Washington D.C. – Today the U.S. Senate voted 51-47 to approve S.J. 57, a proposal to roll back the Consumer Financial Protection Bureau’s (CFPB) guidance clarifying the illegality of discriminatory “dealer markups” in auto lending.
Christopher Peterson, Senior Fellow at the Consumer Federation of America (CFA) and a University of Utah Law Professor released a new policy paper: Auto Dealer Markups, Jim Crow Finance, and the Congressional Review Act: How Congress May Bend the Rules to Facilitate Overpriced and Discriminatory Auto Lending.
The report details how dealer markups are a harmful practice that inflate the price of car loans and hurt poor and minority borrowers.
Additionally, S.J. Res. 57 is a dangerous expansion of the Congressional Review Act that could lead to further gridlock in Washington and uncertainty in markets across the country—Congress has never before used this power to invalidate an action, such as the CFPB’s auto lending guidance, that a regulatory agency does not itself characterize as a regulation.
“The fact that 51 United States Senators voted to allow car dealers to discriminate against minority borrowers is shocking,” said Christopher Peterson, Senior Fellow at the Consumer Federation of America (CFA) and a University of Utah Law Professor.
“The Senate just gave a green light to misleading consumers into paying hundreds or thousands of dollars more for their vehicles than they should have to pay based on their lender’s own estimate of a fair, risk-based price for the financing,” continued Peterson.
Contact: Christopher L. Peterson, 202-387-6121 x1020