Providing for Congressional Disapproval of A Rule Submitted By Bureau of Consumer Financial Protection

Floor Speech

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Mr. CRAPO. Mr. President, in a few minutes, at noon, the Senate will begin the process of voting--two votes. The first of those votes will be a vote on a resolution brought to the Senate by Senator Moran and Senator Toomey to reject a rule proposed by the Consumer Financial Protection Bureau's 2013 action in which it sought to assert jurisdiction over auto finance guidance. I use the word ``rule'' guardedly, though, because, as you will see from my remarks, this was an end run by the CFPB in two ways. First, the CFPB doesn't have jurisdiction over auto finance. Second, the CFPB did not use the Administrative Procedure Act to adopt a rule; it sought to implement a rule through a process of issuing a guidance to avoid the scrutiny and the legal challenges to its effort to assert this jurisdiction.

It is important that Congress disapprove this guidance because it was an attempt by the CFPB to make substantive policy changes through guidance rather than through the rulemaking process governed by the Administrative Procedure Act. As I said before, it is also an attempt to regulate auto dealers, who were explicitly exempted from CFPB supervision and regulation under the Dodd-Frank act. Finally, it is also a rule that has caused great difficulty and problems in the marketplace, hurting auto dealers and consumers alike.

The CFPB itself, when undertaking this action, admitted what it was doing. The CFPB rejected developing a rule using its statutory authority because the actions it was seeking to regulate are ostensibly those of dealers over whom it has no regulatory authority. It is interesting that even in the CFPB's own documentation of what it was doing, it indicated that it didn't have the authority to do it. So the CFPB decided to develop a guidance, rather than a rule, as a backdoor way to regulate auto dealers.

The CFPB's indirect auto bulletin represents a departure from typical Federal agency practice, as reflected in the GAO's conclusion that its rule is subject to CRA requirements. In other words, in a ruling, the GAO said: Yes, this actually is a rule even though the Administrative Procedure Act wasn't followed. That decision by the GAO gives this Congress the authority to reject the CFPB's actions.

Some of my colleagues on the other side say that disapproving guidance is somehow a loophole we are using because we should only have authority to disapprove a specific rule. The GAO's ruling on the CFPB's guidance clearly puts this within the jurisdiction of this Senate.

I would point my colleagues to a statement from, among others, Senator Reid in the Congressional Record from 1996 when the Congressional Review Act was passed, explaining what the authors' intent was when passing this legislation. He said: ``[T]he authors are concerned that some agencies have attempted to circumvent notice-and- comment requirements by trying to give legal effect to general statements of policy, `guidelines,' and agency policy and procedure manuals. The authors admonish the agencies that the APA's broad definition of `rule' was adopted by the authors of this legislation to discourage circumvention of the requirements'' of it.

As a result of these significant concerns, this resolution has attracted substantial support, including from 14 different organizations involved with helping consumers buy a vehicle, and an endorsement via a Statement of Administration Policy from the White House. The following organizations submitted letters: the Chamber of Commerce, the Credit Union National Association, the Independent Community Bankers of America, the American Bankers Association, the American Financial Services Association, the National Automobile Dealers Association, the Alliance of Automobile Manufacturers, the National RV Dealers Association, the National Independent Automobile Dealers Association, the Recreation Vehicle Industry Association, the American International Automobile Dealers Association, the National Auto Auction Association, the Motorcycle Industry Council, and the National Federation of Independent Business.

Finally, I would like to respond to the assertion that disapproving this guidance somehow allows auto dealers to discriminate. That is the issue that is at stake here. The reason that Congress did not give the CFPB jurisdiction over auto dealers is that the auto dealers are already subject to the Equal Credit Opportunity Act. If we reject this resolution, the auto dealers will continue to be subject to the Equal Credit Opportunity Act, which will continue to apply to all creditors, which means auto dealers who extend credit will be prohibited from discriminating against customers on the basis of race, sex, age, national origin, marital status, or because one receives public assistance.

In other words, we are not changing the law. We are not taking away any protections in the law. We are stopping a rogue agency from continuing to be able to enforce a rule which it sought to create by avoiding the Administrative Procedure Act.

I urge my colleagues to vote to support this resolution.

Mr. President, I yield my time.

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