DETROIT -- After discussions with legislators last week, Bill Fox, chairman of the National Automobile Dealers Association, says he is confident that a bill to limit the Consumer Financial Protection Bureau’s auto lending guidance will pass.
Fox said he was basing his hunch on bipartisan support so far and his experience at Capitol Hill last week.
At an Automotive Press Association luncheon here Wednesday, Fox told Automotive News that he was optimistic about legislators’ stance on the bill.
Throughout his nine years with NADA, Fox said he has made numerous trips to Capitol Hill, but “we don’t feel that we make much headway most of the time.”
This time was different, he said. More than 500 new-vehicle dealers, along with NADA executives, went to Capitol Hill for NADA’s Washington conference to meet with legislators to discuss policy issues that impact the industry, such as the CFPB’s guidance over auto lenders. The CFPB’s guidance lists recommendations for auto lenders to ensure their policies are fair and compliant.
The bill that would limit the CFPB, H.R. 1737, currently has 151 co-sponsors, 89 Republicans and 62 Democrats. The House Financial Services Committee voted on the bill 47-10 in July.
The bill would revoke the CFPB’s 2013 auto lending guidance, which suggests that auto lenders cap dealer discretion on auto loan interest rates or eliminate their ability to mark up loans, instead compensating them with a flat fee per transaction. It would also require the CFPB to make public the data and methodologies it uses to claim discrimination and study the costs and impacts any guidance will have on consumers.
“Regulators are sidestepping those who know the business best,” Fox said in a speech to reporters. “Washington is passing rules and legislation, issuing guidance and bringing enforcement actions that just don’t make sense.”
There were just two instances, Fox said, when NADA “absolutely made great headway” at Capitol Hill.
The first was before the auto industry bailouts in 2008. Legislators understood the problem and were willing to act on it. “You could feel it,” Fox said.
“The only other time I felt that was last week,” he added. “Every one of the dealers came back with the same message: ‘We made headway. Those guys get it. They understand that the CFPB needs to be more accountable, more forthright and transparent.’”
Only time will tell. Though the bill is moving, it still has a long way to go before becoming a law. Auto finance insiders have said that the House, which is made up of 246 Republicans and 188 Democrats, will likely pass the bill, but that the Senate, with 44 Democrats, 54 Republicans and two independents, may not. A House vote is expected this fall.
Fox says he is certain his prediction will come true: “It’ll come up for a vote, and I expect it to pass,” he said.