Republicans are using the Congressional Review Act to roll back a five-year-old CFPB guidance on car loan discrimination — and that’s just the beginning.
By Emily Stewart Apr 17, 2018, 4:40pm EDT
The Senate is on the verge of getting rid of a consumer protection measure meant to stop car dealers from charging more for car loans based on race. And the vote is just the start of lawmakers’ attempts to target years of federal agencies’ decisions through the Congressional Review Act, the GOP’s new favorite deregulatory toy.
Tuesday evening or Wednesday morning, the Senate is expected to vote on a resolution introduced by Sen. Jerry Moran (R-KS) that would undo the Consumer Financial Protection Bureau’s auto lending guidance meant to cut down on discrimination. The guidance targets “dealer markups,” where car dealers charge additional interest on top of what third-party lenders charge.
Research shows high dealer markups often disproportionately affect nonwhite people — in other words, car dealers charge black and Latino buyers higher interest markups than they do white buyers. The CFPB tried to curtail this by introducing the guidance, a sort of notice of how to apply and interpret a law, in 2013.
Congressional Republicans are using the Congressional Review Act (CRA) to scrap the guidance. Dating back to 1996, the law allows Congress to review federal regulations and, by joint resolution, overrule those regulations within 60 legislative days of their enactment. And once rules are scrapped via the CRA, agencies are prohibited from issuing “substantially similar” rules to be enacted — ever.
Prior to President Donald Trump’s election, the Congressional Review Act had been used successfully only once, under President George W. Bush in 2001 to roll back a Clinton-era rule to combat repetitive stress injuries at work. But since Trump has been in office, the GOP has used the CRA more than a dozen times to roll back Obama-era rules and regulations, including one to protect broadband consumer privacy, one to curb bribery and corruption in the energy industry, and one to stop coal companies from dumping waste into streams and waterways.
This latest effort to roll back the auto lending discrimination guidance is different. Republicans seem to have found a workaround to the CRA’s timeline that gives them just 60 days to review regulations and have potentially opened up years of agency decisions for review.
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