from discriminatory dealer mark-ups and how that can be avoided. Congress shouldn’t hamper federal efforts to address auto lending discrimination by passing this ill-conceived resolution.”
A recent study by the National Fair Housing Alliance paired white and non-white testers to shop for the same car at the same dealerships within 24 hours of each other. The group found that, in most cases, the more qualified non-white applicant was offered more expensive financing options compared to the white applicant. On average, non-white borrowers were charged $2,662 more than white borrowers over the life of the loan.
Michael McCauley, email@example.com, 415-902-9537 (cell) or 415-431-6747, ext 7606