Remarks: Rep. Royce Supports Rolling Back CFPB Auto Dealers Power Grab


WASHINGTON, D.C. —U.S. Representative Ed Royce (R-CA) delivered a statement on the House floor in support of S.J.Res.57, which uses Congressional Review Act (CRA) authority to nullify the Bureau of Consumer Financial Protection’s (CFPB) guidance relating to indirect auto lending. Following Rep. Royce’s remarks, the House passed S.J.Res.57 by a vote of 234-175. Video of Rep. Royce’s remarks can be found HERE.

Below is Rep. Royce’s statement (as prepared for delivery):

“Following the housing and financial crisis, this House, led by Democrats, acted to pass major financial services legislation in the form of Dodd-Frank.

As someone who sat on the Financial Services Committee at the time, and the subsequent Conference Committee, I can tell you we did not agree upon much.

However, through all the debate, there was bipartisan belief that auto-dealers and lenders were not at the heart of the crisis and should not be the focus of new regulation.

With that in mind, as the Chairman has noted, Section 1029 of Dodd-Frank explicitly exempted auto-dealers from CFPB supervision and regulation.

If that’s the case, Mr. Speaker, why are we here today?

Why are auto-dealers the focus of CFPB action that ends the consumers’ ability to receive discounted auto loans? Why are consumers facing higher – not lower – costs when going to buy a car?

The answer is quite simple: regulatory overreach.

CFPB ignored the will of Congress. As the Wall Street Journal noted, Congress’ explicit exemption ‘didn’t stop former CFPB chief Richard Cordray, who used the back door of auto-financing to regulate dealers.’

While Mr. Cordray may have been able to suspend disbelief, we do not have the same luxury.

We are not here by choice. We must act to pass this resolution today.

In conclusion, Mr. Speaker, I would like to share the bipartisan call for enforcement of the Equal Credit Opportunity Act.

Let’s work together to tackle discrimination where it actually exists, not where regulators ignore the law and employ algorithms to guess it might exist.”


(Courtesy of the House Financial Services Committee)
Former Director of the Bureau of Consumer Financial Protection, Richard Cordray, issued guidance on March 21, 2013, attempting to regulate automobile dealers, even though they are specifically prohibited from doing so under the Dodd-Frank Act. They did this by telling financial institutions that have indirect lender relationships with auto dealers that they should either impose controls on dealer compensation policies or forbid dealer markup practices altogether, or be held liable under fair credit lending law for any and all alleged actions made by the dealers.

In doing so, the Bureau sought to regulate companies over which it has no statutory authority, and also ignored due process as provided under the Administrative Procedures Act. Moreover, the Bureau’s own internal records show that then-Director Cordray chose to issue the guidance, which accused U.S. businesses of racial discrimination against consumers, despite knowing there were major flaws in the methodology on which it was based.

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