NADA Chairman Calls on Dealers to Rally Behind CFPB-Reform Bill
An important number that the nation's auto dealers should know is 2663. The NADA's battle to tame the CFPB continues and Senate bill S. 2663 is the next chapter. This bill, entitled, "Reforming CFPB Indirect Auto Financing Guidance Act," is identical to last year's House bill-H.R. 1737, which passed the House with a resounding, veto-proof majority vote of 332-96, including 88 Democrats.
NADA commends Sen. Jerry Moran (R-Kan.) for introducing this critical legislation this past March. Democrats and Republicans from both sides of the aisle have recognized a simple truth: Every consumer deserves access to competitive financing and great rates when they buy a new car or truck.
America's franchised auto dealers strongly support S. 2663, and businesses that make, sell, service, auction and finance motor vehicles have also joined in this support. Practically the entire auto industry is united on this issue. Like H.R. 1737, the bill would rescind the CFPB's flawed auto finance guidance, and make the bureau more transparent and accountable when issuing future guidance. The bill calls for a public comment period, coordination with regulatory agencies that possess authority over dealers and a study of the impact of the guidance on small businesses and, most importantly, consumers.
S. 2663 is a moderate bill that does not dictate a result. It's important that dealers urge their Democratic senators to support S. 2663 when it comes up for a vote. Due to the shortened congressional session with the Presidential election looming, we need to be ready for a vote at any time.
The bill allows for transparency and public notice so the public has an opportunity to analyze and to comment on the CFPB's attempt to change the auto financing market via "guidance." And it protects fair credit laws and their enforcement in order to safeguard equal opportunity in auto financing.
We're fighting for what dealers have known from the beginning: our current system of convenient dealer-assisted financing is fair and competitive. It boosts access to affordable credit for consumers and saves them money.
At the same time, NADA supports the Senate in its oversight to ensure that the CFPB's actions do not hurt consumers, especially those with less-than-perfect credit. If the CFPB intends to disrupt our highly efficient model, it can only be justified through reliable and sound analysis. Yet the CFPB continues to try to eliminate a dealer's ability to discount credit for consumers, despite a clear prohibition in Dodd-Frank against regulating dealers.
The optional NADA/NAMAD/AIADA Fair Credit Compliance Policy & Program is being adopted by a growing number of franchised dealers. Many are taking the proactive steps to ensure that the deserved participation that we earn when arranging financing falls within the Equal Credit Opportunity Act. Each of the three major credit application aggregators-including several other companies-have licensed the use of the program to facilitate its adoption and implementation by dealers.
The significant flaws in the CFPB's policy do not serve the nation's 16,500 franchised dealers-or the consumers they proudly serve.
NADA will continue to support our members through these challenges as we prove that dealers provide the most competitive, efficient consumer benefits on the planet in our current auto finance model.
Visit NADA.org/autofinance to learn more about how the CFPB's campaign to eliminate discounted financing rates is raising credit costs for consumers.
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