On Friday, the Chairman of the House Financial Services Committee wrote a letter to Director Cordray chastising the CFPB for its continued refusal to provide meaningful responses to Congressional requests for information about the Bureau’s supervision and enforcement activities related to indirect auto lending. In the letter, Chairman Hensarling cites five instances of Congressional requests for information related to the CFPB’s indirect auto activities over the past year that have been not been satisfied. He criticizes the Bureau’s “pattern of obfuscation” related to Congressional requests for information and contends that the CFPB has created “unnecessary uncertainty” within the auto lending market.
Most recently, after the Ally settlement (discussed here in greater detail), the letter explains that Chairman Hensarling requested a briefing from CFPB personnel concerning the details of the investigation and findings, but the staff was not willing to answer specific questions. Specifically, the CFPB would not provide insight into the following details of the Ally investigation:
• What were the “potential explanatory variables” offered by Ally?
• How did Ally “fail to provide adequate evidence that additional variables appropriately reflected legitimate business need”?
• What was the regression analysis model used by the CFPB in its investigation of Ally to estimate any disparities in dealer markup on the basis of race or national origin?
The letter states that by refusing to provide the information requested by Members of Congress over the last year, the CFPB has “deliberately deprived indirect auto lenders of any meaningful way to tailor their company’s lending practices and compliance systems so as to mitigate or eliminate the fair lending risk the Bureau asserts to be present.” The letter further notes that the CFPB’s “continued refusal to provide any details related to its disparate impact regression analyses and associated methodologies stands in stark contrast to [its] explicit promise to at least 48 Members of Congress to be open and transparent in the Bureau’s review of indirect auto lending.”
The letter concludes by requesting that the CFPB provide responses to five information requests related to its indirect auto lending activities, including certain information previously requested. The letter notes that “if the Bureau persists in its refusal to provide this information by the March 13 deadline, the Committee will have no choice but to consider invoking its compulsory process.”