[Congressional Record (Bound Edition), Volume 161 (2015), Part 13]
[House]
[Pages 18424-18440]
[From the U.S. Government Publishing Office, www.gpo.gov]




          REFORMING CFPB INDIRECT AUTO FINANCING GUIDANCE ACT


                             general leave

  Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks and submit extraneous materials on the bill (H.R. 1737) to 
nullify certain guidance of the Bureau of Consumer Financial Protection 
and to provide requirements for guidance issued by the Bureau with 
respect to indirect auto lending.
  The SPEAKER pro tempore Mr. Rodney Davis of Illinois). Is there 
objection to the request of the gentleman from Texas?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to House Resolution 526 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the state of the Union for the consideration of the bill, H.R. 1737.
  The Chair appoints the gentleman from Texas (Mr. Poe) to preside over 
the Committee of the Whole.

                              {time}  1344


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the state of the Union for the consideration of the bill 
(H.R. 1737) to nullify certain guidance of the Bureau of Consumer 
Financial Protection and to provide requirements for guidance

[[Page 18425]]

issued by the Bureau with respect to indirect auto lending, with Mr. 
Poe of Texas in the chair.
  The Clerk read the title of the bill.
  The CHAIR. Pursuant to the rule, the bill is considered read the 
first time. The gentleman from Texas (Mr. Hensarling) and the 
gentlewoman from California (Ms. Waters) each will control 30 minutes.
  The Chair recognizes the gentleman from Texas.

                              {time}  1345

  Mr. HENSARLING. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I rise today in support of H.R. 1737, the Reforming 
CFPB Indirect Auto Financing Guidance Act. It is an important, 
bipartisan bill cosponsored by 166 Members of the House, including 65 
Democratic Members. It was approved by the Financial Services Committee 
that I chair with strong bipartisan support, including more than half 
of the committee's Democratic members who voted.
  If Congress means what it says when we write a law, then the CFPB 
cannot be allowed to willfully ignore the law. Without this bill, the 
CFPB would have done a blatant end run around the Dodd-Frank Act as 
well as the Administrative Procedure Act.
  I would like to thank Representative Guinta of New Hampshire and 
Representative Perlmutter of Colorado for their leadership in providing 
the CFPB with an opportunity to live up to its claim of transparency 
and accountability. I want to thank the gentleman from Texas (Mr. 
Williams) as well for his outstanding work on this bill.
  The CFPB's flawed bulletin on indirect auto lending attempts to 
regulate compensation paid to auto dealers despite the fact that auto 
dealers were specifically exempted in the Dodd-Frank Act from CFPB 
rulemaking.
  By using this bulletin, the Bureau went far beyond merely clarifying 
existing law and instead, in trying to make new policy through this 
guidance, did this without using the normal rulemaking process and 
without public input.
  This is an affront, Mr. Chairman, to due process. This is an affront 
to the rule of law and to basic fairness. Furthermore, the CFPB has not 
been transparent in revealing the methodology it used to determine 
whether fair lending violations existed in the auto finance market.
  It took a year of constant pressure from Members of Congress and 13 
different letters from 90 Democrat and Republican Members to get the 
CFPB to finally provide documentation regarding its disparate impacts.
  In the white paper ultimately provided by the CFPB, they admitted 
that their own proxy methodology for determining racial disparities is 
flawed and overestimates the number of African Americans by perhaps as 
much as 20 percent. Outside statisticians at the well-respected Charles 
River Associates found the figure could be off by as much as 41 
percent.
  According to a series of three articles published this past September 
in the American Banker, internal agency documents show the CFPB was 
aware that their disparate impact methodology significantly overstates 
racial impact. In other words, Mr. Chairman, they knowingly used junk 
science and may have no evidence of unintentional discrimination based 
on the disparate impact theory.
  In those same internal memos, the American Banker newspaper also 
found that unaccountable CFPB bureaucrats chose to disregard the 
explicit exemption of auto dealers that Democrats, when they had a 
supermajority in both the Senate and the House and controlled the White 
House, put into Dodd-Frank.
  They chose to disregard the formal rulemaking requirement set out by 
the Administrative Procedure Act and instead used high-profile 
enforcement actions against large auto lenders to pressure them to 
lower the caps they set on dealer reserve.
  Now, not only does this call into question the CFPB's attempts to 
police the fairness of auto loans, its preferred outcomes will 
obviously increase costs for consumers.
  As was noted earlier, the CFPB has pressured finance companies to 
lower the caps they set on dealer reserve or eliminate this discretion 
altogether. However, under this pricing model, The Wall Street Journal 
recently revealed that interest payments for some consumers could 
increase by as much as $580 over the life of the loan.
  This shows the dire need for the CFPB to follow a transparent process 
when issuing any subsequent auto finance guidance. That is what H.R. 
1737 will ensure.
  The bill is a simple bill. It requires the Bureau to, number one, 
provide notice and an opportunity for public comment. Number two, it 
says the CFPB must make any studies, data, or analysis used in writing 
the bulletin public. Number three, it must consult with other relevant 
regulators. Four, it must study the impact of the guidance on consumers 
as well as women-owned businesses, minority-owned businesses, and small 
businesses.
  To those who claim this bill somehow undermines the CFPB'S 
antidiscrimination efforts, let me quote from the views the Democrat 
members stated in our report:

       H.R. 1737 does not alter the CFPB's examination or 
     enforcement activity pursuant to ECOA. That is simply a red 
     herring.

  Mr. Chairman, I urge all my colleagues to support H.R. 1737.
  Mr. Chairman, I reserve the balance of my time.
  Ms. MAXINE WATERS of California. Mr. Chairman, I yield myself 5 
minutes.
  Mr. Chairman and Members, I rise today in opposition to H.R. 1737, 
which would impede the Consumer Financial Protection Bureau's important 
work of regulating discriminatory auto lending practices and protecting 
minority borrowers.
  In spite of the fact that Chairman Hensarling just talked about a 
study, what he didn't tell you is that was a study that was done by the 
automobile industry, who is supporting this bill.
  H.R. 1737 would cancel important policy guidance the CFPB provided to 
lenders to help them comply with Federal fair lending laws.
  The bill also imposes burdensome restrictions on the issuance of any 
future auto lending guidance by requiring that the CFPB undergo a 
public notice and comment period and conduct cost-benefit studies 
before issuing guidance, requirements that have historically only been 
applied to agency rulemakings.
  These restrictions are clearly designed to substantially delay or 
effectively prevent the Bureau from issuing future antidiscrimination 
guidance to auto lenders, action that would undermine a lender's 
ability to comply with the law at the expense of minority borrowers. 
The long shadow of discrimination is still alive and well in some 
corners of the auto lending marketplace.
  The CFPB has secured nearly $140 million in relief to minority 
borrowers since December 2013 in landmark settlements against Ally 
Financial, Fifth Third Bank, and American Honda Finance Corporation, 
finding in each case that undisclosed dealer markups caused minority 
borrowers to overpay for their auto loans by an average of $200 over 
the life of the loan compared to similarly situated White borrowers, 
even when considering the borrower's creditworthiness.
  Mike Jackson, the CEO of the Nation's largest auto retailer, 
AutoNation, commended the CFPB's approach in its settlement with Honda, 
noting that other lenders should take a close look at the Honda 
settlement as a template for a solution.
  Much like Mr. Jackson, I believe that the CFPB is doing a commendable 
job of tackling a decades-old problem of minority borrowers not getting 
a fair deal when they obtain financing from dealerships.
  The Bureau's work in this regard should be supported, but instead, we 
are faced with H.R. 1737, yet another legislative proposal that would 
attempt to tie the Bureau's hands as it attempts to inform lenders of 
the steps that they can take to comply with Federal fair lending laws 
and to protect minority borrowers.

[[Page 18426]]

  I wouldn't care if everybody were treated the same way--you charge 
everybody too much--but, when you single out a certain segment of our 
society that happens to be minorities and you charge them more than 
other borrowers, it is a problem.
  H.R. 1737 follows a familiar script of industry-driven attempts to 
undermine the CFPB. Cost-benefit analysis, public notice and comment 
periods, outside rulemakings, unnecessary interagency consultation 
requirements are all designed to do the same thing, delay and undermine 
the important work of the CFPB.
  Instead of addressing the underlying discrimination in indirect auto 
lending that the CFPB is seeking to address, H.R. 1737 takes away an 
important tool for lenders seeking to follow the law who have been 
relying on the guidance for almost 3 years to develop their compliance 
policies.
  This is not a modest proposal designed to bring about transparency in 
the CFPB's oversight of auto lenders. Since issuing its guidance in 
March 2013, the CFPB has been transparent.
  It has provided industry with its models for identifying potential 
fair lending violations. Its supervisory manual describes exactly what 
the Bureau is seeking when conducting fair lending exams and 
supervisory highlights that clearly set forth the kinds of business 
practices that the Bureau will focus on when it examines an indirect 
auto lender.
  Furthermore, the CFPB's settlement agreements all follow a similar 
template that give lenders a glimpse into the kind of remediation that 
the Bureau will pursue should there be potential fair lending 
violations within a lender's portfolio.
  H.R. 1737's supporters have yet to identify what information any 
additional transparency would yield or what additional information 
lenders need to comply with Federal fair lending laws.
  If enacted, H.R. 1737 would actually place lenders at a disadvantage, 
just as scrutiny for fair lending violations from the CFPB and the DOJ 
intensifies. We should be working to support efforts to give industry 
as much information as possible so that they can comply with the law. 
H.R. 1737 does just the opposite, creating unnecessary uncertainty for 
lenders.
  Mr. Chairman, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Chairman, I yield 5 minutes to the gentleman from 
New Hampshire (Mr. Guinta), the author of H.R. 1737, a real champion 
for due process and auto buyers.
  Mr. GUINTA. I thank Chairman Hensarling for his leadership on this 
very, very important issue.
  Mr. Chairman, it has been over 2 years since the Consumer Financial 
Protection Bureau issued flawed auto financing guidance that created 
much uncertainty in the auto lending market.
  More than half of car buyers finance their purchase when they acquire 
an automobile. These consumers have the ability to receive great auto 
rates through dealer-assisted financing.
  However, this flawed and unstudied guidance threatens to eliminate 
auto dealers' flexibility to discount the interest rates offered to 
their consumers, the customers.
  My good friend across the aisle, Mr. Perlmutter of Colorado, and I 
have introduced H.R. 1737, along with 166 of our colleagues, both 
Republican and Democrat, to give the CFPB a chance to fix this faulty 
guidance. This bill was carefully written by Republicans and Democrats 
very simply and narrowly to provide clarity, fairness, and, most 
importantly, due process.
  No Federal agency can set new policies through guidance. However, in 
March of 2013, the CFPB attempted to go outside the formal rulemaking 
process by blatantly disregarding consumers and small businesses, 
blatantly disregarding their ability and their right to comment on 
guidance that will directly affect them.
  Mr. Chairman, H.R. 1737 asks that the CFPB rescind their flawed 
guidance and reissue it under a more transparent process by consulting 
other regulators and allowing the public notice and comment.
  I want to be clear. This bill does not strip the CFPB of any 
rulemaking authority it currently has. H.R. 1737 gives the CFPB the 
golden opportunity to correct and reissue their guidance that would 
take into account consumers and bring clarity to the market.
  Mr. Chairman, again, I want to reiterate that my colleagues and I are 
merely trying to promote transparency, accountability, and due process.
  There are a small number of critics that believe this bill is 
unnecessary because the CFPB already has the tools to correct their 
auto guidance. Well, the CFPB could have fixed this issue without 
legislation over 2 years ago, but they disregarded 13 bipartisan 
letters that were sent urging them to correct the fallacies in their 
guidance.
  I find it ironic that the agency that is supposed to protect the 
consumer is, in fact, harming them with this guidance. In fact, this 
guidance impacts much more than car buyers. It harms auto dealers, RV 
dealers, motorcycle dealers, international dealers, and even 
manufacturers.

                              {time}  1400

  Congress created the CFPB to protect consumers, not hurt them by 
silencing the voices of thousands of consumers and small businesses.
  On August 31 of this year, The Wall Street Journal reported: ``Some 
automakers have responded by overhauling their loan pricing in ways 
that will likely mean higher costs for some borrowers.''
  If the CFPB really cares about developing policies that are truly in 
the best interest of consumers, they should amend their guidance to be 
more transparent and allow public participation.
  Mr. Chairman, my bill is very simple and narrow, and, quite frankly, 
it is common sense. It only asks for five things: public notice and 
comment; make the data available to the public; consult with the 
Federal Reserve Board, the FTC, and the DOJ; create a consumer impact 
report; and conduct a study on women- and minority-owned businesses. 
That is the crux of the bill.
  Mr. Chairman, I include in the Record letters of support from the 
National Automobile Dealers Association, the National Independent 
Automobile Dealers Association, the Recreation Vehicle Industry 
Association, American International Automobile Dealers Association, the 
National Auto Auction Association, Alliance of Automobile 
Manufacturers, the National RV Dealers Association, the Motorcycle 
Industry Council, American Financial Services Association, New 
Hampshire Automobile Dealers Association, and the Small Business and 
Entrepreneurship Council, the U.S. Chamber, and the U.S. Consumer 
Coalition.
  I urge my colleagues to join the 166 Members in support of H.R. 1737.

                                        Chamber of Commerce of the


                                     United States of America,

                                                November 17, 2015.
       To the Members of the U.S. House of Representatives: The 
     U.S. Chamber of Commerce, the world's largest business 
     federation representing the interests of more than three 
     million businesses of all sizes, sectors, and regions, as 
     well as state and local chambers and industry associations, 
     and dedicated to promoting, protecting, and defending 
     America's free enterprise system, strongly supports H.R. 
     1737, the ``Reforming CFPB Indirect Auto Financing Guidance 
     Act,'' and H.R. 1210, the ``Portfolio Lending and Mortgage 
     Access Act.''
       H.R. 1737 would change the Consumer Financial Protection 
     Bureau's (CFPB) approach to the indirect auto lending market, 
     and bring much-needed transparency. The CFPB has created 
     enormous uncertainty in this market by issuing guidance 
     without notice and comment, and undertaking enforcement and 
     supervisory actions based upon post hoc statistical models--
     but has failed to share its analysis and assumptions, thus 
     depriving lenders of the ability to anticipate the CFPB's 
     analysis and to comply accordingly. H.R. 1737 would establish 
     clear rules and put any guidance regarding indirect auto 
     lending on a solid footing by eliminating any legal effect of 
     the CFPB's 2013 guidance, and then imposing reasonable 
     conditions on any future guidance on this topic.
       The Chamber supports H.R. 1210, which would provide 
     regulatory certainty to lenders--particularly small lenders 
     such as community banks and credit unions--by allowing loans 
     held on the books of a lender to be eligible for the safe 
     harbor provided under

[[Page 18427]]

     the Qualified Mortgage (QM) rule. It would also correct the 
     CFPB's ``one-size-fits-all'' approach for the mortgage 
     market. H.R. 1210 would facilitate a robust underwriting 
     process by lenders and would also help qualified borrowers 
     obtain mortgages by alleviating some of the uncertainty that 
     currently exists under the QM rule.
       Collectively, these bills would provide clear rules and 
     establish certainty in the marketplace benefiting consumers 
     and businesses. The Chamber urges the House of 
     Representatives to pass these bills as expeditiously as 
     possible.
           Sincerely,

                                              R. Bruce Josten,

                                         Executive Vice President,
     Government Affairs.
                                  ____

                                                  Small Business &


                                     Entrepreneurship Council,

                                                November 17, 2015.
       To All Members of the U.S. House of Representatives: The 
     Small Business and Entrepreneurship Council (SBE Council) 
     strongly supports H.R. 1737, the ``Reforming CFPB Indirect 
     Auto Financing Guidance Act.'' We urge you to vote for this 
     bipartisan legislation when it is acted upon by the full 
     House this week.
       This important piece of legislation rescinds the 
     problematic guidance issued by the Consumer Financial 
     Protection Bureau (CFPB) on indirect auto financing. The 
     guidance is based on assumptions and analysis the CFPB has 
     not made public. In the end, CFPB's action would prevent 
     consumers from negotiating and selecting a financing method 
     that makes the most sense for them. This guidance would also 
     raise costs. Small firms and self-employed individuals who 
     purchase vehicles to conduct businesses would be impacted by 
     this unnecessary auto-financing rule. To compete and survive, 
     small businesses need flexibility in choosing their best 
     financing arrangement.
       H.R. 1737 requires that the CFPB be more transparent on 
     future rules or guidance by making those proposed actions 
     available for public review and comment. The CFPB would also 
     be required to study the impact of its actions on consumers.
       Thank you for your consideration, and for your support of 
     America's entrepreneurs and small business owners.
           Sincerely,
                                                   Karen Kerrigan,
     President & CEO.
                                  ____



                                  Motorcycle Industry Council,

                                 Arlington, VA, November 17, 2015.
     Hon. Frank Guinta,
     House of Representatives, Cannon House Office Building, 
         Washington, DC.
       Dear Representative Guinta: On behalf of the Motorcycle 
     Industry Council (MIC), I write in support of H.R. 1737, the 
     ``Reforming CFPB Indirect Auto Financing Guidance Act.'' This 
     important legislation was voted out of Committee with 
     overwhelming support and currently has 166 cosponsors. We are 
     encouraged that this bipartisan legislative measure will be 
     considered by the full House of Representatives this week and 
     look forward to continuing to work with you as the bill moves 
     through the legislative process and ultimate enactment.
       The MIC is a not-for-profit national industry association 
     with offices in Irvine, California and metropolitan 
     Washington, D.C. The MIC seeks to support motorcyclists by 
     representing manufacturers, distributors, dealers and 
     retailers of motorcycles, scooters, ATVs, ROVs, motorcycle/
     ATV/ROV parts, accessories and related goods and services, 
     and members of allied trades such as insurance, finance and 
     others with a commercial interest in the industry.
       H.R. 1737 is necessary as a result of 2013 Consumer 
     Financial Protection Bureau (CFPB) guidance that threatens 
     the ability of dealers to discount the annual percentage rate 
     offered to consumers to finance vehicle purchases. The 
     guidance was issued without adequate public input, 
     consultation with sister agencies or study of the impacts of 
     the guidance on consumers. Your legislation would address 
     these issues by requiring the CFPB to provide notice and a 
     period for public comment; make public any studies, data, and 
     analyses upon which the guidance is based; consult with the 
     Federal Reserve Board, the Federal Trade Commission and the 
     Department of Justice; and study the cost and impact of the 
     guidance on consumers as well as women-owned, minority-owned, 
     and small businesses.
       Thank you.
           Sincerely,
                                                     Duane Taylor,
     Director, Federal Affairs.
                                  ____

                                                November 18, 2015.
       Dear Representative: We, the undersigned organizations who 
     represent businesses that make, sell, finance, auction and 
     service motor vehicles are writing to express our strong 
     support for H.R. 1737, the ``Reforming CFPB Indirect Auto 
     Financing Guidance Act.'' This bipartisan bill, introduced by 
     Reps. Guinta (R-NH) and Perlmutter (D-CO), would rescind the 
     Consumer Financial Protection Bureau's (CFPB) flawed 2013 
     auto finance guidance and allow the CFPB to reissue it under 
     a more transparent and better informed process.
       H.R. 1737, drafted by members of the House Financial 
     Services Committee on a bipartisan basis, has 166 bipartisan 
     cosponsors. On July 29, the House Financial Services 
     Committee passed H.R. 1737 by a vote of 47-10. In addition to 
     rescinding the 2013 guidance, H.R. 1737 would require that, 
     prior to issuing any new guidance related to indirect auto 
     financing, the CFPB:
       provide notice and a period for public comment;
       make public any studies, data, and analyses upon which the 
     guidance is based;
       consult with the Federal Reserve Board, the Federal Trade 
     Commission and the Department of Justice; and
       study the cost and impact of the guidance on consumers as 
     well as women-owned, minority--owned, and small businesses.
       This is the entire scope of the bill. By design, H.R. 1737 
     does not impinge on the CFPB's structure, jurisdiction, or 
     authorities.
       H.R. 1737 is needed to produce a more informed guidance 
     compared to the 2013 guidance, which lacked public input, 
     transparency, consultation with the CFPB's sister agencies 
     and, by the CFPB's own admission, any study of the impact of 
     the guidance on consumers. As a consequence of being issued 
     without these essential safeguards, the CFPB's guidance could 
     potentially (1) eliminate a dealer's ability to discount 
     credit in the showroom; (2) raise credits costs; and (3) push 
     marginally creditworthy consumers out of the auto credit 
     market entirely.
       Apart from the fact that guidance should not be used as a 
     means to make sweeping policy and market changes, the CFPB 
     auto guidance does not effectively manage fair credit risk in 
     the showroom, which is its purported goal. The Department of 
     Justice (DOJ), however, has created a better approach to 
     address fair credit risk without decreasing competition and 
     harming consumers. The DOJ model was used as a template for a 
     comprehensive compliance program that the National Automobile 
     Dealers Association, National Association of Minority 
     Automobile Dealers, and American International Automobile 
     Dealers Association issued last year to their respective 
     members. This compliance program addresses fair credit risk 
     where it matters--in the showroom--while preserving a 
     dealer's ability to discount credit.
       Thirteen Congressional letters signed by over 90 Members 
     and Senators on both sides of the aisle have been written to 
     the CFPB asking questions and expressing concern regarding 
     its auto guidance. Nonetheless, many essential questions 
     still remain unanswered. The open and transparent process 
     required by H.R. 1737 would provide a framework for those 
     questions to be answered, and to ascertain whether the CFPB's 
     new policy can withstand public scrutiny.
       Since the 1920s, credit has been the lifeblood of America's 
     auto industry. H.R. 1737 is a moderate, bipartisan process 
     bill that does not direct a result or tie the CFPB's hands, 
     but merely gives the public an opportunity to scrutinize and 
     comment on the CFPB's attempt to change the auto loan market 
     via ``guidance.''
       We respectfully ask you to protect consumers and vote 
     ``yes'' on H.R. 1737. Thank you for your consideration.
           Sincerely,
     Peter Welch,
       President, National Automobile Dealers Association.
     Chris Stinebert,
       President and CEO, American Financial Services Association.
     Steve Jordan,
       CEO, National Independent Automobile Dealers Association.
     Cody Lusk, AIADA,
       President, American International Automobile Dealers 
     Association.
     Mitch Bainwol,
       President and CEO, Alliance of Automobile Manufacturers.
     Phil Ingrassia,
       President, The National RV Dealers Association.
     Frank Hugelmeyer,
       President, Recreation Vehicle Industry Association.
     Frank Hackett,
       CEO, National Auto Auction Association.
     Tim Buche,
       President and CEO, Motorcycle Industry Council.
                                  ____

                                 United States Consumer Coalition.
     Majority Leader McCarthy,
     House of Representatives,
     Washington, DC.
       Majority Leader McCarthy: On behalf of the U.S. Consumer 
     Coalition, I write in support of H.R. 1737, the ``Reforming 
     CFPB Indirect Auto Financing Guidance Act.'' USCC thanks you 
     for scheduling a House vote on

[[Page 18428]]

     legislation that would rescind flawed guidance from the 
     Consumer Financial Protection Bureau (CFPB) that was designed 
     to eliminate the ability of consumers to access auto 
     financing discounts.
       USCC would also like to thank Representative Guinta and 
     Chairman Hensarling for prioritizing the needs of American 
     consumers by introducing and shepherding this legislation 
     through Committee.
       The U.S. Consumer Coalition (USCC) is a grassroots advocacy 
     organization that works to protect consumers' rights to 
     access free-market goods and services, and we believe that 
     all Americans benefit from a thriving free-market economy. 
     Unfortunately, the CFPB is actively engaging in efforts to 
     regulate, restrict, and diminish consumer choice. As an 
     advocate on behalf of America's consumers, defending their 
     right to make decisions for themselves and their families 
     without burdensome government interference, USCC supports 
     H.R. 1737.
       H.R. 1737 would grant consumers continued access to auto 
     financing discounts that can save them millions of dollars 
     every year. To further protect the rights' of consumers, H.R. 
     1737 would also require more transparency in the CFPB's 
     regulation and rule making process. Specifically, the bill 
     would require the CFPB:
       Provide a public notice and comment period before issuing 
     any final guidance on indirect auto financing;
       Make publicly available all information relied on by the 
     CFPB for making such a rule;
       Consult with other government agencies that share 
     jurisdiction over the indirect auto lending market; and
       Study the costs and impacts of the guidance to consumers 
     and women-owned, minority-owned, and small businesses.
       By the CFPB's own admission, the 2013 guidance was made 
     without any study on the impact that it would have on 
     consumers. It is imperative that such studies are done to 
     show the direct, and indirect, impacts that the powerful CFPB 
     can have on the every day lives of the American consumer.
       USCC supports the reforms that H.R. 1737 seeks to make, as 
     well as any effort to protect consumers' freedom and choice.
           Sincerely,
                                                       Brian Wise,
     President, USCC.
                                  ____

                                          New Hampshire Automobile


                                    Dealers Association, Inc.,

                                   Concord, NH, November 16, 2015.
     Hon. Frank Guinta,
     House of Representatives,
     Washington, DC.
       Dear Representative Guinta: On behalf of the 149 new car 
     and truck dealers in New Hampshire, we are writing to express 
     our strong support for H.R. 1737, the ``Reforming CFPB 
     Indirect Auto Financing Guidance Act.'' This bipartisan bill 
     was introduced on April 8 by you and Rep. Ed Perlmutter (D-
     CO). H.R. 1737 would rescind the Consumer Financial 
     Protection Bureau's (CFPB) flawed 2013 auto finance guidance 
     and allow the CFPB to reissue it under an open and 
     transparent process.
       In addition to rescinding the 2013 guidance, H.R. 1737 
     would require that, prior to issuing any new guidance related 
     to indirect auto financing, the CFPB:
       provide notice and a period for public comment;
       make public any studies, data, and analyses upon which the 
     guidance is based;
       consult with the Federal Reserve Board, the Federal Trade 
     Commission and the Department of Justice; and
       study the cost and impact of the guidance on consumers as 
     well as women-owned, minority-owned, and small businesses.
       By design, H.R. 1737 does not impinge on the CFPB's 
     structure, jurisdiction, or authorities.
       H.R. 1737 is needed to produce a more informed guidance 
     compared to the 2013 guidance, which lacked public input, 
     transparency, consultation with the CFPB's sister agencies 
     and, by the CFPB's own admission, any study of the impact of 
     the guidance on consumers. As a consequence of being issued 
     without these essential safeguards, the CFPB's guidance could 
     potentially (1) eliminate a dealer's ability to discount 
     credit in the showroom; (2) raise credits costs; and (3) push 
     marginally creditworthy consumers out of the auto credit 
     market entirely.
       Apart from the fact that guidance should not be used as a 
     means to make sweeping policy and market changes, the CFPB 
     auto guidance does not effectively manage fair credit risk in 
     the showroom, which is its purported goal. The Department of 
     Justice (DOJ), however, has created a better approach to 
     address fair credit risk without decreasing competition and 
     harming consumers. The DOJ model is being used as a template 
     for a comprehensive compliance program that the National 
     Automobile Dealers Association, National Association of 
     Minority Automobile Dealers, and American International 
     Automobile Dealers Association issued last year to their 
     respective members. This optional compliance program 
     addresses fair credit risk where it matters--in the 
     showroom--while preserving a dealer's ability to discount 
     credit.
       H.R. 1737 establishes an orderly, transparent process 
     whereby the CFPB can identify the DOJ model as a viable means 
     to address fair credit risk.
       Since the 1920s, credit has been the lifeblood of America's 
     auto industry. H.R. 1737 is a moderate, bipartisan process 
     bill that does not direct a result or tie the CFPB's hands, 
     but merely gives the public an opportunity to scrutinize and 
     comment on the CFPB's attempt to change the auto loan market 
     via ``guidance.'' Without this legislation, dealer-assisted 
     financing remains at risk, along with the threat that the 
     CPFB's policy may eliminate our customers' ability to obtain 
     lower interest rates at dealerships.
       On behalf of all New Hampshire small business auto dealers, 
     thank you for your leadership on this important small 
     business and consumer issue.
           Sincerely,
     Dennis Gaudet,
       New Hampshire Director, National Automobile Dealers 
     Association.
     William Gurney,
       Chairman, New Hampshire Automobile Dealers Association.

  Ms. MAXINE WATERS of California. I yield 3 minutes to the gentleman 
from Texas (Mr. Al Green), who is the ranking member on the Oversight 
and Investigations Subcommittee.
  Mr. AL GREEN of Texas. Mr. Chairman, I thank President Obama; I thank 
Mr. Cordray, who is the head of the CFPB; and I thank the ranking 
member for taking the position of protecting consumers.
  Mr. Chairman, we live in a world where it is not enough for things to 
be right. They must also look right. And here is what doesn't look 
right and, in fact, is not right.
  It doesn't look right and is not right for a person to go into an 
auto dealership, agree on a price, and then be sent to a finance 
department where this indirect lending takes place. It doesn't look 
right for that person to then be quoted an interest rate and agree to 
that interest rate, not knowing that the interest rate that the person 
has agreed to is higher than the one the person qualified for.
  This is what we are dealing with, consumers not knowing that they are 
paying more for their interest rates than they have qualified for. We 
dealt with this with the yield spread premium, same thing, slightly 
different, in that it dealt with home mortgages, but we outlawed that 
in Dodd-Frank. The CFPB is now trying its very best to make sure all 
people are treated fairly and equally when they apply for auto loans.
  It doesn't look right for this to happen, and studies consistently 
show that minorities, African Americans, Hispanics, Asians, are charged 
more for these loans than others are charged. The empirical evidence is 
there for those who wish to see it.
  It is not enough for things to be right; they must also look right. 
This bill just doesn't look right, and it doesn't smell right, and it 
is not right, and we ought not continue this kind of behavior in this 
country.
  In a righteous world, we would be debating the type of fraud that is 
being perpetrated on consumers.
  Mr. Chairman, I ask that people vote their conscience. But I will 
tell you that I am not going to support this kind of procedure that 
makes it entirely possible for invidious discrimination to continue. I 
came here to fight invidious discrimination. This is a part of that 
fight.
  We must not allow this kind of behavior to continue when we have got 
a CFPB that is willing to stand up for minorities, we have got a 
President who has appointed this man, and we have got a ranking member 
who is fighting hard to make sure minorities are treated fairly.
  To this end, I would say, consumers have no greater friend in the 
Congress of the United States of America than the Honorable Maxine 
Waters, who goes to bat every day to make sure that consumers, 
regardless of race, creed, color, national origin, or sexuality, are 
treated fairly.
  Mr. HENSARLING. Mr. Chairman, I yield 2 minutes to the gentleman from 
New Jersey (Mr. Garrett), chairman of the Capital Markets and 
Government Sponsored Enterprises Subcommittee of our committee.
  Mr. GARRETT. Mr. Chairman, it was just back in 2013, the CFPB, the 
Consumer Financial Protection Bureau, issued something called a 
bulletin.

[[Page 18429]]

  What did it do? It tried to eliminate auto dealer discounts, 
essentially helping consumers, on the grounds that these discounts 
create a fair credit risk.
  Now, there are two major problems with what they did. First, the 
CFPB's actions will actually raise costs, raise credit costs for 
families--these very same families that are having a tough time, as it 
is, in this economy because this is a bad economy right now--and make 
it harder for these family to purchase a car.
  Secondly, the CFPB's action is expressly prohibited by law from 
regulating auto dealers by the authorizing statute in Dodd-Frank.
  You see, the CFPB acted behind closed doors, without any transparency 
or input from the general public that they are supposed to be 
protecting, to circumvent, to go around the law, and found an indirect 
way to alter an industry that the CFPB is prohibited by law from doing.
  If that is not the very definition of an out-of-control agency, I 
don't know what it is.
  Mr. Chairman, it is time that we defend the rule of law in this 
country and defend transparent government against these unaccountable 
bureaucrats down the street at the CFPB.
  That is why I am proud to sponsor the Reforming CFPB Indirect Auto 
Financing Guidance Act. And by doing so, by repealing their improper, 
unlawful actions and denying the ability to provide dealers discounts, 
denying the ability to provide them the discounts to the customers, and 
requiring a transparent process for all future actions, this bill will 
preserve the consumers' ability to get a discounted auto rate and 
preserve the ability to adhere to the principles of open, honest, 
transparent, lawful government.
  So I urge my colleagues from both sides of the aisle to support H.R. 
1737.
  Ms. MAXINE WATERS of California. Mr. Chairman, I yield myself such 
time as I may consume.
  We must realize that what Mr. Garrett just shared with us is 
certainly not what the CFPB has done. As a matter of fact, what the 
CFPB has done, it has said: Lender, you cannot say that I will take X 
amount of percentage of interest; I will take 5, 10 percent interest; 
and, dealer, you can mark it up another 3, 4, 5 percent.
  So he has not exactly shared with you what happens with the CFPB.
  I yield 3 minutes to the gentleman from Minnesota (Mr. Ellison), a 
member of the Financial Services Committee.
  Mr. ELLISON. I want to thank the gentlewoman for the time. The 
ranking member has been an outstanding advocate for American consumers, 
and I thank her.
  I rise today to ask people to vote ``no'' on this piece of 
legislation and to alert the American people of another attempt to make 
it easier to overcharge you when you make a purchase.
  Today's threat to Americans' wallets occurs when you try to buy a 
car. Most people need to take out a loan to buy a car or a truck. They 
frequently get their financing through an auto dealer.
  Car buyers don't realize that some dealers can raise the price or the 
interest rate offered by the partnering bank to make an additional 
profit.
  For years, there has been a concern that African Americans and 
Latinos, despite negotiating harder and having good credit scores, pay 
a higher interest rate than white car buyers, charging some people 2 or 
2.5 more percent than others, based on skin color.
  It is also a violation of the law. The Equal Credit Opportunity Act 
prohibits discrimination in the financial marketplace. Lenders who 
partner with auto dealers have a responsibility to ensure that 
borrowers receive fair treatment. That is what the Consumer Financial 
Protection Bureau is trying to do.
  The CFPB issued guidance recommending that the auto industry 
establish flat-rate pricing and some other approach to ensure that they 
are not discriminating against their customers. This makes sense to me 
and would be beneficial to consumers.
  This bill, on which I urge a ``no,'' nullifies the CFPB's guidance. 
It requires the bill to jump through a number of hoops that open the 
Bureau up to litigation before the CFPB can establish new guidance.
  The National Association of Minority Auto Dealers opposes this bill. 
They say: ``To date, the recent consent orders between the CFPB, DOJ 
and financial institutions and captive finance companies to settle 
discrimination claims have not resulted in any negative outcomes or 
loss of revenue for minority dealers. We are convinced that this matter 
should and, more importantly, can be resolved with a nonlegislative 
fix.''
  Mr. Chairman, I say thank you to them.
  When people are overcharged or treated unfairly in the marketplace, 
it harms their ability to build wealth and fully participate in this 
economy. If you want to do something about income inequality, you must 
say ``no'' to this bill.
  Join the National Association of Minority Auto Dealers, the National 
Association for the Advancement of Colored People, the Center for 
Responsible Lending, the Consumers Union, Consumer Action, the National 
Council of La Raza, Americans for Financial Reform, American 
Association for Justice, ColorOfChange, Leadership Conference on Civil 
Rights and Human Rights, the Urban League, and more to vote ``no'' on 
this legislation.
  I include in the Record the National Association of Minority 
Automobile Dealers' letter opposing this legislation and the NAACP's 
letter opposing this legislation.
  I just want to point out that discrimination in this country has been 
fought long and hard for centuries. Let's not stop now.

                                           National Association of


                                  Minority Automobile Dealers,

                                     Largo, MD, November 13, 2015.
     Hon. G.K. Butterfield,
     RHOB,
     Washington, DC.
       Dear Congressman Butterfield: The National Association of 
     Minority Automobile Dealers (NAMAD) is not in support of H.R. 
     1737, ``Reforming CFPB Indirect Auto Financing Guidance 
     Act'', as we believe this issue can and should be resolved 
     non-legislatively. This legislation does nothing to alter the 
     Consumer Financial Protection Bureau's (CFPB) authority to 
     enforce, or lenders' obligations under the Equal Credit 
     Opportunity Act (Act).
       We support the CFPB's mission to ensure that consumers are 
     protected and treated fairly. Reversing guidance to lenders 
     at a time of heightened regulatory scrutiny could delay 
     lenders' efforts to comply with the Act.
       Looking back on the great financial crisis of 2008, 
     legislation enacted to bail out financial institutions and to 
     aid General Motors and Chrysler through bankruptcy was not 
     beneficial for minority dealers. Minority-owned dealers were 
     disproportionally affected with a 40% (400 dealers) decline 
     in its dealer body in comparison to non-minority dealers, who 
     suffered only a 6% decline. Today, out of the 18,000 new 
     automobile dealerships, only 1,100 are minority owned.
       NAMAD finds that, to date, the recent consent orders 
     between the CFPB, DOJ and financial institutions and captive 
     finance companies to settle discrimination claims have not 
     resulted in any negative outcomes or loss of revenue for 
     minority dealers.
       We are convinced that this matter should, and more 
     importantly, can be resolved with a non-legislative fix. In 
     particular, NAMAD believes that the Fair Credit Compliance 
     Policy & Program it instituted in 2014 along with NADA and 
     AIADA achieves this goal, as the program is designed to 
     prevent any discriminatory practices for all consumers.
       We do not support H.R. 1737, as the solution to 
     discrimination in auto lending, but rather urge you and your 
     colleagues to assist us in coming up with and implementing a 
     non-legislative answer.
           Sincerely,
                                                     Damon Lester,
     President.
                                  ____

                                                November 18, 2015.
     Re NAACP Strong Opposition to H.R. 1737, The Reforming CFPB 
         Indirect Auto Financing Guidance Act.
     Members,
     U.S. House of Representatives, Washington, DC.
       Dear Representative Ellison, On behalf of the NAACP, our 
     nation's oldest, largest and most widely-recognized 
     grassroots-based civil rights organization, I strongly urge 
     you to oppose and vote against H.R. 1737, the Reforming CFPB 
     Indirect Auto Financing Guidance Act. If enacted, this 
     legislation will allow racial and ethnic minorities to 
     continue to be discriminated against by auto lenders. 
     Discrimination based on race or ethnicity in the financial 
     services or any other arena must be stopped, and this bill 
     goes in the opposite, and wrong, direction.

[[Page 18430]]

       Financial regulators have known for more than 20 years that 
     the full price you may pay for an auto may not be based 
     solely on the make, type, and model of the car; some of the 
     less scrupulous car dealers would offer higher loan rates to 
     people based on the color of their skin, their last name, or 
     what they look like. In the mid-1990's, this trend of 
     discrimination became apparent and a series of lawsuits were 
     filed against the largest auto finance companies in the 
     country. The data from those lawsuits showed that borrowers 
     of color were twice as likely to have their loans marked up, 
     and paid markups twice as large as similarly situated white 
     borrowers with similar credit ratings. Thus, on March 21, 
     2013, the Consumer Financial Protection Bureau (CFPB) issued 
     a bulletin providing guidance for indirect auto lenders who 
     may fall within the CFPB's jurisdiction on ways to limit fair 
     lending risk under the Equal Credit Opportunity Act, or ECOA.
       This CFPB bulletin explained that certain lenders who offer 
     auto loans through dealerships are responsible for any 
     unlawful, discriminatory pricing, which may occur and that 
     they should take actions to eliminate the discrimination. In 
     other words, dealers could continue to mark up loans, and 
     they could continue to be compensated for such mark-ups; 
     simply, they should not discriminatorily mark-up loans based 
     on race. And the financial servicers which underwrote the 
     loans should do what they could to ensure that discrimination 
     based on race or against any other protected class was not 
     perpetuated.
       The NAACP commends the CFPB on this guidance on indirect 
     auto lending. It is an important step in the Bureau's 
     enforcement of fair lending laws and regulations, and it is 
     clearly within the jurisdiction of the CFPB to ensure that 
     there is not discrimination in lending.
       The CFPB has authority to examine large banks, and credit 
     unions--and their affiliates--that have assets over $10 
     billion. The CFPB supervises more than 150 of the nation's 
     largest financial institutions. Furthermore, existing law, 
     ECOA, makes it illegal for a creditor to discriminate in any 
     aspect of a credit transaction on prohibited bases including 
     race, color, religion, national origin, sex, marital status, 
     and age. Under ECOA, and not to mention under the rules of 
     basic fairness and a moral sense of right and wrong, lenders 
     have an obligation to monitor and eradicate discrimination, 
     and to change those practices that lead to the 
     discrimination. In its bulletin, the CFPB reiterated that 
     certain lenders which may offer auto loans through 
     dealerships are liable for unlawful, discriminatory pricing.
       Racial and ethnic minorities have long been victims of high 
     priced, often-unsustainable, predatory, loans. This is true 
     when we are discussing almost every financial transaction: 
     whether it be a mortgage, an auto loan, or a short-term loan 
     just to make ends meet, including a payday loan. These high 
     cost, predatory, loans have been a staple in our community 
     for decades. Study after study has clearly demonstrated that 
     even when credit history is taken into account, African 
     Americans and Latinos are regularly charged more for home or 
     auto loans than white customers. While dealer markups affect 
     all consumers, research has shown that Latino and African 
     American borrowers are more likely than White borrowers to 
     receive an unnecessary markup in their interest rate, and the 
     markup is typically higher for Latinos and African Americans 
     than Whites, regardless of creditworthiness.
       H.R. 1737, the Reforming CFPB Indirect Auto Financing 
     Guidance Act'' would undermine the ability of the CFPB to 
     root out discrimination, something that has no place in our 
     lending markets, yet has, unfortunately, been proven to 
     exist. The role of the CFPB is to protect consumers, and with 
     their 2013 guidance, they have done just that. We should be 
     applauding and encouraging the agency's measured, yet 
     affirmative, steps to stop discrimination. Yet H.R. 1737 
     attacks the Bureau's attempts to protect us.
       Auto dealers and auto dealer financing agencies who play by 
     the rules and do not discriminate should have no problems 
     with the CFPB guidance. In fact, they should welcome it as it 
     helps clean up an industry which has been tainted by 
     discrimination for too long. An auto is too prevalent, too 
     necessary, and too much of a family investment for us to 
     allow discrimination to exist in the cost of the car.
       Thank you in advance for your attention to the NAACP 
     position. Should you have any questions or comments on the 
     NAACP position, please feel free to contact me.
           Sincerely,
     Hilary O. Shelton,
       Director, NAACP Washington Bureau & Senior Vice President 
     for Policy and Advocacy.
                                  ____


                 Prevent Discrimination in Auto Lending


 Oppose H.R. 1737: the Reforming CFPB Indirect Auto Financing Guidance 
                                  Act

     H.R. 1737 is opposed by the National Association of Minority 
         Auto Dealers, Center for Responsible Lending, NAACP, 
         Consumers Union, Consumer Action, National Council of La 
         Raza, Americans for Financial Reform, American 
         Association for Justice (AAJ), Color of Change, 
         Leadership Conference on Civil and Human Rights, National 
         Consumer Law Center, National Urban League, U.S. PIRG, 
         the Woodstock Institute and more.
       Dear Colleague: We urge you to oppose H.R. 1737, the so-
     called ``Reforming CFPB Indirect Auto Financing Guidance 
     Act.'' This legislation would prevent the Consumer Financial 
     Protection Bureau (CFPB) from enforcing laws against 
     discrimination in auto lending. This bill nullifies CFPB's 
     guidance to lenders on how to avoid practices that may lead 
     to discriminatory pricing.
       Automobiles are the most common financial assets owned by 
     American households, and are a prerequisite for many jobs. 
     When people buy cars with dealer financing, they can be 
     charged an interest rate mark up. This mark up can be set by 
     the individual car dealer. Such variable pricing can lead to 
     discrimination. Even though current U.S. law prohibits 
     lending discrimination based on unrelated background traits, 
     African Americans, Latinos and others could be charged a 
     higher interest rate, regardless of credit scores or income.
       In recent years, the CFPB and the Department of Justice 
     took actions resulting in more than $176 million in fines and 
     restitution to people who paid higher interest rates for auto 
     loans based not on their credit risk but on their ethnicity.
       There is no reason why the CFPB should not be able to 
     continue to enforce these rules for indirect auto lenders. 
     When people are overcharged, they have less money to spend 
     and invest which slows our economy. We urge members to 
     support, not weaken, the CFPB's effort to fight 
     discrimination in auto lending. Oppose H.R. 1737.
           Sincerely,
     Keith Ellison,
       Co-Chair, Congressional Progressive Caucus.
     Raul Grijalva,
       Co-Chair, Congressional Progressive Caucus.
                                  ____


                 Support Fair Lending, Oppose H.R. 1737


 Stand with Nearly 70 Civil Rights and Consumer Advocacy Organizations 
                       in Opposition to H.R. 1737

       Dear Colleague: This week, the House will consider H.R. 
     1737, the ``Reforming CFPB Indirect Auto Lending Guidance 
     Act.'' This legislation sends a clear message to the CFPB 
     that they should back down from enforcing our fair lending 
     laws against auto lenders. The CFPB has recovered $140 
     million in fines and penalties against auto lenders for 
     engaging in discriminatory auto lending practices in two 
     years--more than other regulators in the 40 years since the 
     Equal Credit Opportunity Act (ECOA) was enacted. Now is not 
     the time to tell the Bureau to back away from their mission 
     in ensuring lending free from discrimination on the basis of 
     race, ethnicity or other protected characteristics or to 
     introduce unnecessary uncertainty to ongoing lender efforts 
     to comply with fair lending laws.
       Over the course of several investigations, the CFPB has 
     found that auto lenders have failed to appropriately monitor 
     practices that allow African-American, Hispanic, and Asian 
     and Pacific Islander borrowers to be charged more than their 
     white counterparts through undisclosed interest-rate markups. 
     These additional markups are charged without regard to the 
     borrower's credit history and have displayed a clear pattern 
     of discrimination. Several large auto financers have already 
     settled with the CFPB and pledged to reform their practices, 
     while at least seven additional investigations are still 
     ongoing.
       Dealers should be fairly compensated for their work, but it 
     should not be at minority borrowers' expense. Fair 
     compensation for dealers can co-exist with affordable and 
     equitable access to credit, and the CFPB's approach to date 
     reflects this recognition. Even the CEO of the largest auto 
     retailer in the country, AutoNation's Mike Jackson, has 
     commended the CFPB's approach stating that ``[t]he goal [of 
     the Honda Settlement] is to reduce the variability in loans 
     without hurting the dealer economically . . . [t]h[e] [Honda 
     agreement] is a very viable method of doing both of those 
     things, and I'm saying the industry should look at this as a 
     template for moving forward.''
       The CFPB is tackling decades of discrimination in the auto 
     lending marketplace, and they have done it in spite of 
     various attempts to undermine their authority to do so 
     directly through familiar attacks on the Bureau's structure 
     and funding and indirectly through proposals like H.R. 1737. 
     This legislation would tie the Bureau's hands at the very 
     time that they are making progress in reining in decades-old 
     practices that have left far too many borrowers overpaying 
     for their auto loans.
       Supporters of H.R. 1737 contend that the proposal is modest 
     because it is not a direct attack on the Bureau's structure, 
     budget or enforcement authority under ECOA. This is 
     misleading, as it undermines lenders' attempts to comply with 
     ECOA. Lenders have

[[Page 18431]]

     used the guidance H.R. 1737 nullifies for nearly three years 
     to develop compliance policies designed to protect consumers. 
     As the Administration notes in their opposition to H.R. 1737, 
     ``[t]he bill would create confusion about the existing 
     protections in place to prevent discriminatory auto loan 
     pricing, and effectively block [the] CFPB from issuing 
     related guidance in the near-term.''
       Further, while H.R. 1737 does not expressly prohibit the 
     reissuance of future guidance, the restrictions it places on 
     the Bureau concerning any future guidance ensures that it 
     will be substantially delayed or never reissued. No other 
     agency is required to undergo requirements similar to a 
     rulemaking for simply issuing guidance to regulated entities, 
     and no other type of guidance from the CFPB is subject to 
     these burdensome restrictions except guidance to auto 
     lenders. Indeed, H.R. 1737's supporters have yet to 
     demonstrate why guidance to auto lenders requires that the 
     Bureau jump through so many bureaucratic hoops when the 
     guidance is there to help lenders comply with the law.
       Contrary to H.R. 1737's supporters' claims that the 
     proposal is necessary to maintain affordable auto financing, 
     the CFPB's oversight of potentially discriminatory lending 
     practices has not led to higher borrower costs or restricted 
     access to credit. Outstanding auto loan balances reached $1 
     trillion dollars in the second quarter of 2015--the first 
     time in U.S. history. Industry experts predict that the 
     number of vehicles sold in 2015 will exceed 17 million for 
     the first time since 2001. The National Association of 
     Minority Auto Dealers have confirmed this, noting in their 
     opposition to H.R. 1737 that the CFPB's activity, ``ha[s] not 
     resulted in any negative outcomes or loss of revenue'' for 
     their member dealers. There is simply no evidence that the 
     Bureau's oversight has caused prices to increase or led to 
     fewer borrowers being able to get financing.
       Make no mistake, H.R. 1737 leaves consumers more vulnerable 
     to unfair or discriminatory business practices. This is why 
     the Administration, the nation's minority auto dealers, the 
     largest auto dealer in the country, and nearly 70 civil 
     rights organizations and consumer advocacy groups oppose H.R. 
     1737--it does nothing to move the ball forward on the 
     important work of eliminating potentially discriminatory 
     lending practices.
       The people best positioned to address discriminatory 
     lending practices are the lenders themselves, and H.R. 1737 
     denies lenders vital information they need to ensure that 
     they are not underwriting loans that contain potentially 
     discriminatory interest rate markups that harm borrowers.
       For the foregoing reasons I would urge a NO vote on H.R. 
     1737.
           Respectfully,
                                                    Maxine Waters.

  Mr. HENSARLING. Mr. Chairman, I yield myself 10 seconds just to say 
that the exact same group the gentleman quoted, the National 
Association of Minority Auto Dealers, says in their letter: ``This 
legislation does nothing to alter the Consumer Financial Protection 
Bureau's authority to enforce, or lenders' obligations under the Equal 
Credit Opportunity Act.''
  Again, that is a red herring.
  I yield 1\1/2\ minutes to the gentleman from Indiana (Mr. Messer).
  Mr. MESSER. Mr. Chairman, if it ain't broke, don't fix it.
  Ignoring this simple wisdom, the CFPB issued a guidance bulletin, 
without public notice and comment, threatening to eliminate a car 
dealer's ability to discount interest rates for their customers.
  This so-called guidance was offered with no study of the impact on 
consumers or small businesses, and it was issued with no proof that 
current industry standard discount practices were harming consumers.
  Let me repeat. Despite the rhetoric, the guidance was issued with no 
evidence of any discrimination.
  This much is clear: the regulatory burden imposed by this guidance 
will be bad for car dealers because it eliminates a car dealer's 
ability to provide lower interest rates for their customers, and it is 
bad for consumers because they will inevitably pay more.
  H.R. 1737 is commonsense legislation that stops the CFPB's solution 
in search of a problem. It nullifies the CFPB's current guidance 
bulletin restricting discounts on auto loan interest rates, and it 
requires the CFPB to allow for public notice and comment before any 
further restrictions can be imposed.
  It also requires a study of the costs and impacts of interest rate 
deductions on consumers.
  It is a good bill, and I urge my colleagues to support it.
  Ms. MAXINE WATERS of California. Mr. Chairman and Members, this 
business about consumers not being able to negotiate down, that somehow 
the car dealers can't give a discount is absolutely not true, 
absolutely not true.
  I yield 2 minutes to the gentlewoman from Wisconsin (Ms. Moore), the 
ranking member on the Subcommittee on Monetary Policy and Trade of the 
Financial Services Committee.
  Ms. MOORE. I thank the ranking member.
  Mr. Chairman, I do rise to oppose H.R. 1737. I have listened very 
carefully to my colleagues, and I am very sympathetic and empathetic to 
their desire to help their auto dealers. Too bad this legislation 
doesn't do that.
  I also agree with the proponents of this bill that the CFPB can't 
directly regulate auto dealers, and I don't think the CFPB wants to 
regulate auto dealers.

                              {time}  1415

  The problem with this bill is that it doesn't help auto dealers, and 
it is not a response to CFPB regulatory overreach. What the CFPB does 
have jurisdiction over is the Equal Credit Opportunity Act.
  A few years ago, the Bureau noticed a funny thing: that minorities 
were paying higher markups on auto loans, even when you control for 
credit risk and other factors, discounts. They noticed if you were 
Jesus Rodriguez or Barack Obama Jones that somehow you paid a higher 
price for the car.
  Now, the problem is that this legislation attempts to free the auto 
dealers from discrimination. Of course, discrimination is a violation 
of the Equal Credit Opportunity Act. The CFPB and the Department of 
Justice brought actions against these lenders for violations of ECOA.
  We heard from the other side that there was no evidence that these 
car dealers had done anything wrong. No, because it didn't go to court. 
That is why there was no evidence. It went to settlement, and they 
settled for $140 million.
  Pretty simple, the CFPB protected borrowers from discrimination and 
then put out helpful guidance.
  So why are we here today, Mr. Chairman? We are here considering this 
legislation so that auto dealers can violate the ECOA.
  Mr. HENSARLING. Mr. Chairman, I yield 3 minutes to the gentleman from 
Indiana (Mr. Stutzman).
  Mr. STUTZMAN. Mr. Chairman, I thank the chairman for his yielding and 
his work on this issue. I also thank Mr. Guinta for bringing this bill 
forward.
  Mr. Chairman, ever since the CFPB introduced its 2013 bulletin on 
indirect auto lending, the need for this legislation has been clear.
  First, the CFPB issued its bulletin in order to get around the 
rulemaking process for indirect auto lending. This kind of guidance is 
traditionally used as a mere restatement of law or to provide further 
explanation of rulemaking. It is not traditionally used to make a major 
policy like fundamentally altering the auto loan market.
  Second, it is clear that the CFPB is unwilling to publish online all 
of the data and assumptions it has relied upon for this guidance. 
Providing these details should be an obvious and easy step to implement 
for any credible government agency.
  Unfortunately, because the CFPB is not subject to the appropriations 
process, they seem unwilling to comply with even the most commonsense 
oversight by Congress. Therefore, H.R. 1737 is necessary to require the 
CFPB to provide for a notice and comment period before it can reissue 
any related guidance.
  Mr. Chairman, this compromise legislation represents fair and 
reasonable adjustments to the CFPB's regulatory guidance process 
intended to promote transparency and accountability for regulators. 
This legislation is truly a bipartisan effort that was supported in 
committee by 13 Members on the minority side of the aisle.
  I am also glad to see widespread support for this legislation from a 
range of groups, including the U.S. Chamber of Commerce, the National 
Automobile Dealers Association, the national RV Dealers Association, 
the Independent Community Bankers Association, and the Credit Union 
National Association.

[[Page 18432]]

  Mr. Chairman, last year I was proud to introduce legislation similar 
to Mr. Guinta's after hearing from so many auto dealers in my State the 
frustrations they had with this particular rule. I am proud to support 
this legislation, and I urge my colleagues on both sides of the aisle 
to help us promote greater transparency and accountability and bring 
common sense back to the marketplace.
  Again, I thank the gentleman from New Hampshire (Mr. Guinta).
  Ms. MAXINE WATERS of California. Mr. Chairman, what Mr. Stutzman is 
doing is trying to confuse people between a rule and a guidance. This 
is a guidance, and they are trying, through this legislation, to make 
guidance comply with the same kind of rules that the rules have to go 
through. So don't pay any attention to that. He is just trying to 
confuse people.
  Mr. Chairman, I yield 2 minutes to the gentlewoman from New York (Ms. 
Velazquez), a member of the Financial Services Committee.
  Ms. VELAZQUEZ. Mr. Chairman, I rise in strong opposition to H.R. 
1737.
  Mr. Chairman, this legislation is yet another attempt to obstruct the 
most important watchdog working on behalf of U.S. consumers, the CFPB.
  Since its creation, the agency has returned over $11 billion to more 
than 25 million consumers harmed by unfair and deceptive practices. Its 
work is absolutely essential for everyday Americans, giving them the 
security of knowing that there is someone on their side.
  One area where the CFPB's role is increasingly important is auto 
finance, where outstanding car and truck loan balances now reach $1 
trillion, the highest in history.
  Unfortunately, discrimination is still alive and well in the indirect 
auto lending marketplace. In the three settlements to date against Ally 
Financial, Fifth Third Bank, and Honda, the CFPB secured nearly $140 
million in borrower relief and penalties. It found that minority 
borrowers paid $200 more over the life of a car loan than White 
borrowers, even when controlling for borrowers' creditworthiness.
  The CFPB's findings are consistent with decades of litigation and 
research that confirm that discretionary markups in indirect auto 
lending cause millions of dollars in overpayments from minority 
borrowers. To further their work in this area, the CFPB issued specific 
guidance regarding auto lending practices.
  Unfortunately, H.R. 1737 will repeal this guidance and place absurd 
restrictions on the reissuance of any new guidance. These new 
restrictions would be unique to the CFPB and would place an 
unprecedented burden on the agency's issuance of guidance designed to 
help lenders comply with Federal fair lending laws. This undermines the 
basic role of the CFPB and will create uncertainty regarding the 
application of Federal lending laws in the auto finance sector.
  The Acting CHAIR (Mr. Smith of Nebraska). The time of the gentlewoman 
has expired.
  Ms. MAXINE WATERS of California. Mr. Chairman, I yield the 
gentlewoman from New York an additional 30 seconds.
  Ms. VELAZQUEZ. Doing so is a raw deal for car buyers, especially 
minorities, who continue to fall victim to deceptive and unfair 
practices.
  Let's let the CFPB do what it is supposed to do--protect the millions 
of consumers that will buy cars this year--and reject H.R. 1737. I urge 
a ``no'' vote on this misguided legislation.
  Mr. HENSARLING. Mr. Chairman, might I inquire how much time is 
remaining on each side.
  The Acting CHAIR. The gentleman from Texas has 15 minutes remaining. 
The gentlewoman from California has 13\1/2\ minutes remaining.
  Mr. HENSARLING. Mr. Chairman, I yield 3 minutes to the gentleman from 
Texas (Mr. Hinojosa), my Democratic colleague.
  Mr. HINOJOSA. Mr. Chairman, I rise today in support of H.R. 1737, the 
Reforming CFPB Indirect Auto Financing Guidance Act.
  I am proud to say that in my 19 years in Congress, I have been a 
champion of the consumer and have fought for their protection. As a 
member of the Financial Services Committee, I strongly supported the 
creation of the Consumer Financial Protection Bureau and continue to be 
a strident defender and proponent of CFPB.
  I support this bill to correct the CFPB's guidance with respect to 
indirect auto lending, which would increase the cost of consumer 
financing. In our effort to find discrimination in the marketplace, we 
must be careful not to push for policy solutions that hurt the very 
consumers we are trying to protect.
  This bill does not prevent nor hinder the CFPB or any agency from 
enforcing fair lending laws. Rather, it provides an opportunity to 
reissue the guidance in a more inclusive and transparent manner.
  As part of our mission to protect consumers, I urge the CFPB to work 
closely with stakeholders to improve the guidance in this important 
area. I also encourage the Bureau to develop and implement a financial 
literacy program aimed at teaching consumers the skills necessary to 
make informed financial decisions regarding the purchase of an auto 
through the use of financing. We need to do everything we can to ensure 
Americans have the basic financial literacy skills to enable them to 
navigate our increasingly complex financial system and make good, 
informed decisions.
  Mr. GUINTA. Will the gentleman from Texas yield?
  Mr. HINOJOSA. I yield to the gentleman from New Hampshire so that he 
may express support for financial literacy and offer to work with us to 
encourage the Bureau to develop a financial literacy program aimed at 
auto financing.
  Mr. GUINTA. I would like to reiterate that the CFPB has the authority 
and the tools to increase financial literacy skills to consumers. I 
would be more than happy to work with the gentleman personally to make 
sure that they better educate consumers when they are purchasing a car. 
That is something that is important and critical. I value the interest 
that the gentleman has on this component of the bill, and I plan to 
work with the gentleman.
  Mr. HINOJOSA. I thank the gentleman. I gladly accept his offer, and I 
look forward to working together to promote financial literacy, 
especially with respect to auto financing.
  Mr. Chairman, I urge my colleagues to support H.R. 1737.
  Ms. MAXINE WATERS of California. Mr. Chairman and Members, this is 
not about financial literacy. This is about raw discrimination.
  I yield 2 minutes to the gentleman from Maryland (Mr. Cummings), the 
ranking member of the Oversight and Government Reform Committee. He is 
a real fighter for freedom and justice.
  Mr. CUMMINGS. Mr. Chairman, I thank the gentlewoman for yielding, and 
I thank the gentlewoman for her strong leadership.
  Mr. Chairman, I rise today to oppose H.R. 1737. If this bill is 
enacted, it will cost minority auto purchasers millions of dollars.
  Car purchases are extremely complicated transactions. Most Americans 
make only a few in a lifetime, and they are not familiar with the many 
detailed terms and procedures of these transactions. One thing that is 
not complicated is that charging a markup just because a buyer is a 
minority is simply illegal.
  The Consumer Financial Protection Bureau protects minority purchasers 
against auto dealers that seek to charge abusive and predatory markups. 
The purpose of the bill before us today is to eliminate this 
protection--that is exactly what it is--leaving minority consumers at 
risk of being charged abusive and predatory interest rates.
  In 2013, the CFPB ordered Ally Bank to pay $80 million in damages and 
$18 million in penalties for imposing higher interest rates on 235,000 
minority borrowers. Just this year, the Bureau ordered Fifth Third Bank 
to pay $18 million in damages for permitting markups of as much as 2.5 
percent for minorities.
  Because this bill would prevent the CFPB from carrying out its duty 
to

[[Page 18433]]

protect minority borrowers, the administration has announced they would 
veto this bill.
  This House should reject H.R. 1737 and every repeated effort to 
undermine--and that is exactly what it is, to undermine--the CFPB.
  Mr. HENSARLING. Mr. Chairman, I yield 3 minutes to the gentleman from 
Georgia (Mr. David Scott), my Democratic colleague.
  Mr. DAVID SCOTT of Georgia. Mr. Chairman, ladies and gentlemen, I 
want to take a moment to point out why I am supporting this and am a 
cosponsor of this bill.
  First of all, to our leader, the ranking member who does an excellent 
job, she is absolutely right. We must go at discrimination with 
lenders. But, Mr. Chairman, the unintended consequence of this is not 
punishing the lenders who may or may not be doing discrimination. If we 
show it, they should. Unfortunately, this guidance goes directly at 
dealers and low- and moderate-income customers, African Americans and 
other minorities who will be denied, because it takes away the dealers' 
ability to discount interest rates and be flexible.
  Now, Mr. Chairman, there are 55 million unbanked and underbanked 
people in the United States. They don't have the bank. They are not 
going to Ally Bank.

                              {time}  1430

  But when they want, they have to buy a car. Some of them don't even 
have a credit card, but they have that dealer that can walk through the 
door. And if that dealer has the flexibility to be able to discount the 
interest rate, bringing a lower price to the car, they shouldn't be 
denied from having that opportunity to do it.
  Now, let me go to the racial issue. When you play the race card, you 
have got to make sure you play it right. That is all I am saying.
  When we looked at the CFPB and we looked at the methodology that they 
used to determine who the Black people were, they said: Hey, the best 
way of doing this is to go by the last names: Jackson, Williams, 
Johnson, Robinson.
  Yeah. A lot of Black people are named that, but there are an awful 
lot of White people that are named that, too.
  So is there any wonder, when the checks went out, that there were 
some happy White people, looking: Where did I get this money? Where did 
I get this $200 or $300 from?
  Now, ladies and gentlemen, I take a backseat to nobody when it comes 
to standing up and fighting for racial equality. My life's story is 
that. I integrated the school systems in Scarsdale, New York, where not 
only was I just the only Black kid in the school or in my class, but I 
was the only Black kid in the whole city of Scarsdale.
  My office mate in the Senate was Julian Bond. We went all across this 
country speaking for 40 years as a State representative, as a State 
senator, and now as a Congressman. My whole life has been for fighting 
this.
  But when you deal with racial discrimination, it has got to be right. 
The methodology that the CFPB used is flawed. It is absolutely flawed. 
In the process, the CFPB itself is being charged with racial 
discrimination.
  Now, all I am saying is what is fair is fair.
  The Acting CHAIR. The time of the gentleman has expired.
  Mr. HENSARLING. I yield the gentleman from Georgia an additional 1 
minute.
  Mr. DAVID SCOTT of Georgia. We are not asking to discontinue this. We 
are asking to go after where the discrimination is. But don't hurt the 
lower middle-income people who don't have the credit or don't have a 
credit card.
  They have to go in there and work with that dealer. If you take that 
out of the way of the dealer, you are hurting the very people that some 
of the people who are opposing our bill want to help.
  So, Mr. Chairman, let's get clarity here. Let's get truth here. All 
we are doing is asking the CFPB to come back, start over, get the right 
methodology, so you are getting the right people that you are sending 
the checks to, and also call in the Justice Department, the Federal 
Trade Commission, and the Federal Reserve, who are the ones under Dodd-
Frank that regulate the auto dealers and not auto lenders.
  Ms. MAXINE WATERS of California. Mr. Chairman, I yield myself such 
time as I may consume.
  Mr. Chairman and Members, all of the arguments that are used by the 
other side simply are not true.
  They claim that the CFPB does not have the authority. They do have 
the authority under the Equal Credit Opportunity Act.
  They claim that they didn't use the right methodologies, the same 
that is used by the Justice Department.
  They claim that the dealers can't give discounts. That is absolutely 
not true. They can.
  I yield as much time as he may consume to the gentleman from New York 
(Mr. Jeffries), a young man that has been leading an effort on the 
floor of Congress for justice for minorities and women consistently.
  Mr. JEFFRIES. Mr. Chairman, I thank the distinguished gentlewoman 
from California for yielding and for her leadership.
  Let's be clear. The opponents of this legislation are not playing the 
race card. America for centuries has played the race card--slavery, Jim 
Crow, lynchings, the Black Codes, institutional racism, unconscious 
bias--that continues to this day.
  Yes. Of course we have come a long way in the United States of 
America, but we still have a long way to go. Everyone should have 
recognized the fact a few months ago when those souls were killed in 
Charleston, South Carolina, that racism in many corridors in this 
country is still functional, in existence, and poisoning our society.
  So when we take a situation where African American consumers are 
paying higher interest rates for the same financial product when 
controlling for creditworthiness put in the context of history in this 
country, we are concerned.
  All we are simply saying is that, if we really believe in a country 
where everyone, regardless of color, has the opportunity to robustly 
pursue the American Dream, we need a level playing field. We need rules 
of engagement that apply to everyone, regardless of the color of their 
skin. We need equal opportunity.
  That doesn't exist right now in the automobile lending context. That 
is why I urge a ``no'' vote against this legislation. Let the CFPB do 
its work.
  Mr. HENSARLING. Mr. Chairman, I yield 3 minutes to the gentleman from 
Texas (Mr. Williams), one of the outstanding workers for H.R. 1737.
  Mr. WILLIAMS. Mr. Chairman, in full disclosure, my name is Williams, 
as Mr. David Scott had said. I am also an auto dealer, but my 
colleagues here in the House already know that. It is not something I 
am ashamed of. In fact, it is something I am very proud of.
  But Mr. Guinta's bill isn't just about auto dealers. It is about an 
agency that continues to act not in the best interest of the consumer, 
but bigger government.
  Well, Mr. Chairman, I am here this afternoon to give you a little 
perspective on that. As many small-business owners can tell you, the 
financial crisis of 2008 was the worst they had ever seen. Millions of 
Americans and thousands of small-business owners never recovered.
  In response, Congress passed the Dodd-Frank Act, which, in turn, 
created the CFPB. The CFPB was given broad jurisdiction over the 
financial services sector: banks, insurance companies, mortgage 
lenders, credit card companies, payday lenders. The list goes on and on 
and on.
  Dodd-Frank consisted of 2,300 pages of new laws and regulations. Mr. 
Chairman, I want to take a second and read from one of the sections of 
Dodd-Frank that has particular importance to us today. Section 1029 
says:
  The Bureau may not exercise any rulemaking, supervisory enforcement 
or any authority, including any authority to order assessment, over a 
motor vehicle dealer that is predominantly engaged in the sale and 
servicing of motor vehicles, the leasing and servicing of motor 
vehicles, or both.

[[Page 18434]]

  So how did we get here today? In 2013, the CFPB didn't propose a new 
rule or a new regulation. In fact, they didn't seek comments from 
industry, consumers, or even Congress. But, instead, they offered 
guidance.
  Since releasing this guidance in 2013, the CFPB has acknowledged that 
they did not analyze or estimate the economic impact it would have on 
customers. In addition, an independent study commissioned by the 
American Financial Services Association found several significant flaws 
in the Bureau's methodology, which led to inaccurate, incomplete, and 
unreliable conclusions about pricing disparities in the auto finance 
market.
  In addition, recent settlements from the CFPB and lenders have 
highlighted the Bureau's strong-arm tactics and inability to prevent 
fraudulent claims. At a hearing a few months ago, the Committee on 
Financial Services heard testimony about the lack of oversight 
implemented by the CFPB when paying claims to those who were 
potentially discriminated against.
  Mr. Chairman, what most don't understand is that auto dealers--I 
repeat--auto dealers--are driven by competition. We are driven by 
protecting our reputation, providing service to our customers, and 
serving our communities.
  When the CFPB issues fines on auto lenders for alleged discriminatory 
practices, they don't punish the dealers. They punish the consumer, the 
very people they are trying to supposedly protect, just as most 
government involvement does.
  Mr. Guinta's bill would finally bring transparency and clarification 
to a process that has had neither.
  Mr. Chairman, I know Director Cordray and all those at the CFPB think 
they can control my industry by controlling the lenders we do business 
with. But let's not lose sight on what the law says.
  I urge passage of H.R. 1737. Let your conscience be your guide.
  Ms. MAXINE WATERS of California. Mr. Chairman, I yield 2 minutes to 
the gentleman from California (Mr. Garamendi), a former insurance 
commissioner of California who has dealt with a lot of these issues.
  Mr. GARAMENDI. Mr. Chairman, I thank the gentlewoman.
  My colleague from California has raised a very significant issue 
here. It kind of helps to actually read the guidelines.
  I have spent 8 years of my life as a regulator trying to protect the 
consumers from unfair practices in the insurance industry, some of 
which dealt with the issue of credit.
  What we have here is an effort by the CFPB to give guidance--not a 
law, not a regulation, but guidance--to auto dealers and to indirect 
lenders on what they should do--not must do, but what they should do--
to obey the Equal Credit Opportunity Act, which the CFPB actually does 
have the power to enforce.
  By extension, an indirect lender stands in the place of an auto 
dealer in developing the terms of credit. That then makes the indirect 
lender subject to the Equal Credit Opportunity Act.
  It is pretty simple here. This is guidance about how you could 
monitor what you should do as a dealer or as an indirect lender in 
obeying the Equal Credit Opportunity Act.
  It is pretty simple. And when you don't do it, there are outlines 
about what you should do to deal with any problem that is found.
  I am going: What is the problem here? The problem here is obeying the 
law as an indirect lender where you actually have the power to direct 
and to determine what the loan is.
  Now, my history in regulating the insurance industry is that there is 
a pernicious and continuing discrimination that takes place, not 
necessarily Black, not necessarily Hispanic, but it exists in the 
poorer communities and keeps those communities down because they wind 
up paying a whole lot more for insurance, for credit, and for other 
economic policies. Pretty simple.
  The Acting CHAIR. The time of the gentleman has expired.
  Ms. MAXINE WATERS of California. I yield the gentleman an additional 
30 seconds.
  Mr. GARAMENDI. Let me wrap up very quickly, then.
  This is about being fair in the practices of lending. I understand 
the auto dealers and the indirect lenders would rather not, but there 
is a history here, as has been stated in the debate, of where lenders 
have been found to be out of compliance with the Equal Credit 
Opportunity Act.
  So what we are trying to do here with this opposition to this bill is 
saying to follow the guidance, follow the guidance and stay out of 
trouble. Pretty simple.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
Arkansas (Mr. Hill).
  Mr. HILL. Mr. Chairman, I rise today in support of my colleague from 
New Hampshire on his bipartisan bill to reform and assist our Nation's 
auto dealers and consumers and increase the oversight and transparency 
of the Consumer Financial Protection Bureau.
  Dodd-Frank explicitly prohibited the CFPB from regulating auto 
dealers, but their guidance on indirect auto lending is an end around 
to indeed do just that, regulate auto dealer sales.
  Not only is the CFPB's guidance inherently flawed, but the agency has 
not provided the opportunity for public comment or input, nor have they 
shared any of their analysis or assumptions on which they based their 
model.
  This guidance is another example of emerging government price 
regulation and fee setting in the financial services industry. We have 
always, as a part of our financial regulation, tried not to set price 
by regulatory directive. Instead, we have operated on a consumer 
disclosure and consumer education model.
  But price regulation is clearly what this guidance does. It is softer 
and more delicate in its language, but it clearly is leading towards 
price regulation.
  Consumer lending in banking is down among community banks. It has 
been cut in half over the past few years. One reason for that, one key 
reason for that, is the inability of a consumer bank to price for risk.
  Today's legislation is not about discrimination. It is about giving 
access to credit to people who need it and giving access to credit to 
them in the right way, particularly those families with limited 
resources.
  This bill in no way ties CFPB's hands. It merely gives the public an 
opportunity to comment on the Bureau's attempt to reshape the auto loan 
market.
  Whether it is in a rural area or an urban area, this pernicious 
expansion of price regulation in financial services by the Federal 
Government will have a negative effect on credit allocation in our 
communities.
  Mr. Chairman, I include in the Record a letter from the Independent 
Community Bankers of America.

                                             Independent Community


                                           Bankers of America,

                                    Washington, DC, July 27, 2015.
     Hon. Jeb Hensarling,
     Chairman, Committee on Financial Services, House of 
         Representatives, Washington, DC.
     Hon. Maxine Waters,
     Ranking Member, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Chairman Hensarling and Ranking Member Waters: On 
     behalf of the more than 6,000 community banks represented by 
     ICBA, I write to thank you for scheduling a markup for July 
     28 on important regulatory reform bills. We are particularly 
     pleased that a number of the bills scheduled for markup 
     reflect community bank regulatory relief advanced in ICBA's 
     Plan for Prosperity. We strongly encourage all committee 
     members to vote YES on the bills noted below:
       The Financial Institution Customer Protection Act (H.R. 
     766). Sponsored by Rep. Blaine Luetkemeyer, H.R. 766 is 
     designed to curtail the abuses of Operation Choke Point. The 
     bill would prohibit the federal banking agencies from 
     suggesting, requesting, or ordering a bank to terminate a 
     customer relationship unless the regulator put the order in 
     writing and specified a material reason for the action, among 
     other provisions.
       The Portfolio Lending and Mortgage Access Act (H.R. 1210). 
     Sponsored by Rep. Andy Barr, H.R. 1210 would provide that any 
     residential mortgage held in portfolio by the originator is a 
     ``qualified mortgage'' for the purposes of the Consumer 
     Financial Protection Bureau's ``ability to repay'' rule. H.R. 
     1210 will help preserve access to credit for customers of 
     community banks and other lenders.

[[Page 18435]]

       The Small Bank Exam Cycle Reform Act of 2015 (H.R. 1553). 
     Sponsored by Rep. Scott Tipton, H.R. 1553 would allow a 
     highly rated community bank with assets of less than $1 
     billion to use an 18 month exam cycle. ICBA supports a 24 
     month exam cycle for highly rated community banks. Because 
     examiners have more than sufficient information to monitor a 
     community bank from offsite, we believe that this change 
     would not compromise supervision, and would actually increase 
     safety and soundness by allowing examiners to focus their 
     limited resources on the true sources of risk.
       The Reforming CFPB Indirect Auto Financing Guidance Act 
     (H.R. 1737). Sponsored by Rep. Frank Guinta, H.R. 1737 would 
     effectively nullify the CFPB's guidance on indirect auto 
     lending. In proposing and issuing guidance primarily related 
     to indirect auto financing, the CFPB would be required to 
     provide for a public notice and comment period, make 
     available all studies, data, and other information on which 
     the guidance is based, and meet other requirements intended 
     to ensure the process is open, transparent, and responsive to 
     public input. The CFPB would also be required to consult with 
     the Board of Governors of the Federal Reserve System, the 
     Federal Trade Commission, and the Department of Justice. ICBA 
     suggests strengthening H.R. 1737 by requiring the CFPB to 
     also consult with the Federal banking regulators, the Federal 
     Deposit Insurance Corporation and the Office of the 
     Comptroller of the Currency.
       Financial Institutions Examination Fairness and Reform Act 
     (H.R. 1941). Sponsored by Reps. Lynn Westmoreland and Carolyn 
     Maloney, H.R. 1941 would go a long way toward improving the 
     oppressive examination environment that many community banks 
     experience during and following an economic downturn.
       Among other provisions, H.R. 1941 would create an Office of 
     Independent Examination Review within the Federal Financial 
     Institutions Examination Council and give financial 
     institutions a right to an expedited, independent review of 
     an adverse examination determination before the Office's 
     Director or before an independent administrative law judge.
       ICBA also supports the provisions of H.R. 1941 that would 
     create more consistent and commonsense criteria for loan 
     classifications and capital determinations. Establishing 
     conservative, bright-line criteria will allow lenders to 
     modify loans, as appropriate, without fear of being 
     penalized. If these standards become law, they will give 
     bankers the flexibility to work with struggling but viable 
     borrowers and help them maintain the capital they need to 
     support their communities.
       The Homebuyers Assistance Act (H.R. 3192). Sponsored by 
     Rep. French Hill, H.R. 3192 would provide a critical safe 
     harbor from enforcement actions for compliance errors arising 
     from the implementation of the Consumer Financial Protection 
     Bureau's Truth in Lending Act/Real Estate Settlement 
     Procedures Act Integrated Disclosures, provided the lender 
     has acted in good faith to implement and comply with new 
     regulations. Without this safe harbor, consumer mortgage 
     closings are likely to be delayed due to the enormous 
     complexity of the new rules and fear of excessive enforcement 
     actions for minor errors.
       Taken together, the bills noted above would provide 
     significant regulatory relief for community banks to the 
     benefit of the customers and communities they serve. We will 
     continue to press lawmakers to enact these sensible 
     regulatory relief measures into law.
       Thank you again for bringing these bills before the 
     committee.
           Sincerely,
                                                   Camden R. Fine,
                                                  President & CEO.

                              {time}  1445

  Ms. MAXINE WATERS of California. Mr. Chairman, I yield 2 minutes to 
the gentleman from Maryland (Mr. Sarbanes), a true champion for 
consumers.
  Mr. SARBANES. I thank the gentlewoman for yielding.
  Mr. Chairman, I oppose H.R. 1737.
  The title of this legislation, the Reforming CFPB Indirect Auto 
Financing Guidance Act, is misleading. The legislation is not about 
``reforming'' the guidance of the CFPB. It is about erasing and 
undermining CFPB's guidance altogether and suspending the Bureau's good 
work when it comes to monitoring and identifying discrimination in auto 
lending. Both the CFPB and the Department of Justice have found 
repeatedly that dealer discretion in determining the interest rates on 
auto loans leads to systemic discrimination against minority borrowers.
  Supporters have argued that this legislation would bring clarity and 
transparency to the auto loan market, but we must ask ourselves: 
Clarity and transparency for whom? It sure doesn't bring transparency 
for the American public when it comes to auto dealers who have been 
found to have been targeting minority communities with discretionary 
interest rate markups, increasing the carrying costs of car ownership 
for individuals who too often cannot afford the increased financial 
burden.
  Of course, not all auto dealers engage in such practices, and we must 
be careful in painting with a broad brush. In fact, I believe the 
CFPB's guidance is a useful tool to protect the reputation of auto 
dealers who do the right thing by their customers--many of whom are 
leaders in their communities--against the predatory practices of a 
select few who tarnish the industry.
  We should have clarity and transparency--clarity and transparency in 
how interest rates are determined so as to prevent discriminatory 
lending practices--but let the CFPB do its job, the Consumer Financial 
Protection Bureau.
  Wall Street, the lenders, the mortgage companies, the big banks blew 
up our economy in 2009. They were exploiting a lot of consumers across 
the country. We set up the CFPB to protect financial consumers across 
the country. Let the CFPB do the job that it was given, which it is 
doing very well.
  I urge my colleagues to reject H.R. 1737 and support the CFPB's 
ongoing work on behalf of American consumers.
  Mr. HENSARLING. Mr. Chairman, may I inquire as to how much time is 
remaining on both sides.
  The Acting CHAIR. The gentleman from Texas has 3\1/2\ minutes 
remaining, and the gentlewoman from California has 4\1/2\ minutes 
remaining.
  Mr. HENSARLING. Mr. Chairman, I yield 2 minutes to the gentleman from 
Pennsylvania (Mr. Kelly).
  Mr. KELLY of Pennsylvania. I thank the gentleman.
  Mr. Chairman, I stand in strong support of H.R. 1737, and I will tell 
you why. It is because it is what I have done and what my family has 
done for almost 60 years. We are a third-generation automobile dealer.
  I can tell you that it is a people business, not a White person 
business, not a Black person business, not a Brown person business, not 
a Red person business, or a Yellow person business. It is a business 
that is done face-to-face. I have sat across the desk from many people, 
lower income people, who cannot afford to get a car because they don't 
have the ability to negotiate the auto loan.
  It is our business, and I am stunned by people who have never done 
what we have done who have somehow decided that we are racist and that 
we are overcharging people. We are doing exactly the opposite, and you 
are doing exactly the opposite. You are discriminating against the very 
people who need our help to buy cars. We negotiate the deal for them. 
We negotiate the cost down. So to stand here today and think that 
somehow this is racist--if I were a person of color, I would be 
offended that you would even begin to suggest that I do not understand 
how to negotiate and that I do not understand who to trust and who not 
to trust.
  Three generations of Kellys have sold over 150,000 cars. You don't do 
that by cheating people. You don't do that by being a racist. You don't 
do that by discriminating against people. You do that by working with 
people. It is stunning in this House--America's House--that we would 
reduce this down to an issue of color and not of cooperation. The 
ability to get these people transportation--private transportation--
falls on the shoulders of those who are the dealers. We negotiate in 
their best interest.
  How stunning to think that somehow we are these predators who are 
just taking advantage of these poor people who don't have any financial 
literacy. That, my friends, ultimately, is the biggest insult you could 
give people of color or people of gender. It is absolutely incredible 
to me that we would bring it to this issue.
  If you don't understand our business, please learn about it. I don't 
have to have a book of talking points in order to talk about what we 
have done our whole life.
  I stand in strong support of H.R. 1737 and in strong support of 
common sense and the American way.
  The Acting CHAIR. Members are reminded to direct their remarks to the 
Chair.

[[Page 18436]]


  Ms. MAXINE WATERS of California. Mr. Chairman and Members, no one on 
this side of the aisle mentioned the word ``racist.'' It is only coming 
out of the mouths of the people on the opposite side of the aisle.
  I yield 2 minutes to the gentleman from Colorado (Mr. Perlmutter), a 
member of the Financial Services Committee.
  Mr. PERLMUTTER. I thank the gentlewoman from California, my ranking 
member. I appreciate the emotionally charged conversation that we are 
having here on the House floor today.
  Mr. Chairman, I rise in support of H.R. 1737.
  In the 14th Amendment to the Constitution of the United States, there 
are two basic principles among the others that are noted. One is that 
no one shall be deprived of life, liberty, or property without due 
process of law. The other one is that no one shall be denied equal 
protection under the laws of the United States of America.
  We have kind of a collision of these two principles today. One is 
that there is the potential for the disparate treatment of people--
discrimination--which all of us abhor and that we want to see rooted 
out by root and branch. The other is that, before you do a major policy 
in this country, there is always notice and an opportunity to be heard. 
That is where the collision comes in today.
  The Consumer Financial Protection Bureau issued a bulletin without, 
really, notice and an opportunity to be heard to determine whether or 
not there was disparate treatment or whether methodologies that 
indicate there is are accurate. In fact, what we have seen is, 4 out of 
10 times, it can be inaccurate based on this bulletin.
  So H.R. 1737, with as much emotion as it has raised, asks the CFPB to 
go back and check what they have done. At no time is there any 
limitation to CFPB's or to the Department of Justice's rights under the 
Equal Credit Opportunity Act to go after discriminating individuals, to 
go after bad actors.
  I would suggest to the CFPB that, while they are looking at their 
bulletin again, if they see evidence of discrimination, they refer it 
to the Justice Department and that it be condemned loudly and roundly.
  Mr. HENSARLING. Mr. Chairman, I reserve the balance of my time.
  Ms. MAXINE WATERS of California. Mr. Chairman, I yield myself the 
balance of my time.
  Mr. Chairman and Members, this discussion today has been about 
discrimination. This discussion today is about the very powerful 
automobile dealers who come to the Congress of the United States and 
use their considerable influence to get the Members of Congress to get 
rid of a guidance that was put together by the Consumer Financial 
Protection Bureau.
  They don't want the guidance because they don't want to be guided in 
how not to discriminate. They have gotten away for years with markups, 
and they have gotten away for years with targeting certain communities. 
For those who say that this has not happened, you are absolutely wrong. 
Minority communities, poor communities are targeted by every scheme and 
every fraudulent operation that you can think of.
  Whether we are talking about this markup that causes minorities to 
pay more for automobiles or payday loans or whether we are talking 
about these private, postsecondary rip-off schools, communities of 
color are not only targeted in these ways, but we discovered in the 
2008 subprime meltdown that communities have been targeted and that 
minorities who have the same credit ratings as others who are given 
loans--minorities who pay their bills--were charged more in interest 
rates for their mortgages than others.
  This is not something that we are making up. The people on the 
opposite side of the aisle will have you believe they are working in 
the best interest of these minorities who continue to be ripped off. I 
don't have to say much, if anything, to prove that that is not true. 
Just take a look at who is supporting them. We are supported by the 
NAACP, the National Council of La Raza, the National Association of 
Minority Auto Dealers, the Center for Responsible Lending, the National 
Consumer Law Center, the Center for Working Families, the Consumers 
Union. There are 67 consumer organizations who are sick and tired of 
seeing minorities being ripped off.
  We are often counseled by those who say we are not pulling ourselves 
up by our bootstraps, that we are not doing enough. Why do you think a 
wealth gap exists? It exists because these fraudulent schemes are 
supported by people like those on the other side of the aisle.
  I urge everyone in Congress to vote ``no'' on this discriminatory 
legislation.
  Mr. Chairman, I yield back the balance of my time.
  Mr. HENSARLING. Mr. Chairman, I yield myself the balance of my time.
  It is fascinating to me how often the ranking member talks about 
discrimination, but she didn't seem to talk about the discrimination 
coming out of the CFPB. She knows good and well, Mr. Chairman, that we 
have had witness after witness not come up with junk science about some 
disparate impact methodology that is proven wrong, but we have had 
actual witnesses come and talk about discrimination at the CFPB, which, 
apparently, the other side is now holding up as a paragon of virtue to 
enforce our civil rights laws.
  We have had the inspector general come and say, at the CFPB, 
minorities are underrepresented in upper pay bands. The inspector 
general says minority applicants are not hired in proportion to 
qualifications. The inspector general says minority employees receive 
lower performance ratings. We have had one division of the CFPB that 
employees refer to as the ``plantation.'' This is in the 21st century? 
Now the ranking member wants to hold up the CFPB as some paragon of 
virtue because they use junk science--a methodology they admit 
themselves overrepresents minority populations?
  This is about due process, Mr. Chairman, due process for every 
American. We can't have some rogue agency putting out guidance and not 
allowing any public comment. We cannot allow this agency, regardless of 
what its motivations may be, to ultimately take away the credit 
opportunities of hard-working Americans who are trying to get ahead. We 
cannot let this rogue agency increase prices.
  It is time for us to support the legislation. I encourage all Members 
to support it.
  Mr. Chairman, I yield back the balance of my time.
  Ms. NORTON. Mr. Chair, I join many of my Democratic colleagues, as 
well as the NAACP, the Leadership Conference on Civil and Human Rights, 
the National Council of La Raza, the National Association of Minority 
Automobile Dealers, and many other civil rights groups, in opposing 
H.R. 1737, the Reforming CFPB Indirect Auto Financing Guidance Act, a 
bill that would significantly diminish the Consumer Financial 
Protection Bureau's (CFPB) ability to protect consumers from racial 
discrimination in the auto lending market and give auto dealers a leg 
up in charging higher interest rates, and, as studies have shown, in 
discrimination. In 2013, the CFPB issued guidance that was aimed at 
combatting these biases in the auto lending industry--because of a 
practice used by car dealers known as ``markups,'' people of color were 
paying more for car loans than their white counterparts with similar or 
identical credit histories.
  As the former chair of the Equal Employment Opportunity Commission, I 
am dismayed by the practice of ``markups,'' which allows discriminatory 
car dealers, who get a cut of the additional charges and fees that 
markups provide, to profit from their bad behavior. The CFPB has done 
important work toward eradicating discriminatory lending practices. I 
oppose this bill, and I urge my colleagues to do the same.
  Mr. BLUMENAUER. Mr. Chair, I will vote against H.R. 1737, the 
Reforming CFPB Indirect Auto Financing Act. There are arguments to be 
made on both sides of this debate, and I am confident that the people 
I've worked with over the years in the auto industry are straight 
shooters. It is clear, however, that there are areas of serious abuse. 
The Consumer Financial Protection Bureau (CFPB) has found that there 
are instances where auto lenders, including some dealers, charge higher 
interest rates for people of color than they charge white car buyers 
with similar credit worthiness

[[Page 18437]]

and financial standings. These higher interest rates come in the form 
of on-site and undisclosed interest rate markups. Several lawsuits have 
highlighted these matters.
  I understand there are alternative arguments. Auto dealers should 
have the flexibility to give car buyers the best price possible, and 
interest rate negotiations can be a good way to save consumers money 
and to streamline the sales process. Further, CFPB's mandate to enforce 
the Equal Credit Opportunity Act and prevent discrimination in all 
lending was clear even before the 2013 guidance targeted by this 
legislation.
  On balance, however, it is important not to undercut the CFPB as the 
administration is working hard to protect it. Perennial Republican 
budget proposals attempt to limit or eliminate funding for the CFPB, 
and earlier this fall the House Financial Services Committee passed 
legislation that would replace the CFPB with a politically appointed 
committee.
  I'm hopeful that regardless of the outcome of this debate that there 
is a way to be able to work in a more cooperative basis on this issue. 
I'm interested in how we both meaningfully address real concerns while 
simultaneously protecting consumers and the delicate momentum of the 
newly-created CFPB under continuous attack.
  The Acting CHAIR. All time for general debate has expired.
  Pursuant to the rule, the bill shall be considered for amendment 
under the 5-minute rule. The bill shall be considered as read.
  The text of the bill is as follows:

                               H.R. 1737

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Reforming CFPB Indirect Auto 
     Financing Guidance Act''.

     SEC. 2. NULLIFICATION OF AUTO LENDING GUIDANCE.

       Bulletin 2013-02 of the Bureau of Consumer Financial 
     Protection (published March 21, 2013) shall have no force or 
     effect.

     SEC. 3. GUIDANCE REQUIREMENTS.

       Section 1022(b) of the Consumer Financial Protection Act of 
     2010 (12 U.S.C. 5512(b)) is amended by adding at the end the 
     following:
       ``(5) Guidance on indirect auto financing.--In proposing 
     and issuing guidance primarily related to indirect auto 
     financing, the Bureau shall--
       ``(A) provide for a public notice and comment period before 
     issuing the guidance in final form;
       ``(B) make available to the public, including on the 
     website of the Bureau, all studies, data, methodologies, 
     analyses, and other information relied on by the Bureau in 
     preparing such guidance;
       ``(C) redact any information that is exempt from disclosure 
     under paragraph (3), (4), (6), (7), or (8) of section 552(b) 
     of title 5, United States Code;
       ``(D) consult with the Board of Governors of the Federal 
     Reserve System, the Federal Trade Commission, and the 
     Department of Justice; and
       ``(E) conduct a study on the costs and impacts of such 
     guidance to consumers and women-owned, minority-owned, and 
     small businesses.''.

  The Acting CHAIR. No amendment to the bill shall be in order except 
those printed in House Report 114-340. Each such amendment may be 
offered only in the order printed in the report, by a Member designated 
in the report, shall be considered as read, shall be debatable for the 
time specified in the report, equally divided and controlled by the 
proponent and an opponent, shall not be subject to amendment, and shall 
not be subject to a demand for division of the question.


                  Amendment No. 1 Offered by Mr. Gosar

  The Acting CHAIR. It is now in order to consider amendment No. 1 
printed in House Report 114-340.
  Mr. GOSAR. Mr. Chairman, I have an amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 4, line 11, insert ``veteran-owned,'' after 
     ``minority-owned,''.

  The Acting CHAIR. Pursuant to House Resolution 526, the gentleman 
from Arizona (Mr. Gosar) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Arizona.

                              {time}  1500

  Mr. GOSAR. Mr. Chairman, I rise today to offer a commonsense 
amendment to H.R. 1737.
  This simple amendment ensures that any costs or potential impacts to 
any and all veteran-owned businesses are considered and included in the 
study required by this bill for any future auto financing guidance that 
may be put forth by the Consumer Financial Protection Bureau.
  The three main categories that the SBA utilizes for set-aside 
government contracts are women-owned, minority-owned, and veteran-owned 
businesses. The base bill requires a report that would include any cost 
or impacts associated with new guidance for minority-owned businesses 
and women-owned businesses.
  I think we should all agree that it only makes common sense, then, to 
also consider any costs or implications for our Nation's heroes and 
veteran-owned businesses that may arise from any future guidance being 
considered.
  Our servicemen and -women already face tough challenges finding work 
when they return from service. In recent years, veterans' unemployment 
numbers have been some of the highest in the country and, at times, 
have been in double digits. Earlier this year, post-9/11 veterans faced 
unemployment numbers north of 7.2 percent. We shouldn't let any 
potential future guidance from an already rogue agency created under 
Dodd-Frank exacerbate employment hurdles for our Nation's veterans.
  One week ago today, we celebrated Veterans Day and the patriotic 
service that so many men and women have given to this great Nation. We 
have asked these heroes to risk their lives for this country, and many 
of our veterans have answered that call time and time again, including 
multiple tours overseas. Most veterans return from service seeking not 
only to reintegrate and establish normal lives, but to continue serving 
their country by contributing to the workforce, finding jobs, and even 
creating jobs for others by starting small businesses.
  My amendment is a simple measure and will help ensure veteran-owned 
businesses are not harmed by any future auto financing guidance put 
forth by CFPB.
  Chairman Hensarling supports this amendment. I thank the chairman for 
his support and also for bringing forth this commonsense bill that 
rejects this misguided guidance. I also applaud the chairman and 
committee for everything they do to advocate for small businesses and 
job creators throughout the country.
  I ask that all my colleagues support our veterans and the businesses 
they own by voting in favor of my commonsense amendment.
  I reserve the balance of my time.
  Ms. MAXINE WATERS of California. Mr. Chairman, I claim time in 
opposition to the amendment.
  The Acting CHAIR. The gentlewoman is recognized for 5 minutes.
  Ms. MAXINE WATERS of California. I yield myself such time as I may 
consume.
  Mr. Chairman, this amendment compounds one of the underlying problems 
that I have expressed in my opposition to H.R. 1737.
  While I have been and continue to be one of Congress' most vocal 
supporters of minority-owned businesses, further expanding an already 
unnecessary cost-benefit study concerning the impacts of nonbinding 
policy guidance is unproductive and only increases the likelihood that 
future guidance designed to actually help lenders comply with the law 
is further delayed or never issued.
  Mr. Chairman and Members, I want you to understand what is being said 
by the opposite side of the aisle. They basically are saying: Help me 
to look out for our veterans and make sure that they don't have any 
guidance that would impede their ability to do business. Well, I mean, 
that is kind of a made-up problem.
  This is not a problem. Simply, what is happening by the attempt to 
throw veterans into this is to get Members thinking ``perhaps I want to 
support this amendment because I don't want to be thought of as not 
supporting veterans.'' When you talk about cost-benefit analysis and 
studies, what you are talking about is: How do I tie up the agency? How 
do I create impediments to the agency being able to do its job.
  This Congress supports veterans in so many ways. We support them in 
their

[[Page 18438]]

quest to do business, and we have laws on the books that will help them 
to successfully get into business. We support them in housing. We 
support them with better health care.
  I don't want any Members of Congress to think somehow this kind of 
made-up amendment is something that really they should be supporting if 
they want to help veterans. This is simply a way by which to get you to 
do something, making you think you are supporting veterans and thinking 
you cannot oppose it.
  This is an unnecessary amendment, and it gets in the way of good 
guidance coming out of the Consumer Financial Protection Bureau, so I 
would ask you to vote ``no'' on this amendment.
  I reserve the balance of my time.
  Mr. GOSAR. I can't believe, Mr. Chairman, what I just heard. I just 
can't believe it. I hope that veterans who are watching C-SPAN today 
are listening carefully, listening very carefully about this amendment.
  The three divisions which it oversees, the veterans were left out, 
and we just want to make sure that our veterans are included in any 
study that CFPB would go forward with.
  That is sad. That is sad.
  When we talk about the Veterans Administration being so pristine, 
when we look at their healthcare system, it is 50 percent worse than it 
was a year ago. Many of the veterans that I have in rural Arizona are 
struggling to find anybody that will even hear from them.
  What a sad shame. What an absolute shame.
  So I actually would ask my colleagues to vote for this amendment. It 
is pretty straightforward. I think America gets it.
  I reserve the balance of my time.
  Ms. MAXINE WATERS of California. I yield back the balance of my time.
  Mr. GOSAR. Mr. Chairman, I yield 30 seconds to the gentleman from 
Texas (Mr. Hensarling).
  Mr. HENSARLING. Mr. Chairman, I urge all Members to adopt this 
amendment.
  I must admit, if people all over America are wondering why it is so 
difficult to get something done on a bipartisan basis, traditionally, 
the least controversial thing we do here is study something. What is 
even less controversial is coming together on behalf of our veterans, 
yet we have the ranking member of this committee opposing both. I hope 
the American people are watching closely.
  Again, I think this is a very commonsense, modest amendment by the 
gentleman from Arizona. I encourage all Members to vote for it.
  Mr. GOSAR. Mr. Chairman, once again, I ask all Members to vote for 
this.
  I yield back the balance of my time.
  The Acting CHAIR (Mr. Byrne). The question is on the amendment 
offered by the gentleman from Arizona (Mr. Gosar).
  The amendment was agreed to.


            Amendment No. 2 Offered by Mr. Smith of Missouri

  The Acting CHAIR. It is now in order to consider amendment No. 2 
printed in House Report 114-340.
  Mr. SMITH of Missouri. Mr. Chairman, I have an amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 4, line 12, strike the first period and insert ``, 
     including consumers and small businesses in rural areas.''.

  The Acting CHAIR. Pursuant to House Resolution 526, the gentleman 
from Missouri (Mr. Smith) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Missouri.
  Mr. SMITH of Missouri. Mr. Chairman, the American people have been 
misled. They were incorrectly told that Dodd-Frank was meant to go 
after big banks and Wall Street. However, in my rural congressional 
district, the effects of this law and its close to 500 regulations have 
been devastating.
  The total economic cost of Dodd-Frank-based regulations has eclipsed 
$35 billion and over 60 million hours of paperwork burdens. That is the 
equivalent of 30,000 employees a year dedicated solely to regulatory 
paperwork. A new army of regulators aren't the kind of jobs that 
Americans were promised.
  The biggest and most costly regulation to come out of Dodd-Frank is 
the deceptively named Consumer Financial Protection Bureau, an 
unconstitutional, uncontrollable, and unaccountable agency whose total 
negative impact on our economy won't be known for decades.
  The CFPB was supposed to protect consumers from the predatory 
practices of financial institutions. Instead, it has limited Americans' 
access to credit, the ability to be financially independent, and 
impeded the availability of homes and, in this case, cars. The CFPB 
achieved this by hiring big, spending big, and regulating big.
  The CFPB started with a staff of 178 in 2011 but now has close to 
2,000 employees. In that same period, its annual spending grew from $10 
million to, now, $600 million. The safest place to find a job in this 
government economy is with a Federal financial regulator. In the last 5 
years, those regulators have seen a 16 percent increase in job growth.
  The CFPB still has more regulations and guidance in its pipeline just 
ready to roll out and crush rural America. That is why this amendment 
is so important.
  In the endless search for a job in this economy, many Americans are 
forced to migrate to urban areas. In 2013, over half of all the rural 
counties in the United States actually shrank in population. In 2014, 
according to the Department of Labor, rural counties lost 330,000 jobs, 
while metropolitan counties gained over 3 million jobs. The last thing 
Washington should be doing is authoring regulations which further 
enable this trend.
  With adoption of H.R. 1737 and this amendment, we are telling the 
CFPB that, when you issue regulations like this, in addition to 
analyzing the impact on women-owned, minority-owned, and small 
businesses, you must also take a look at those regulations' impact on 
rural businesses and rural consumers.
  My amendment is a simple one, but it would go a long way to providing 
some clarity for the folks of Missouri's Eighth Congressional District 
and all of those Americans living in rural communities across the 
Nation. While 1600 Pennsylvania Avenue might be looking at ways to make 
their life harder, this body, this Chamber, will continue to fight to 
make sure the Federal Government stays out of their way.
  I thank my friend and colleague from New Hampshire for introducing 
this legislation. Burdensome regulation is a problem that hits rural 
America the hardest. I urge adoption of the amendment.
  I reserve the balance of my time.
  Ms. MAXINE WATERS of California. I claim time in opposition to the 
amendment.
  The Acting CHAIR. The gentlewoman is recognized for 5 minutes.
  Ms. MAXINE WATERS of California. I yield myself such time as I may 
consume.
  Mr. Chairman and Members, I am in opposition to this bill because it 
is simply another study, another cost to government, another 
unnecessary cost. While my friends on the opposite side of the aisle 
always claim that they are reducing the cost of government, these 
studies do very little.
  As a matter of fact, instead of a study, some of these Members who 
represent rural areas ought to become real advocates for their 
constituencies. They charge many of us as being advocates for health 
care, education, housing, and transportation, all of which they lack in 
their communities, but you never see them fighting for it. If it were 
not for some of us who are out there demanding better health care, 
better transportation systems, better education, and fighting for those 
who get ripped off by these fraudulent businesses every day, they 
wouldn't have any protection because they send too many Members to 
Congress who mislead them on other kinds of issues, but when it comes 
to their economics, you cannot find them anywhere.
  So, instead of a study, another study, another cost to government, 
why don't

[[Page 18439]]

they become real advocates for their constituency? Why is it that we 
don't have transportation systems in rural communities? Why is it they 
have to travel miles for health care? It is because they have 
Representatives whom they send to Congress who are really not 
representing their real interests. They may get their colleagues to 
vote for yet another study because they don't do anything that is real 
and substantive for their communities.
  I yield back the balance of my time.
  Mr. SMITH of Missouri. Mr. Chairman, I urge adoption of the 
amendment.
  I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Missouri (Mr. Smith).
  The amendment was agreed to.


            Amendment No. 3 Offered by Ms. Sewell of Alabama

  The Acting CHAIR. It is now in order to consider amendment No. 3 
printed in House Report 114-340.
  Ms. SEWELL of Alabama. Mr. Chairman, I have an amendment at the desk 
listed as Sewell Amendment No. 3.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Add at the end of the bill the following:

     SEC. 4. RULE OF CONSTRUCTION.

       Nothing in this bill shall be construed to apply to 
     guidance issued by the Bureau of Consumer Financial 
     Protection that is not primarily related to indirect auto 
     financing.

  The Acting CHAIR. Pursuant to House Resolution 526, the gentlewoman 
from Alabama (Ms. Sewell) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentlewoman from Alabama.
  Ms. SEWELL of Alabama. Mr. Chairman, I rise today in support of my 
amendment to H.R. 1737.
  My amendment is a commonsense and straightforward amendment. It 
simply states that nothing in this bill shall be construed to apply to 
guidance issued by the CFPB that is not primarily related to indirect 
auto financing.
  This amendment is intended to help ensure that the underlying bill in 
no way prohibits, disrupts, or affects the enforcement of other fair 
lending laws or guidance that protects millions of Americans from 
unfair or discriminatory lending practices.
  The underlying bill, H.R. 1737, provides the CFPB with criteria to 
consider when issuing further guidance on indirect auto lending. While 
I agree that the CFPB should reevaluate its recent guidance, we should 
also ensure that the scope of this legislation stays narrow and applies 
only to indirect auto financing.
  Mr. Chairman, I applaud the CFPB's efforts to protect consumers from 
discriminatory lending practices. We can all agree that no one supports 
or should condone abusive or discriminatory practices in auto lending 
or in any area of the marketplace. However, it is our job as Members of 
Congress to offer guidance and constructive critique to our regulatory 
agencies to enforce and ensure that regulations are pragmatic and 
workable.
  This noncontroversial amendment simply clarifies that the other 
valuable tools possessed by the CFPB are not infringed upon and ensures 
that there is no room for ambiguity. The CFPB plays a critical role in 
protecting consumers and buyers. My amendment helps ensure that laws 
like the Equal Credit Opportunity Act and other fair lending laws are 
not inadvertently or directly affected by this bill.

                              {time}  1515

  My amendment helps ensure that the Bureau continues to play this role 
while hardworking Americans continue to have access to the necessary 
credit to purchase any central mode of transportation. I urge support 
of this amendment.
  Mr. Chair, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Chairman, I ask unanimous consent to claim the 
time in opposition to the amendment, although I am not opposed.
  The Acting CHAIR (Mr. Smith of Missouri). Is there objection to the 
request of the gentleman from Texas?
  There was no objection.
  The Acting CHAIR. The gentleman from Texas is recognized for 5 
minutes.
  Mr. HENSARLING. Mr. Chairman, the gentlewoman from Alabama is a 
valued member of the Committee on Financial Services. The absolute 
worst thing I could say about her amendment is it might be redundant. 
Hopefully it is. But if it is not, we want to simply clarify, again, 
that the underlying bill from the gentleman from New Hampshire only 
deals with this auto finance guidance.
  Again, absolutely nothing in the underlying bill to H.R. 1737 in any 
way, shape, or form affects the CFPB's ability to enforce the Equal 
Credit Opportunity Act. If this clarification is needed, I am happy 
that the gentlewoman is offering it, and I would urge its adoption.
  Mr. Chairman, I yield back the balance of my time.
  Ms. SEWELL of Alabama. Mr. Chairman, I yield such time as she may 
consume to the gentlewoman from California (Ms. Waters), the ranking 
member of the committee.
  Ms. MAXINE WATERS of California. Mr. Chairman, I thank the 
gentlewoman for yielding time.
  As Mr. Hensarling said, it may be redundant, but that is okay. It 
reinforces basically what we have been talking about in relationship to 
1737.
  I will just take a moment to say how proud I am of the Consumer 
Financial Protection Bureau, how proud I am of Mr. Cordray, how pleased 
I am that this is the centerpiece of the Dodd-Frank reform, how pleased 
I am that we now have an agency that is looking out for consumers.
  Prior to the Consumer Financial Protection Bureau, our regulatory 
agency said their job was for safety and soundness. They forgot about 
the consumers; they were dropped off the agenda.
  Now we have a Consumer Financial Protection Bureau that is 
challenging the practices of many who claim they are in legitimate 
businesses. They are challenging them. They are saying to them: No 
longer can you rip off our consumers. No longer can you target 
minorities. No longer can you have discriminatory practices.
  Thank God for the Consumer Financial Protection Bureau.
  Ms. SEWELL of Alabama. Mr. Chairman, I want to thank the ranking 
member, Congresswoman Waters, for her diligence on this committee. She 
serves as a model for all of us in her vigor and fervor for making sure 
that we are not discriminating against average Americans. All of us 
agree that nothing we do should be about discriminating or adding to 
the effects of discrimination.
  I ask for support of this amendment.
  Mr. Chairman, I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentlewoman from Alabama (Ms. Sewell).
  The amendment was agreed to.
  The Acting CHAIR. There being no further amendments, under the rule 
the committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Byrne) having assumed the chair, Mr. Smith of Missouri, Acting Chair of 
the Committee of the Whole House on the state of the Union, reported 
that that Committee, having had under consideration the bill (H.R. 
1737) to nullify certain guidance of the Bureau of Consumer Financial 
Protection and to provide requirements for guidance issued by the 
Bureau with respect to indirect auto lending, and, pursuant to House 
Resolution 526, he reported the bill back to the House with sundry 
amendments adopted in the Committee of the Whole.
  The SPEAKER pro tempore. Under the rule, the previous question is 
ordered.
  Is a separate vote demanded on any amendment reported from the 
Committee of the Whole? If not, the Chair will put them en gros.
  The amendments were agreed to.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.
  The SPEAKER pro tempore. The question is on the passage of the bill.

[[Page 18440]]

  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. GUINTA. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.

                          ____________________