On the recordJuly 7, 2016
I yield myself such time as I may consume. Mr. Chairman, this amendment prohibits the CFPB from implementing, administering, or enforcing any guidance related to indirect auto lending. This is meant as a shot across the bow to the CFPB, telling them not to bring fair lending cases against indirect automobile finance companies. But on a practical level, the amendment will only invite confusion into the industry. After all, this amendment does nothing to address lenders' obligations under the Equal Credit Opportunity Act. Instead, the amendment only strikes guidance the CFPB has provided to those lenders, providing clarity on how they can meet their obligations under the law. Discrimination in any finance market is unacceptable, and we know that discrimination is still alive and well in the indirect auto lending marketplace. In the three settlements to date against Ally Financial, Fifth Third Bank, Honda and Toyota Motor Credit, the CFPB secured nearly $162 million in borrower relief and penalties, finding that minority borrowers paid more than $200 over the life of a car loan than White borrowers, even when controlling for borrowers' creditworthiness. Discretionary markups are the source of discrimination in auto lending, and the guidance that this amendment nullifies helps lenders monitor and respond to potentially discriminatory auto lending practices.…
