U.S. House of Representatives

Washington, D.C.  20515

Dear Representative,

On behalf of the more than one million members and supporters of the Council for Citizens Against Government Waste (CCAGW), I ask you to support H.R. 5403, the Reforming CFPB Indirect Auto Financing Guidance Act. 

Most car buyers decide to finance their purchases through voluntary, indirect financing at dealerships.  In order to earn customers’ business, auto dealers will often offer discounted interest rates.  However, in 2013, the Consumer Financial Protection Bureau (CFPB) issued guidance that attempts to pressure auto finance sources into compensating dealers through a “flat fee” that dealers cannot reduce for their customers.  In doing so, the CFPB is significantly reducing market competition by eliminating a dealer’s ability to match or beat a competitors’ finance rates. 

The most concerning aspect of the CFPB’s guidance is the lack of input from affected parties.  The agency did not obtain prior public comment or analyze the potential impact on consumers.

H.R. 5403 would rescind the CFPB’s 2013 guidance and require public comment prior to issuance of any future guidance.  The legislation would also require the agency to conduct a study on the impact to consumers, women-owned, minority-owned, and small businesses.  These changes would significantly improve transparency and accountability in the CFPB’s guidance issuing process.

I urge you to support the Reforming CFPB Indirect Auto Financing Guidance Act.  All votes on H.R. 5403 will be among those considered in CCAGW’s 2014 Congressional Ratings. 

Sincerely,

                                                            Tom Schatz