They may not agree on ObamaCare, but Senators are united this time in criticizing the efforts of Consumer Financial Protection Bureau (CFPB) against the alleged discriminatory lending in the automotive industry.
Led by Senators Rob Portman (R., Ohio) and Jeanne Shaheen (D., N.H.), the bipartisan group of 11 Republicans and 11 Democrats sent a letter to the regulator’s chief, Richard Cordray, asking for more proof that a problem such as discriminatory auto lending indeed exists.
The Wall Street Journal reports that the senators asked in the letter “why the CFPB warned auto lenders about the discrimination issue without an official rule-making process, and whether it conducted a cost-benefit analysis of changes to the auto lending market.”
It further reports that Portman is “concerned about the Bureau’s lack of transparency and unwillingness to make public the basis for its policy decisions, especially those that could negatively impact competition and consumers.”
CFPB has been pushing for the standardization of the interest rate charges added by car dealers. About seven months ago, it released guidelines for lenders to make sure auto lending remains lawful and to stop the discrimination against women and minorities.
But Shaheen said that the guidelines “could restrict legitimate credit options and increase costs for many Americans looking to finance their cars,” WSJ reports.
Auto dealers have been insisting that there is no evidence of discrimination. They also argue that the loan pricing system of the industry allows car buyers to obtain discounts from what direct lenders like banks could otherwise charge.