A report released by the House Financial Services Committee alleged that CFPB Director Richard Cordray failed to heed CFPB attorneys’ advice when issuing a 2015 rule authorizing the agency to regulate the auto market.
According to the report, when considering the rule Cordray didn’t heed attorneys who advised him to publish a list of institutions the CFPB believed would be subject to the regulation and to re-open the public comment period after it had closed.
Despite the attorneys’ recommendations – and warnings of possible legal implications – Cordray approved the final rule without disclosure or public comment on the data underlying the rulemaking process, according to the Financial Services Committee.
The committee’s report also alleged that under recent Supreme Court precedent, the CFPB’s use of “disparate impact” in enforcement actions against auto financers wouldn’t survive a judicial review.
“Fuzzy logic and false comparisons are unfortunately prevalent in the CFPB’s auto-lending actions,” the report said. “In every aspect of the CFPB’s auto-lending actions, the CFPB’s lack of rigor leads to unsupported and unreliable conclusions.”
Once again we see the CFPB is a dangerously out-of-control, unconstitutional and unaccountable bureaucracy,” said committee Chairman Jeb Hensarling (R-Texas). “It is a case study in the overreach and pathologies of the regulatory state run amok. The Bureau routinely abuses and exceeds its authority, robs consumers of their economic freedoms, increases consumer costs and often attempts to hide information from the public.”
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House Republicans say that the director of the Consumer Financial Protection Bureau may have violated federal law that governs rulemaking procedures.