May 9, 2018 / 12:19 AM / 19 days ago

U.S. House overturns rule meant to curb car loan bias

WASHINGTON, May 8 (Reuters) - The U.S. House of Representatives voted on Tuesday to reverse a measure that aimed to prevent discrimination in auto lending, the latest challenge to the consumer finance watchdog agency’s oversight.

The House voted 234-175 to overturn a rule that the Consumer Financial Protection Bureau (CFPB) implemented in 2013 aimed at preventing auto lenders from charging higher fees to borrowers based on race, national origin or credit score.

In April, the Senate voted to repeal the measure, making way for Tuesday’s vote in the House. Republicans lawmakers invoked the Congressional Review Act (CRA), an obscure procedure that allows Congress to scrap regulations within 60 working days after they are imposed. The Government Accountability Office agreed last year that the CFPB guidance was being enforced as a rule and that it could be reversed under the review law.

The resolution now goes to President Donald Trump for signing.

The National Automobile Dealers Association opposed the CFPB measure, saying it limited dealers’ flexibility to use discounted auto loans to help close sales. “Today’s action furthers the bipartisan effort ... to preserve the ability of local dealerships to offer discounted auto loans to their customers,” said Peter Welch, president of the dealers’ group.

Tuesday’s vote challenged the CFPB’s authority to impose rules.

“Overturning the auto lending guidance just opened the door to uncertainty across federal agencies that use rules and guidance to protect the public from financial predators,” said Rebecca Borné, an attorney with the Center for Responsible Lending.

“The CRA ... allows politicians to quickly dismiss agency protections that were thoughtfully crafted, often based on years of research and stakeholder input,” she said. (Reporting by Katanga Johnson; Editing by Cynthia Osterman)

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