On Wednesday, the U.S. Senate voted almost entirely along party lines to invalidate, under the Congressional Review Act, the Consumer Financial Protection Bureau’s (CFPB) (in)famous 2013 Bulletin on lending discrimination in the indirect auto market via discretionary mark-ups and dealer compensation policies. The 2013 Bulletin, construing the Equal Credit Opportunity Act and its implementing rule, Regulation B, had served as the basis for a number of substantial CFPB enforcement actions against indirect auto lenders, with large fines and loud protests from industry.
The U.S. House of Representatives has been poised to vote down the 2013 Bulletin for some time, and is very likely to follow the Senate’s lead and make the invalidation effective. If as expected the House does act, this would mark the second time in the past year that Congress has voted to strike down a rule issued by the CFPB. (Last December, the Government Accountability Office’s General Counsel issued a formal legal opinion concluding that the 2013 Bulletin was, in fact, a “rule” subject to the Congressional Review Act, paving the way for yesterday’s Senate vote.) The first instance, of course, was Congress’ decision to invalidate the CFPB’s rule regarding arbitration.
Despite the Senate’s action yesterday, efforts to weaken the CFPB by statute along the lines proposed by its Acting Director Mick Mulvaney and Republican congressmen continue to face challenges in Congress. While such proposals have passed and would likely easily pass again in the House of Representatives, no such measure was included in the recent package of reforms that passed the Senate with bipartisan support. Several of the Senate Democrats who voted for that package have indicated that they are not inclined to support measures that would weaken the CFPB structurally.