Washington Takes Aim at the CFPB: What Auto Finance Needs to Know

Sweeping Reform Proposals, Complaint Changes and Interest-Rate Uncertainty Put Lenders on Watch

Washington is back in session, and auto finance has plenty to watch. A sweeping proposal to reshape the CFPB could alter everything from enforcement thresholds to rulemaking and investigations, while the Bureau itself is changing how it handles consumer complaint data. Add interest-rate uncertainty, federal spending deadlines and a shortened congressional calendar, and the regulatory landscape facing lenders, servicers and collectors could look considerably different in the months ahead.

9.4.26: Auto Finance Update

Lawmakers Unveil CFPB Reform Package

The House of Representatives returned to Washington this week following a five-week recess. On Wednesday, Chairman French Hill (R-AR) of the House Financial Services Committee, along with some of his colleagues, introduced legislation to significantly reform the Consumer Financial Protection Bureau. “Overreaching enforcement at the CFPB has created uncertainty for consumers and the businesses that serve them. This package establishes durable guardrails to make the CFPB more accountable and transparent while keeping its focus where it belongs: protecting consumers and promoting competition, innovation, and access to affordable financial products and services.”

The legislation makes 25 different changes to CFPB’s structure, funding, mission, and authorities. The most notable include:

Subjecting CFPB to annual appropriations provided by Congress.
Public cost-benefit analysis for any CFPB rules.
Imposes a statute of limitation on CFPB investigation into unfair or deceptive actions.
Requires all complaints to have demonstrated concrete “substantial injury”.
Increase from $10 billion to $30 billion the minimum threshold for a financial institution to be subject to enforcement activity.
Criminal violations for any complaints that are not 100% accurate.

It is premature to say if the bill is likely to pass the House this year. However, even if it does, it is unlikely to pass the Senate without some level of Democratic support, which is not likely.

Federal Reserve Chairman to Focus on Inflation

Federal Reserve Chairman Kevin Warsh spoke to a conference of financial leaders in Jackson Hole, Wyoming. In his speech, Warsh indicated that the Federal Reserve, for the near term, believes inflation remains too high, and it is unlikely to cut rates soon. According to Warsh, “But inflation remained too high. A good majority of my colleagues and I thought the wiser course was to await new information in the intermeeting period—especially given possible developments in supply chains, investment flows, and geopolitics—before deciding whether a change in interest rate policy was advisable. And we expressed our joint readiness to act as circumstances might require.”

CFPB To Stop Publishing Complaint Narratives

The Consumer Financial Protection Bureau recently announced it would cease publication of many complaint narratives. CFPB leadership believes many complaint narratives are not verified, thus should not be fully accepted. “To more closely align the Bureau’s operations with its statutory authorities and to mitigate the risk to consumers and companies of publishing confusing or misleading information, the CFPB will cease its discretionary publication of consumers’ complaint narratives and visualizations in the Database.”

This action reinforces elements of the culture of CFPB, which believes tangible financial data is necessary to advance any investigations into industry abuses.

Congress Passes Bill to Avoid Shutdown…For Now

This week, President Trump signed into law a Continuing Resolution (CR) to keep the federal government open after the current fiscal year ends September 30^th through December 11th.

Earlier in the week, by a vote of 370-48, the House approved the Senate-passed CR. In the lead up to House passage of the CR, a handful of Republicans rebelled against House leadership over frustrations that the CR was brought up under suspension (as opposed to under a rule allowing amendments), and over the provisions delaying until December 11 a ban on the sale of intoxicating hemp products and prohibiting implementation of the OMB proposed regulation on federal grants for the duration of the CR.

These members threatened to vote against a procedural rule allowing for House floor consideration of several pieces of legislation in an attempt to bring the House floor to a standstill, even though the move would not stop passage of the CR. Their efforts were thwarted, however, when two Democratic lawmakers crossed party lines (highly unusual for a rule) and joined Republicans to advance the procedural measure unlocking the House agenda for the week.

While passage of the CR avoids a government shutdown on October 1st, it also sets up a very busy lame duck session after the elections. Congress will need to address many issues, including finalizing FY27 appropriations and a possible bipartisan health package. Additionally, some of the issues in the CR such as the ban on the sale of intoxicating hemp products will likely continue to be sticking points in spending bill negotiations.

It is still unclear if the Senate Appropriations Committee will release their FY27 bills in the next few weeks. As you will recall, they were originally planning on posting the bills to their website in August, but complications in passing the CR prompted them to wait. Regardless of what the Senate Appropriations Committee decides, the House and Senate will need to find a way forward on FY27 spending bills before the December 11 expiration of the CR.

House to Cut September Session Short

This week, House leadership announced that the House will no longer be in session during the weeks of September 21st and 28th, as previously scheduled. The House was in session this week, will be out next week, and will return for the week of September 14th. In its notice to Members, leadership indicated that the House could be called back to vote on a budget resolution that will set up a reconciliation process if the Senate passes a bill.

Both the House and Senate are scheduled be out of session in October in the lead-up to the November elections.

WHO IS REPO ALLIANCE?

Repo Alliance Washington Update: The Week That Shaped Auto Finance – Repo Alliance Washington Update: The Week That Shaped Auto Finance – Repo Alliance Washington Update: The Week That Shaped Auto Finance

How and when was the group formed?

The initiative started several weeks ago with an invitation from ARA to all National and State Associations and other major industry leaders.

Is the Repo Alliance another association?

NO! The Repo Alliance is a collaborative effort of the groups which decided to answer the call and develop a fundraising program to further the interests of OUR industry and provide a voice at both National and State levels.

Which organizations came together?

American Recovery Association (ARA), the California Association of Licensed Repossessors (CALR), Texas Accredited Repossession Professionals (Texas ARP), and Harding Brooks Insurance.

How do you contribute?

A Square account has been established.
Click here to donate through Square.
Champion, Promote and Spread the word about this industry initiative!

Can I use any other method to contribute?

YES, you can mail a check, payable to Repo Alliance at 1400 Corporate Dr., Suite 175, Irving, TX, 75038.

Will funding reports and expenditures be available for review?

YES, this initiative will be completely transparent on monies raised with information available on the website.
One hundred percent of all monies raised will be used to pay for lobbying efforts. Everyone involved other than the lobbyist is a volunteer.

Why hire a dedicated lobbyist instead of just working with other lobbying groups?

We are working with other industry lobbyist groups but have realized without OUR OWN VOICE, we would be trusting the future of the Recovery Industry to the priorities of others. Riding the coattails of these other groups, puts our agenda as simply an afterthought.

What are the GOALS?

Change the negative, reputational image of the Recovery Industry.
Educate legislatures of the vital role we play.
Fight against language in bills or guidance from agencies that would decimate the recovery industry.

Contact Us

info@RepoAlliance.com

833-737-6255

833-REPOALL

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