FI showroom red and grey logo
MenuMENU
SearchSEARCH

Reuters: U.S. Senate Panel Plans to Scrap CFPB’s Dealer Participation Guidance

U.S. Senate Banking Committee Republican Pat Toomey said on Tuesday the panel plans to scrap the CFPB’s guidance on dealer participation and leverage lending.

by Staff
April 11, 2018
Reuters: U.S. Senate Panel Plans to Scrap CFPB’s Dealer Participation Guidance

 

3 min to read


WASHINGTON, D.C. — Less than five months after the Government Accountability Office (GAO) agreed with his view that Congress has the power to repeal two Consumer Financial Protection Bureau (CFPB) rules, including its controversial guidance on dealer participation, U.S. Senator Banking Committee Republican Pat Toomey said the panel plans to do just that in the coming weeks, according to a Reuters report.

Toomey, who was addressing community bankers in Washington to lobby lawmakers to vote in favor of a bill that would reduce compliance obligations for smaller financial institutions, had asked the GAO last March whether the CFPB’s guidance on dealer participation and leveraged lending falls under the Congressional Review Act. The GAO said they did, setting the table for the Republican-controlled Congress to pass joint resolutions of disapproval under the CRA to repeal both rules — a process similar to the one used to repeal the bureau’s rule on forced arbitration last October.

Ad Loading...

“GAO’s decision is an important reminder that agencies have a responsibility to live up to their obligations under the law. When they don’t, Congress should hold them accountable,” Toomey said in December after the GAO delivered its response. “I intend to do everything in my power to repeal this ill-conceived rule using the Congressional Review Act.”

On Tuesday, according to the Reuters’ report, Toomey said the Senate Banking Committee would scrap the rule, referring to the bureau’s March 2013 auto lending rule.

The CFPB alleged in its five-page fair lending guidance that bank policies which allow auto dealers to mark up interest rates on retail installment sale transactions as compensation for services rendered create a significant risk of unintentional, disparate impact discrimination. It also warned lenders active in the indirect auto finance channel that they would be held liable for unlawful, discriminatory markups.

Auto finance trade groups have argued that the bureau used its guidance to indirectly regulate the activities of dealers, which are mostly exempt from the bureau’s oversight under the Dodd-Frank Act. Since issuing its guidance, the bureau has imposed millions of dollar in fines on auto finance sources, including Ally Financial, American Honda Finance Corp., and Fifth Third Bank.

Congress has attempted to kill the bureau’s guidance through the legislative route. In November 2015, the House of Representatives approved the Reforming CFPB Indirect Auto Finance Guidance Act by a 332-96 vote. The bill, however, was not acted upon by the Senate before the end of the 114th Congress.

Ad Loading...

When it initially issued its guidance, the bureau argued that because it had no legal effect on regulated entities, the CRA does not apply. The GAO, however, stated in its response to Toomey’s request that the bulletin “fits squarely within the Supreme Court’s definition of a statement of policy,” because it provides information on the manner in which the bureau planned to exercise its discretionary enforcement power.

And according to the GAO, the CRA “establishes special expedited procedures under which Congress may pass a joint resolution of disapproval that, if enacted into law, overturns the rule. Legal insiders, however, say the GAO’s findings give the bureau’s acting director all the authority he needs to rescind the guidance. Mick Mulvaney, who was appointed acting director this past November after Richard Cordray stepped down as the bureau’s director, has yet to act on that authority.

More F&I

Man holding magnifying glass over sales volume paper.
F&IMay 29, 2026

Why Your F&I PVR Is Misleading You

Here’s a handy checklist of the numbers to track in 2026 instead.

Read More →
Photo of woman typing on a laptop as she sits on a couch
F&Iby Hannah MitchellMay 29, 2026

Auto Consumer Anxiety Presents Opportunity

A survey of U.S. drivers found the majority are concerned about finances and the economy, but those fears make many ready to buy vehicle-protection products.

Read More →
Dustin Gingerich standing on stage giving a presentation
F&Iby Lauren LawrenceMay 28, 2026

Humble and Hungry: 12 Rules for an F&I Life

Dustin Gingerich, with a decade in the F&I business under his belt, shares his thoughts on leadership, building trust with customers, and the importance of learning and innovation.

Read More →
Ad Loading...
Photo of businessman's hands resting on files on a desk
F&Iby John TabarMay 27, 2026

Focus on the Opening

F&I managers must learn as much as possible about their customers, starting before they walk into their offices. The bulk of today’s consumers expect that, and good results will follow.

Read More →
Photo of a three-seat vehicle back seat
F&Iby Hannah MitchellMay 22, 2026

F&I Reaches for the Sky

The increasingly important profit center continued making gains in the first quarter, according to StoneEagle data, ancillary products proving more popular as consumers hold onto their buys longer.

Read More →
Cover image for a BOK Financial report titled “Timing the market: How avoiding volatility entirely can hurt long-term reinsurance program performance.” The image shows several road construction barricades with flashing amber warning lights lined up in a nighttime work zone. Beneath the image, red text explains that avoiding volatility can mean falling behind inflation and missing market rebounds that drive long-term surplus growth. The BOK Financial logo appears at the bottom right.
SponsoredMay 8, 2026

Timing the Market Can Hurt Long-Term Program Performance

For dealer-owned reinsurance entities, avoiding volatility entirely can mean falling behind inflation and missing market rebounds that drive long term surplus growth. Missing just a handful of strong market days can materially impact cumulative returns—an important reminder for long horizon trust and investment strategies.

Read More →
Ad Loading...
Ryan Ruff, The 90/10 Rule, Automotive Training Academy, Sales Series
F&IMay 6, 2026

The 90/10 Rule

In this video, Ryan Ruff explains the rule that elite sales professionals use to turn ordinary conversations into unforgettable customer experiences.

Read More →
Photo of essential oil diffuser on desk next to laptop
F&IMay 4, 2026

Your Office Is Talking

What’s the atmosphere saying about you to your customers? You can make minor adjustments and additions that transform your space into one that creates trust with the people on the other side of the desk.

Read More →
"Effective training ensures the customer’s needs remain at the heart of everything we do. When that is the focus, both sales and profits naturally improve." by Rick McCormick with F&I and Showroom logo and picture of Rick McCormick
F&IMay 1, 2026

F&I Training Fundamentals

How can auto dealerships help F&I managers fulfill their vital role in the most effective ways? Industry expert Rick McCormick shares his insights on the best ways to train these professionals and help them maintain good habits.

Read More →
Ad Loading...
Photo of car tire and the tread mark it left in snow
F&Iby Hannah MitchellApril 29, 2026

Not Just Any Tire Will Do

More consumers and businesses are opting for all-season options for various reasons as safety, sustainability and convenience push practical change.

Read More →