CFPB Statement on Indirect Auto Lending Rule

CFPB Acting Director Mick Mulvaney recently issued a statement addressing the enactment of Senate Joint Resolution 57, which disapproves the 2013 CFPB rule relating to “Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act.”  In the statement, Mulvaney thanked the President and Congress for correcting “this instance of Bureau overreach,” and stated that he looks forward to working with Congress to bring structural accountability to the CFPB.

The CFPB’s auto finance guidance, issued as a bulletin in 2013, was controversial because Section 1029(a) of the Dodd-Frank Act exempts auto dealers from the CFPB’s jurisdiction.  The Government Accountability Office previously issued a letter of opinion in 2017 stating that the CFPB’s bulletin constituted a rule under federal law and is subject to Congressional review because it establishes a new policy.  This determination allowed Congress to repeal the CFPB rule under the Congressional Review Act (CRA).  Once repealed, the CRA prohibits the reissuance of the rule in substantially the same form unless authorized by Congress.  Now, with the enactment of Senate Joint Resolution 57, the rule has no force or effect.

The CFPB statement also states that a number of guidance documents issued by the CFPB may be considered rules for the purposes of the CRA, and thus, the CFPB must submit them for review by Congress.

The CFPB statement is available here.