Car Loan Bias Rule Overturned

In a challenge to the authority of the Consumer Financial Protection Bureau, the United States House of Representatives voted to overturn an Obama-era rule aimed at preventing discrimination against consumers obtaining car loans. Based on a 234-175 vote mostly along party lines, the House struck down the rule that prevented auto lenders from having the ability to charge higher fees to buyers based on not only their credit score, but also national origin or race.

The rule, first implemented in 2013, was initially voted on in the U.S. Senate in April, where members determined they had the votes needed to repeal the rule. Once this vote was taken, the Government Accountability Office decided it was legal to reverse the rule, based on procedures contained in the Congressional Review Act.

Strongly opposed from the beginning by the National Automobile Dealers Association, the rule was viewed by NADA as an obstacle that severely limited the flexibility dealers would normally have to provide discounted auto loans to their customers. According to Peter Welch, who serves as NADA President, the rollback of the rule will now let local dealerships across the nation exercise their judgment in attempting to provide customers the best options for financing a vehicle.

However, as it usually is with any type of political decision, there is an opposite reaction to the ruling. According to attorneys representing the Center for Responsible Lending, there is now concern that by overturning the law, other federal agencies may be at risk of having their rules also overturned, especially those that focus on protecting consumers from predatory lenders.

Based on the actions of the House and Senate, many questions have now arisen as to how many more agencies similar to the Consumer Financial Protection Bureau will have their rules dismissed by the federal government. As the resolution voted on by Congress now heads to the desk of President Donald Trump for his signature, the debate continues as to how effective the Consumer Financial Protection Bureau will be in the months and years ahead. While some applaud the additional freedoms now granted to individual businesses, others view the ruling as the first step in what could be a long line of rules and regulations being overturned. To learn more about the ruling and additional details surrounding the fate of the Consumer Financial Protection Bureau, please visit the link to this article at

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