WASHINGTON — Twenty-two U.S. senators issued a letter to the Consumer Financial Protection Bureau (CFPB) on Oct. 30, demanding transparency from the agency as it works to eliminate auto dealers’ ability to discount the interest rates on retail finance contracts.

Addressed to CFPB Director Richard Cordray, the letter asked for “complete details concerning the statistical methodology the bureau employs to determine whether disparate impact is present in an auto creditor’s portfolio.” The CFPB has alleged that bank policies which allow auto dealers to mark up the interest rates on retail installment sale transactions in exchange for services rendered have caused a disparate impact, meaning that members of minority groups pay higher rates.

The 11 Democrats and 11 Republicans who signed the letter also asked that the bureau to identify the full range of its coordination with the Board of Governors of the Federal Reserve and the Federal Trade Commission prior to issuing a fair-lending guidance on March 21. The senators also questioned the CFPB’s choice to disregard the Administrative Procedures Act rulemaking process while seeking to change auto finance practices via the guidance.

“Although the CFPB has alleged that ‘disparate impact’ discrimination is present in the indirect auto financing market, the bureau has yet to explain its basis for this assertion,” the letter read. “Nor has the bureau released the complete statistical methodology it employs for determining whether disparate impact is present in an auto lender’s portfolio and the extent to which it has considered how the practical effect of its guidance will affect competition in the auto loan marketplace.”

Senators were asked to sign the letter, which was authored by Sens. Rob Portman (R-Ohio) and Jeanne Shaheen (D-N.H.), during the National Automobile Dealers Association (NADA)’s Washington Conference in September. It follows two other letters issued to the CFPB by House Rep. Terri Sewell (D-Ala.), 12 House Financial Services Committee Democrats, former House Financial Services Committee Chair Spencer Bachus (R-Ala.), and 34 House Republicans.

“Auto dealers from across the country applaud the bipartisan leadership of Sens. Portman and Shaheen,” read a statement from NADA Chairman David Wescott. “We hope that having over one-fifth of the U.S. Senate request this information will prompt the CFPB to finally answer the important question of how reducing competition for auto loans is beneficial for consumers.

“The CFPB’s actions threaten to eliminate 17,000 price discounters from the auto finance marketplace without justification or transparency.”