Photo credit: DAVID PHILLIPS
WASHINGTON — The U.S. Senate voted 50-47 on Tuesday in favor of debating whether to undo a consumer watchdog’s March 2013 guidance restricting how car dealers extend auto loans to consumers.
The vote to weigh the Consumer Financial Protection Bureau rule, which critics say overreaches its authority, will be debated on the Senate floor on Tuesday before a second vote on whether to overturn it.
In March 2013, the CFPB sought to limit loan markups and compensation for dealers on auto loans — specifically on the basis of race, national origin, or credit score.
U.S. Senate Banking Committee Republican Pat Toomey said earlier this month the panel planned to repeal the CFPB’s indirect auto lending and leveraged lending rules in the coming weeks.
The agency conceived to stamp out predatory lending must pull back from “unfair” oversight of the finance sector, Toomey said.
In October, the Government Accountability Office endorsed Toomey’s view that Congress has the power to revoke rules for auto loans and leverage lending, a type of risky credit that can be backed by several banks.