U.S. Senate Votes to Drop Rule on Auto-Lending Margins

The U.S. Senate has narrowly agreed to drop a rule by the federal Consumer Financial Protection Bureau that capped auto dealer margins on indirect retail loans.

The measure now goes to the House of Representatives for a vote. It addresses a 2013 CFPB directive intended to prevent dealers from charging minorities higher rates on car loans.

The National Automobile Dealers Assn. applauds the move. It describing the CFPB’s Obama era policy as “flawed” and complains it was issued with no public comment or consultation with other federal agencies. If the resolution becomes law, it will bar the bureau from reissuing the rule without congressional permission.

NADA contends that other regulations already address discrimination issues. The trade group also favors the adoption of a compliance program it developed with the American International Automobile Dealers Assn. and National Assn. of Minority Automobile Dealers.