Richard Cordray talks privacy, auto lending

CFPB Director Richard Cordray told the Senate Banking Committee Tuesday that the bureau’s approach to streamlined privacy notices would be substantially similar to the approach taken in Senate legislation that would eliminate the yearly mailing requirement in years that policies don’t change.

NAFCU is working in support of the privacy notice legislation, which takes similar forms in the House and Senate as H.R. 749 and S. 635. The House has passed its bill, and the Senate is expected to act soon on its version. Committee Ranking Member Mike Crapo, R-Idaho, spoke in favor of the “Privacy Notice Modernization Act.” He also praised the bureau’s decision to curb the practice of examiners doing a “ride along” and joining in an exam conducted by prudential regulators.

Cordray was testifying Tuesday on the bureau’s most recent semiannual report. In other hearing discussion:

  • Committee Chairman Tim Johnson, D-S.D., said the CFPB has “made good progress in fulfilling its mission” but said he would be interested to see how the bureau’s qualified mortgage rules (for which NAFCU is still urging a 12-month delay) will affect rural lending.
  • Cordray said the bureau still has strong concerns about how auto dealerships arrange loans and said it is trying to strike a balance, but it stands by its methods so far to detect patterns of discrimination regarding auto loans.

Regarding auto lending, the bureau issued a guidance bulletin this March that said lenders (including credit unions) may be liable under the fair lending provisions of the Equal Credit Opportunity Act for disparities in the indirect lender’s portfolio. NAFCU and many in Congress have raised concern that the guidance appears to put lenders between auto dealers and the CFPB, which has no direct supervisory authority over auto dealers under the Dodd-Frank Act.

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