WASHINGTON, D.C. — Legal experts and industry associations
aren't the only ones raising questions about how the Consumer Financial
Protection Bureau intends to regulate auto lending. Now more than a dozen
members of the U.S. House Financial Services Committee are looking for answers,
too.

In seeking a response by next Friday, 13 House Democrats
sent a letter to CFPB director Richard Cordray requesting details on how the
bureau plans to enforce its guidance on discrimination in auto lending.

The letter concerns supervisory guidance the CFPB issued in
March regarding discriminatory auto loans, which focuses on the legal theory of
disparate impact. SubPrime Auto Finance News published details and reaction to
the guidance here and here.

Led by Rep. Terri Sewell, the lawmakers asked for "any and
all background information" about the CFPB's investigation into alleged
discrimination in auto lending, details on the methodology the bureau is using
to determine discrimination and additional information on how lenders are
expected to comply.

"As members of the House Committee on Financial Services, we
recently learned that the Consumer Financial Protection Bureau (CFPB) is
engaged in enforcement activity related to alleged disparate impact in auto
lending," Sewell wrote in the letter addressed to Cordray earlier this week.

"As representatives of both consumers and small businesses
(auto dealers), we want to continue our work with you to ensure that lending
practices in the auto, mortage and credit card industries are fair and
equitable," continued Sewell, who also is a chief deputy whip for the
Democratic Caucus.

"We must also work to ensure that credit markets function
competitively and efficiently so that our small businesses can grow," she went
on to write.

Along with Sewell, the letter also was signed by:

—Rep. David Scott of Georgia

—Rep. Joyce Beatty of Ohio

—Rep. Daniel Kildee of Michigan

—Rep. Lacy Clay of Missouri

—Rep. Patrick Murphy of Florida

—Rep. John Delaney of Maryland

—Rep. Gary Peters of Michigan

—Rep. Bill Foster of Illinois

—Rep. Ed Perlmutter of Colorado

—Rep. Denny Heck of Washington

—Rep. Kyrsten Sinema of Arizona

—Rep. Gregory Meeks of New York

"We respectfully ask that you provide us as members of
Congress with any and all background information about the origination of and
investigation into alleged practices within the auto lending industry," Sewell
said.

"We also would like to learn more about the allegations
stemming from these investigations and the methodology the CFPB has adopted to
determine whether fair lending violations exist. Specifically we would like to
know the method the bureau is using to identify different groups of consumers,
the factors it is holding constant to ensure its findings of pricing
differential are attributable to a consumer's background and the numerical
threshold at which the bureau determines that disparate impact is present," she
continued.

"Further, we would like to learn more about the compliance
expectations contained in the recent guidance the CFPB issued to indirect auto
lenders on dealer compensation policies," Sewell went on to state.

"We look forward to working with you in our effort to
provide all Americans access to affordable and fair auto financing within a
competitive marketplace," she added.

The lawmakers' letter to the CFPB can be downloaded here.

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