Dealers get to wait a while to find out how the new Consumer Financial Protection Bureau will affect day-to-day F&I business.
That's because Republican senators last week made good on their earlier promise to block the confirmation of Richard Cordray to head the CFPB. Cordray is a former Ohio attorney general.
Led by Sen. Richard Shelby, R-Ala., ranking member of the Senate Banking Committee, Republicans want to place a supervisory board over Cordray. In their view, the CFPB isn't sufficiently "accountable." Senate Democrats, led by Banking Committee Chairman Tim Johnson of South Dakota, accuse the Republicans of "holding financial reform hostage."
According to the law establishing the new bureau, the CFPB can't regulate "non-bank entities" -- including many auto lenders -- until a permanent head is confirmed. Its ability to regulate banks is also limited.
Auto dealers are exempt from CFPB regulation, except for buy-here, pay-here dealers. However, any new rules that affect auto lenders -- such as reporting requirements or potential limits on what the CFPB could consider abusive lending practices -- are likely to affect dealerships, too.
The CFPB was supposed to go into business in July, but Cordray's nomination and confirmation process have held that up. Not to worry, until the situation clears, dealerships have plenty of existing regulations to meet.
You can reach Jim Henry at autonews@crain.com.
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