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Battle over CFPB's auto loan guidance could expand scope of CRA

Joe Mont | April 18, 2018

The Senate voted on Tuesday to exempt auto loans from Consumer Financial Protection Bureau guidance intended to root out discriminatory lending practices. The bigger picture: the affirmative, 51-47 vote will also give legislators greater ability to unleash the Congressional Review Act as a regulation-killing weapon.

The 2013 bulletin issued by the CFPB alleges that potentially discriminatory markups in auto lending may result in tens of millions of dollars in consumer harm each year.

When consumers finance automobile purchases from an auto dealership, the dealer often facilitates indirect financing through a third-party lender, the CFPB explained. Indirect auto lenders often allow the dealer to charge the consumer an interest rate that is costlier for the consumer than the rate the lender gave the dealer. This increase is typically called “dealer...

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