This story appeared in Bank Digest.
Republican members of the House Financial Services Committee have released an investigative report, based on internal Consumer Financial Protection Bureau documents, that claims to reveal several potential legal problems with the bureau's 2015 rule authorizing it to regulate the auto lending market. One is CFPB Director Richard Cordray's failure to heed bureau attorneys who advised him to publish a list of institutions the bureau believed would be subject to the proposed rule and to re-open the public comment period after it had closed.
According to the committee's press release, the report also demonstrates that under recent Supreme Court precedent, the CFPB's use of the "disparate impact" legal theory in enforcement actions against auto financers would not survive judicial scrutiny. This is the third investigative report released by committee Republicans over the last 14 months concerning the CFPB's efforts to regulate auto lenders.