Twitter icon
Facebook icon
YouTube icon
Flickr icon
Google+ icon
RSS icon

CHC Chair Statement on Repeal of Auto Lending Guidance

May 8, 2018
Press Release
Washington, D.C. – Today, Congressional Hispanic Caucus (CHC) Chair Rep. Michelle Lujan Grisham (NM-01) released the following statement after the House voted to pass S.J. Res 57, which would repeal the Consumer Financial Protection Bureau’s 2013 Indirect Auto Lending Guidance:
 
“For five years this guidance has protected consumers of color from discriminatory lending practices, but today’s misguided decision will leave these communities vulnerable to unfair interest rate markups and set a dangerous deregulatory precedent aimed at rolling back consumer protections.
 
“Data shows that discrimination in auto lending continues to be a very real problem for communities of color. A recent study by the National Fair Housing Alliance (NFHA) found that borrowers of color paid an average of $2,662 more than white borrowers over the life of the loan, which is why this guidance is so important to our communities. It’s simply unjust for consumers of color to have to pay artificially high-interest rates.
 
“Further, we oppose the abuse of the Congressional Review Act (CRA) to work against the interests of America’s working families by repealing or rolling back a number of consumer protections, including clean water, clean air, consumer financial transparency, and other critical safeguards we all rely upon.”
 
  • Historically, interest rate markups have disproportionately affected minority borrowers. According to the National Consumer Law Center, data from millions of race-coded auto loans during the late 1990s to early 2000s showed that dealers across the country were more likely to markup the loans of African Americans or to impose higher markups.
 
 
  • In March 2013, the CFPB issued guidance to dealers and indirect auto lenders to help them comply with the Equal Credit Opportunity Act’s (ECOA) fair lending requirements and to combat widespread discrimination against borrowers of color. S.J. Res. 57 would nullify the CFPB’s guidance, designed to help indirect auto lenders avoid discriminatory lending practices.
 
  • A number of civil rights, faith, and consumer groups oppose this harmful bill, including the Leadership Council on Civil and Human Rights, NAACP, Center for Responsible Lending, American Association of Justice, American Federation of Teachers, Americans for Financial Reform, Center for American Progress Action Fund, Center for Biological Diversity, Clean Water Action, Coalition on Human Needs, Communications Workers of America, Consumer Action, Consumer Federation of America, Defenders of Wildlife, Earthjustice, Interfaith Center on Corporate Responsibility, League of Conservation Voters, National Association of Consumer Advocates, National Association of Social Workers, National Audubon Society, National Black Justice Coalition, National Center for Lesbian Rights, National Center for Transgender Equality, National Consumer Law Center, National Employment Law Project, National Fair Housing Alliance, National Center on Homelessness & Poverty, National Organization for Women, National Urban League, National Women’s Law Center, Natural Resources Defense Council, Network for Environmental & Economic Responsibility of United Church of Christ, Public Citizen, Rainbow PUSH, The Wilderness Society, US PIRG, UnidosUS, Union of Concerned Scientists, United Steelworkers, and Young Invincibles among others
 
  • The National Association of Minority Automobile Dealers also opposes this legislation: “Passing this bill will set a horrible precedent, sending a message that our government is not supportive of diversity, nor willing to take action that will prevent conscious and unconscious bias.”
 
###
 
The Congressional Hispanic Caucus (CHC), founded in December 1976, is organized as a Congressional Member organization, governed under the Rules of the U.S. House of Representatives. The CHC is dedicated to voicing and advancing, through the legislative process, issues affecting Hispanics in the United States, Puerto Rico and U.S. Territories.