Removing Barriers Blog

CFPB Indirect Lending Guidance Found to Violate Rulemaking Requirements
Posted December 08, 2017 by CUNA Advocacy

This week the Government Accountability Office issued a legal opinion that the CFPB’s Indirect Lending Guidance is a is a rule for purposes of the Congressional Review Act (CRA). The GAO states that the bulletin is a general statement of policy designed to assist indirect auto lenders to ensure that they are operating in compliance with ECOA and Regulation B, as applied to dealer markup and compensation policies.  

The guidance as a result will now be remanded to the CFPB. Additionally, Congress can now pursue a Congressional Review Act challenge of the guidance. Sen. Pat Toomey (R-PA) who requested the GAO review of the guidance has indicated that he plans to challenge it using the Congressional Review Act. 

In CUNA’s suggested changes for the CFPB, they highlighted this same issue. CUNA stated, “the CFPB issued a fair lending guidance bulletin that was unsupported by research or data. Credit unions support the goal of fair lending and strongly oppose any discriminatory policies. However, this guidance bulletin was also not issued through the normal course of the Administrative Procedures Act or the public rulemaking process. As such, the following actions are appropriate: The CFPB should withdraw the indirect lending guidance since it lacks transparency and has caused confusion about the CFPB’s jurisdiction and interest in this market. Policymaking in this area should be open to the public and responsive to those comments.” 

Accordingly, CUNA concurs with the GAO’s analysis and Sen. Toomey’s concerns and will be engaging in additional discussions about what should be done with the guidance moving forward.