59–006 

114TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 114–329 

REFORMING CFPB INDIRECT AUTO FINANCING 

GUIDANCE ACT 

NOVEMBER 9, 2015.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. HENSARLING, from the Committee on Financial Services, 

submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 1737] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 1737) to nullify certain guidance of the Bureau of Consumer Financial Protection and to provide requirements for guidance issued by the Bureau with respect to indirect auto lending, 

having considered the same, report favorably thereon without 

amendment and recommend that the bill do pass. 

PURPOSE AND SUMMARY

Introduced by Representative Guinta, H.R. 1737, the ‘‘Reforming 

CFPB Indirect Auto Financing Guidance Act,’’ repeals the Consumer Financial Protection Bureau’s (CFPB’s) Bulletin 2013–02 titled Indirect Auto Lending and Compliance with the Equal Credit 

Opportunity Act, which was published on March 21, 2013. H.R. 

1737 also requires the CFPB to follow a transparent process when 

issuing subsequent auto finance guidance. 

BACKGROUND AND NEED FOR LEGISLATION

Bulletin 2013–02 provides guidance to indirect auto lenders regarding fair lending risk under the Equal Credit Opportunity Act 


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1See http://files.consumerfinance.gov/f/201303lcfpblmarchl-Auto-Finance-Bulletin.pdf. 2See Dodd-Frank Section 1029. 

(ECOA).1 While this bulletin does not purport to offer guidance to 

auto dealers, which are explicitly exempted from CFPB regulation 

under the Dodd-Frank Wall Street Reform and Consumer Protection Act,2 it nevertheless raises significant concerns that the CFPB 

is flouting this statutory limitation because the bulletin’s practical 

effect is to regulate dealers. Furthermore, the bulletin raises concerns among auto lenders because it asserts that ECOA allows for 

a ‘‘disparate impact’’ theory of liability in which a lender may be 

held liable for discrimination where a facially neutral lending practice disparately impacts minority borrowers, even where the lender 

did not intend to discriminate against them. The bulletin advises 

that, in order to avoid liability under ECOA, financial institutions 

having indirect lender relationships with auto dealers should either 

impose controls on dealer compensation policies or forbid dealers 

from charging retail interest rates on consumer auto loans altogether. Although the CFPB maintains that its bulletins are nonbinding guidance, it is simultaneously aware that such guidance 

must be taken seriously by market participants, because just the 

cost of being subjected to a CFPB investigation, even if it does not 

result in a CFPB enforcement action, is enormous. Accordingly, the 

bulletin is tantamount to regulation, except without public notice 

or opportunity for comment. By issuing guidance which it knows 

will induce actionable reliance, the Bureau attempted to force lenders to require dealers to adopt a ‘‘flat fee’’ compensation model. In 

doing so, the Bureau seeks to regulate companies over which it has 

no statutory authority, and without even providing the due process 

afforded regulated companies under the Administrative Procedure 

Act. 

What makes the CFPB’s apparent disregard of its jurisdictional 

limitations even more problematic is the weakness of its statistical 

‘‘proof’’ that auto dealers have engaged in discriminatory lending. 

First, the CFPB does not have verifiable evidence that borrowers 

are minorities or other protected classes—it is illegal for auto dealers to collect such information. The CFPB ‘‘determined’’ borrowers’ 

race, ethnicity, and gender, among other factors, by reviewing their 

names and making conclusions using Bayesian probability, also 

known as a ‘‘proxy methodology’’—in other words, the CFPB made 

what it believed to be good guesses based on a number of assumptions. Second, the extension of disparate impact theory, which 

began in employment discrimination cases and was later applied to 

housing discrimination cases, is problematic in the context of 

ECOA and auto lending. The theory requires one to assume that 

any statistically significant difference in interest rates paid by borrowers of different races, genders, or other protected characteristics 

must be the result of discrimination. However, there potentially 

exist a number of non-discriminatory explanations for certain 

groups paying higher interest rates than others—for example, different car model preferences, dealership locations, socio-economic 

factors, and financial sophistication. 

On June 20, 2013, 35 Members of the House of Representatives 

wrote the CFPB seeking ‘‘all studies, analysis, and information it 

relied upon in developing its guidance document’’ and ‘‘the full set 


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3http://files.consumerfinance.gov/f/201409lcfpblreportlproxy-methodology.pdf. The Bureau’s proxy method is known as the Bayesian Improved Surname Geocoding method, or BISG. 4http://www.afsaonline.org/newslandlpublications/vehiclelfinancelstudy.cfm. 

of details concerning its disparate impact methodology,’’ including 

the proxies it used, the factors held constant, the metric used to 

measure pricing disparities, and the numerical threshold at which 

a pricing disparity constitutes an ECOA violation. Over a year 

later, and only after continuous pressure from Congress and industry stakeholders, the CFPB released a white paper detailing its disparate impact methodology for ascertaining fair lending liability for 

indirect auto lenders.3 The white paper described the CFPB’s methodology for assessing disparate impact liability. 

The CFPB’s methodology has drawn significant criticism, including by the American Financial Services Association, which commissioned Charles River Associates (CRA) to review the Bureau’s 

white paper. The CRA study, which was released on November 19, 

2014, found significant flaws in the CFPB’s proxy methodology.4

Based on 8.2 million vehicle contracts originated in 2012 and 2013, 

the study showed that the CFPB’s proxy method overestimates minorities by as much as 41 percent, which calls into question the reliability of the CFPB’s results. On the heels of the publication of 

the CRA study, industry stakeholders vociferously called for the 

CFPB to review its testing methodology, correct any errant bias, 

and release the findings of its revised methodology for public review before pursuing further action on the matter. 

HEARINGS

The Committee on Financial Services’ Subcommittee on Financial Institutions held a hearing examining matters relating to H.R. 

1737 on April 15, 2015. 

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on 

July 28, 2015 and July 29, 2015, and ordered H.R. 1737 to be reported favorably to the House without amendment by a recorded 

vote of 47 yeas to 10 nays (recorded vote no. FC–55), a quorum 

being present. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. The sole record vote 

in committee was a motion by Chairman Hensarling to report the 

bill favorably to the House without amendment. The motion was 

agreed to by a recorded vote of 47 yeas to 10 nays (Record vote no. 

FC–55), a quorum being present. 


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COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the findings and recommendations of the committee based on oversight activities under clause 2(b)(1) of rule X 

of the Rules of the House of Representatives, are incorporated in 

the descriptive portions of this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee states that H.R. 1737 will provide for the regulation of the auto loan industry pursuant to methodologically sound principles by (1) repealing the CFPB’s Bulletin 

titled ‘‘Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act’’ (Bulletin 2013–02) and (2) requiring that the 

CFPB formulate any future guidance addressing the same subject 

based on public input after releasing the data and analysis supporting the proposed guidance, and after conducting a study on the 

costs and impacts of the proposal to consumers and women-owned, 

minority-owned, and small businesses. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATES

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington DC, October 14, 2015. 

Hon. JEB HENSARLING, Chairman, Committee on Financial Services, House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1737, the Reforming 

CFPB Indirect Auto Financing Guidance Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Susan Willie. 

Sincerely, 

KEITH HALL. 


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Enclosure. 

H.R. 1737—Reforming CFPB Indirect Auto Financing Guidance Act 

H.R. 1737 would nullify a bulletin published by the Consumer Financial Protection Bureau (CFPB) that provides guidance to lenders who agree to finance the purchase of an automobile through a 

dealership in compliance with the Equal Credit Opportunity Act. 

The bill also would direct the CFPB, when proposing new guidance 

on this topic, to follow certain procedures to provide for public notice and to make all studies, data, and analyses used in developing 

the guidance available to the public. 

Based on information from the CFPB, CBO expects the agency 

would not prepare a replacement bulletin if H.R. 1737 were enacted. Because the bill would not affect the underlying statue or 

regulations to implement it, the Bureau can continue to enforce the 

Equal Credit Opportunity Act without the bulletin. Therefore, enacting H.R. 1737 would not affect the federal budget. Because enacting the bill would not affect direct spending or revenues, payas-you-go procedures do not apply. 

Enacting the bill would not increase net direct spending or on- budget deficits by more than $5 billion in any of the four 10-year 

periods beginning in 2026. 

H.R. 1737 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

not affect the budgets of state, local, or tribal governments. 

The CBO staff contact for this estimate is Susan Willie. The estimate was approved by H. Samuel Papenfuss, Deputy Assistant Director for Budget Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of the section 102(b)(3) of the 

Congressional Accountability Act. 

EARMARK IDENTIFICATION

H.R. 1737 does not contain any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9 of rule 

XXI. 

DUPLICATION OF FEDERAL PROGRAMS

Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), the 

Committee states that no provision of H.R. 1737 establishes or reauthorizes a program of the Federal Government known to be duVerDate Sep 11 2014 01:57 Nov 10, 2015 Jkt 059006 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\HR329.XXX HR329

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plicative of another Federal program, a program that was included 

in any report from the Government Accountability Office to Congress pursuant to section 21 of Public Law 111–139, or a program 

related to a program identified in the most recent Catalog of Federal Domestic Assistance. 

DISCLOSURE OF DIRECTED RULEMAKING

Pursuant to section 3(k) of H. Res. 5, 114th Cong. (2015), the 

Committee states that H.R. 1737 contains no directed rulemaking. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

This Section cites H.R. 1737 as the ‘‘Reforming CFPB Indirect 

Auto Financing Guidance Act’’ 

Section 2. Nullification of auto lending guidance 

This section states that Bulletin 2013–02 of the Bureau of Consumer Financial Protection (published March 21, 2013) shall have 

no force or effect. 

Section 3. Guidance requirements 

This section amends Section 1022(b) of the Consumer Financial 

Protection Act of 2010 (12 U.S.C. 5512(b)) to provide that when 

proposing and issuing guidance primarily related to indirect auto 

financing, the CFPB must provide opportunity for public input and 

make the data and analysis supporting the proposed guidance publicly available subject to certain redactions under the Freedom of 

Information Act. The section further provides that the CFPB must 

consult with other federal authorities and conduct a study on the 

costs and impacts of the guidance to certain groups. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italic 

and existing law in which no change is proposed is shown in 

roman): 

CONSUMER FINANCIAL PROTECTION ACT OF 2010 

* * * * * * * 

TITLE X—BUREAU OF CONSUMER 

FINANCIAL PROTECTION 

* * * * * * * 

Subtitle B—General Powers of the Bureau 

* * * * * * * 


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SEC. 1022. RULEMAKING AUTHORITY. 

(a) IN GENERAL.—The Bureau is authorized to exercise its authorities under Federal consumer financial law to administer, enforce, and otherwise implement the provisions of Federal consumer 

financial law. 

(b) RULEMAKING, ORDERS, AND GUIDANCE.— 

(1) GENERAL AUTHORITY.—The Director may prescribe rules 

and issue orders and guidance, as may be necessary or appropriate to enable the Bureau to administer and carry out the 

purposes and objectives of the Federal consumer financial 

laws, and to prevent evasions thereof. 

(2) STANDARDS FOR RULEMAKING.—In prescribing a rule 

under the Federal consumer financial laws— 

(A) the Bureau shall consider— 

(i) the potential benefits and costs to consumers and 

covered persons, including the potential reduction of 

access by consumers to consumer financial products or 

services resulting from such rule; and 

(ii) the impact of proposed rules on covered persons, 

as described in section 1026, and the impact on consumers in rural areas; 

(B) the Bureau shall consult with the appropriate prudential regulators or other Federal agencies prior to proposing a rule and during the comment process regarding 

consistency with prudential, market, or systemic objectives 

administered by such agencies; and 

(C) if, during the consultation process described in subparagraph (B), a prudential regulator provides the Bureau 

with a written objection to the proposed rule of the Bureau 

or a portion thereof, the Bureau shall include in the adopting release a description of the objection and the basis for 

the Bureau decision, if any, regarding such objection, except that nothing in this clause shall be construed as altering or limiting the procedures under section 1023 that may 

apply to any rule prescribed by the Bureau. 

(3) EXEMPTIONS.— 

(A) IN GENERAL.—The Bureau, by rule, may conditionally or unconditionally exempt any class of covered 

persons, service providers, or consumer financial products 

or services, from any provision of this title, or from any 

rule issued under this title, as the Bureau determines necessary or appropriate to carry out the purposes and objectives of this title, taking into consideration the factors in 

subparagraph (B). 

(B) FACTORS.—In issuing an exemption, as permitted 

under subparagraph (A), the Bureau shall, as appropriate, 

take into consideration— 

(i) the total assets of the class of covered persons; 

(ii) the volume of transactions involving consumer financial products or services in which the class of covered persons engages; and 

(iii) existing provisions of law which are applicable 

to the consumer financial product or service and the 

extent to which such provisions provide consumers 

with adequate protections. 


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(4) EXCLUSIVE RULEMAKING AUTHORITY.— (A) IN GENERAL.—Notwithstanding any other provisions 

of Federal law and except as provided in section 

1061(b)(5), to the extent that a provision of Federal consumer financial law authorizes the Bureau and another 

Federal agency to issue regulations under that provision of 

law for purposes of assuring compliance with Federal consumer financial law and any regulations thereunder, the 

Bureau shall have the exclusive authority to prescribe 

rules subject to those provisions of law. 

(B) DEFERENCE.—Notwithstanding any power granted to 

any Federal agency or to the Council under this title, and 

subject to section 1061(b)(5)(E), the deference that a court 

affords to the Bureau with respect to a determination by 

the Bureau regarding the meaning or interpretation of any 

provision of a Federal consumer financial law shall be applied as if the Bureau were the only agency authorized to 

apply, enforce, interpret, or administer the provisions of 

such Federal consumer financial law. 

(5) GUIDANCE ON INDIRECT AUTO FINANCING.—In proposing 

and issuing guidance primarily related to indirect auto financing, the Bureau shall— 

(A) provide for a public notice and comment period before 

issuing the guidance in final form; 

(B) make available to the public, including on the website 

of the Bureau, all studies, data, methodologies, analyses, 

and other information relied on by the Bureau in preparing 

such guidance; 

(C) redact any information that is exempt from disclosure 

under paragraph (3), (4), (6), (7), or (8) of section 552(b) of 

title 5, United States Code; 

(D) consult with the Board of Governors of the Federal 

Reserve System, the Federal Trade Commission, and the 

Department of Justice; and 

(E) conduct a study on the costs and impacts of such 

guidance to consumers and women-owned, minority-owned, 

and small businesses. 

(c) MONITORING.— (1) IN GENERAL.—In order to support its rulemaking and 

other functions, the Bureau shall monitor for risks to consumers in the offering or provision of consumer financial products or services, including developments in markets for such 

products or services. 

(2) CONSIDERATIONS.—In allocating its resources to perform 

the monitoring required by this section, the Bureau may consider, among other factors— 

(A) likely risks and costs to consumers associated with 

buying or using a type of consumer financial product or 

service; 

(B) understanding by consumers of the risks of a type of 

consumer financial product or service; 

(C) the legal protections applicable to the offering or provision of a consumer financial product or service, including 

the extent to which the law is likely to adequately protect 

consumers; 


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(D) rates of growth in the offering or provision of a consumer financial product or service; 

(E) the extent, if any, to which the risks of a consumer 

financial product or service may disproportionately affect 

traditionally underserved consumers; or 

(F) the types, number, and other pertinent characteristics of covered persons that offer or provide the consumer 

financial product or service. 

(3) SIGNIFICANT FINDINGS.— (A) IN GENERAL.—The Bureau shall publish not fewer 

than 1 report of significant findings of its monitoring required by this subsection in each calendar year, beginning 

with the first calendar year that begins at least 1 year 

after the designated transfer date. 

(B) CONFIDENTIAL INFORMATION.—The Bureau may 

make public such information obtained by the Bureau 

under this section as is in the public interest, through aggregated reports or other appropriate formats designed to 

protect confidential information in accordance with paragraphs (4), (6), (8), and (9). 

(4) COLLECTION OF INFORMATION.— (A) IN GENERAL.—In conducting any monitoring or assessment required by this section, the Bureau shall have 

the authority to gather information from time to time regarding the organization, business conduct, markets, and 

activities of covered persons and service providers. 

(B) METHODOLOGY.—In order to gather information described in subparagraph (A), the Bureau may— 

(i) gather and compile information from a variety of 

sources, including examination reports concerning covered persons or service providers, consumer complaints, voluntary surveys and voluntary interviews of 

consumers, surveys and interviews with covered persons and service providers, and review of available 

databases; and 

(ii) require covered persons and service providers 

participating in consumer financial services markets 

to file with the Bureau, under oath or otherwise, in 

such form and within such reasonable period of time 

as the Bureau may prescribe by rule or order, annual 

or special reports, or answers in writing to specific 

questions, furnishing information described in paragraph (4), as necessary for the Bureau to fulfill the 

monitoring, assessment, and reporting responsibilities 

imposed by Congress. 

(C) LIMITATION.—The Bureau may not use its authorities under this paragraph to obtain records from covered 

persons and service providers participating in consumer financial services markets for purposes of gathering or analyzing the personally identifiable financial information of 

consumers. 

(5) LIMITED INFORMATION GATHERING.—In order to assess 

whether a nondepository is a covered person, as defined in section 1002, the Bureau may require such nondepository to file 

with the Bureau, under oath or otherwise, in such form and 


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within such reasonable period of time as the Bureau may prescribe by rule or order, annual or special reports, or answers 

in writing to specific questions. 

(6) CONFIDENTIALITY RULES.— (A) RULEMAKING.—The Bureau shall prescribe rules regarding the confidential treatment of information obtained 

from persons in connection with the exercise of its authorities under Federal consumer financial law. 

(B) ACCESS BY THE BUREAU TO REPORTS OF OTHER REGU- LATORS.— 

(i) EXAMINATION AND FINANCIAL CONDITION REPORTS.—Upon providing reasonable assurances of confidentiality, the Bureau shall have access to any report 

of examination or financial condition made by a prudential regulator or other Federal agency having jurisdiction over a covered person or service provider, and 

to all revisions made to any such report. 

(ii) PROVISION OF OTHER REPORTS TO THE BUREAU.— In addition to the reports described in clause (i), a 

prudential regulator or other Federal agency having 

jurisdiction over a covered person or service provider 

may, in its discretion, furnish to the Bureau any other 

report or other confidential supervisory information 

concerning any insured depository institution, credit 

union, or other entity examined by such agency under 

authority of any provision of Federal law. 

(C) ACCESS BY OTHER REGULATORS TO REPORTS OF THE

BUREAU.— 

(i) EXAMINATION REPORTS.—Upon providing reasonable assurances of confidentiality, a prudential regulator, a State regulator, or any other Federal agency 

having jurisdiction over a covered person or service 

provider shall have access to any report of examination made by the Bureau with respect to such person, 

and to all revisions made to any such report. 

(ii) PROVISION OF OTHER REPORTS TO OTHER REGU- LATORS.—In addition to the reports described in clause 

(i), the Bureau may, in its discretion, furnish to a prudential regulator or other agency having jurisdiction 

over a covered person or service provider any other report or other confidential supervisory information concerning such person examined by the Bureau under 

the authority of any other provision of Federal law. 

(7) REGISTRATION.— 

(A) IN GENERAL.—The Bureau may prescribe rules regarding registration requirements applicable to a covered 

person, other than an insured depository institution, insured credit union, or related person. 

(B) REGISTRATION INFORMATION.—Subject to rules prescribed by the Bureau, the Bureau may publicly disclose 

registration information to facilitate the ability of consumers to identify covered persons that are registered with 

the Bureau. 

(C) CONSULTATION WITH STATE AGENCIES.—In developing 

and implementing registration requirements under this 


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paragraph, the Bureau shall consult with State agencies 

regarding requirements or systems (including coordinated 

or combined systems for registration), where appropriate. 

(8) PRIVACY CONSIDERATIONS.—In collecting information from 

any person, publicly releasing information held by the Bureau, 

or requiring covered persons to publicly report information, the 

Bureau shall take steps to ensure that proprietary, personal, 

or confidential consumer information that is protected from 

public disclosure under section 552(b) or 552a of title 5, United 

States Code, or any other provision of law, is not made public 

under this title. 

(9) CONSUMER PRIVACY.— 

(A) IN GENERAL.—The Bureau may not obtain from a 

covered person or service provider any personally identifiable financial information about a consumer from the financial records of the covered person or service provider, 

except— 

(i) if the financial records are reasonably described 

in a request by the Bureau and the consumer provides 

written permission for the disclosure of such information by the covered person or service provider to the 

Bureau; or 

(ii) as may be specifically permitted or required 

under other applicable provisions of law and in accordance with the Right to Financial Privacy Act of 1978 

(12 U.S.C. 3401 et seq.). 

(B) TREATMENT OF COVERED PERSON OR SERVICE PROVIDER.—With respect to the application of any provision of 

the Right to Financial Privacy Act of 1978, to a disclosure 

by a covered person or service provider subject to this subsection, the covered person or service provider shall be 

treated as if it were a ‘‘financial institution’’, as defined in 

section 1101 of that Act (12 U.S.C. 3401). 

(d) ASSESSMENT OF SIGNIFICANT RULES.— 

(1) IN GENERAL.—The Bureau shall conduct an assessment of 

each significant rule or order adopted by the Bureau under 

Federal consumer financial law. The assessment shall address, 

among other relevant factors, the effectiveness of the rule or 

order in meeting the purposes and objectives of this title and 

the specific goals stated by the Bureau. The assessment shall 

reflect available evidence and any data that the Bureau reasonably may collect. 

(2) REPORTS.—The Bureau shall publish a report of its assessment under this subsection not later than 5 years after the 

effective date of the subject rule or order. 

(3) PUBLIC COMMENT REQUIRED.—Before publishing a report 

of its assessment, the Bureau shall invite public comment on 

recommendations for modifying, expanding, or eliminating the 

newly adopted significant rule or order. 

* * * * * * * 


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MINORITY VIEWS 

H.R. 1737 would nullify the Consumer Financial Protection Bureau’s (‘‘CFPB’’ or ‘‘Bureau’’) March 2013 bulletin (‘‘Bulletin’’) that 

clarifies the Bureau’s authority to regulate indirect auto lenders 

under the Equal Credit Opportunity Act (‘‘ECOA’’) and that establishes its supervisory and enforcement expectations concerning indirect auto lender compliance with ECOA’s fair lending requirements. In nullifying the Bulletin, H.R. 1737 seeks to impose unprecedented restrictions on the Bureau’s issuance of important regulatory guidance and is unnecessary in light of the Bureau’s Summer 2014 white paper explaining its methodology for identifying 

violations of ECOA and its implementing regulation, Regulation B. 

The intent of H.R. 1737 is to send a clear message from Congress 

to the CFPB that lawmakers disapprove of the Bureau’s recent actions to root out discriminatory practices among auto lenders. However, Members of Congress who were supportive of the creation of 

the CFPB and its mission believe enforcing these fair lending laws 

is precisely what the Bureau was designed to do. To date, the 

CFPB has reached settlements with several large lenders that have 

agreed to improve their fair lending compliance and return money 

to harmed consumers. The Bureau has provided thorough and 

timely information to Congress on these enforcement actions. 

During the 113th Congress, similar legislation was proposed 

(H.R. 5403) and two separate inquiries from House Democrats and 

Republicans were made questioning the Bulletin and requesting 

details concerning the process that the Bureau uses to identify potential fair lending violations. The CFPB responded in Summer 

2014 with a white paper responsive to the concerns raised by members that provides extensive detail into its methodology for identifying and analyzing potential fair lending violations. 

The Bulletin provides important guidance on the Bureau’s supervisory and enforcement expectations for indirect auto lenders. If enacted, H.R. 1737 would nullify guidance that to date has been helpful to regulated entities as they develop and refine their fair lending compliance management programs. H.R. 1737 does not alter 

regulated entities’ obligations under ECOA or the CFPB’s examination or enforcement activity pursuant to ECOA. Consequently, the 

practical effect of H.R. 1737 would be to nullify important information relied upon by regulated entities during a period of heightened 

regulatory scrutiny while also undermining indirect auto lenders’ 

fair lending compliance management programs. 


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For the foregoing reasons, the Minority opposes H.R. 1737. 

MAXINE WATERS. 

CAROLYN B. MALONEY. 

WM. LACY CLAY. 

GWEN MOORE. 

GREGORY W. MEEKS. 

Æ 


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