It seems Congress doesn’t care if auto dealerships charge people of color more to buy cars. Last night, the House voted to revoke a 2013 Consumer Financial Protection Bureau (CFPB) guidance that aimed to prevent companies from charging customers more interest on loans based on their race, religion or ethnicity.
The bill, Reforming CFPB Indirect Auto Financing Guidance Act, passed by a vote of 332 to 96, with five abstentions.
Several groups opposed it, including the Obama Administration, which said that besides allowing for discrimination, the bill “would require CFPB to undertake extensive study and consultation, as well as provide a notice and public comment period, before issuing any further auto loan guidance. The bill would create confusion about the existing protections in place to prevent discriminatory auto loan pricing, and effectively block CFPB from issuing related guidance in the near-term.”
CFPB found that dealers consistently apply larger markups to loans when the borrower is Black or Latino, versus similarly qualified White borrowers.
Supporters of the bill, like the National Automobile Dealers Association, argue that the CFPB’s guidance infringes on dealers’ ability to provide loan discounts and will “likely raise the cost of credit for car buyers.”
The bill will now go to the Senate for a vote.