Last week, NADA announced the House Financial Services Committee voted to repeal the CFPB’s guidance for auto lending of 2013. The bill, H.R. 4811, also seeks to require a higher level of transparency in the CFPB’s guidance process. It would require the CFPB to provide a period of public comment and greater transparency in the guidance process (see full details here).
Time to Pop the Champagne?!
Does this mean to renew your NADA membership right now? Not quite yet. The news reflects only one of the steps required for H.R. 4811 to make it through congress. It also does not absolve auto dealers of their growing obligation to meet the CFPB’s recommendations for a Compliance Management System (CMS).
What is Your Responsibility?
As long as financial institutions remain responsible for the actions of their third parties, auto dealers will still have to be responsible for their actions, meet the standards of relevant law in their lending practices, and address the policies their banks have in place to prevent disparate impact. NADA is a terrific advocate, and these changes could likely slow the CFPB’s efforts on flat fee lending, but they will not absolve dealers of their need to have a solid CMS in place.
Free CFPB Webinar – What You Need to Know
Complí is proud to bring you the first in a series of webinars that will provide you with practical guidance to navigate these new obligations: