With Rep. Maxine Waters as the likely candidate to lead the House Financial Services Committee, auto finance industry experts are preparing for a shift in the tone of the group.
Democrats flipped at least 29 seats last week and took control of the House of Representatives, a change that will ensure the new chairman of the House Financial Services Committee votes blue. Ranking member Waters, D-Calif., an outspoken critic of President Donald Trump's administration and a longtime defender of consumer protection legislation, is the probable replacement for Jeb Hensarling, R-Texas, who will finish his third term as chairman of the committee at the close of 2018.
A firm supporter of the Bureau of Consumer Financial Protection, Waters will likely aim to adjust attitudes about automotive finance regulation.
While some leaders in the banking community are pleased with the swing, some have voiced concerns over the impact that a divided Congress will have on their agendas.
In the auto finance space, Waters generally errs on the side of consumer protection. This spring, Waters challenged the vote to repeal the Consumer Financial Protection Bureau's bulletin addressing indirect auto lending and compliance with the Equal Credit Opportunity Act.
Waters reportedly said in May that the removal of the 2013 auto lending guidance was "an inappropriate and misguided use of the Congressional Review Act that sets a dangerous precedent."
In 2017, Waters criticized an attempt by House Republicans to pass legislation that would overhaul much of the Dodd-Frank Act, calling it "a deeply misguided measure that would bring harm to consumers, investors and our whole economy."
Hensarling is a longtime critic of Dodd-Frank and led the GOP-driven committee in its rollback of the lending guidance. Hensarling blamed the bureau's auto lending guidance for making customers pay nearly $600 more for their auto loans, and said the regulation allowed the bureau to illegally regulate companies over which it has no statutory authority.