Tag Archives: Senator Elizabeth Warren

Senator Elizabeth Warren: Close the Car Dealer Loophole

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Should auto dealers, who write tens of billions of dollars in auto lending contracts each year, evade regulation by the nation’s leading agency for policing consumer financing?

US Senator Elizabeth Warren recently made it clear that she thinks the answer is NO.  While questioning Richard Cordray, Director of the Consumer Financial Protection Bureau, who was testifying before the US Senate Banking Committee, Sen. Warren offered this opinion:

“As you know, the CFPB has authority over nearly every kind of consumer loan, but the big exception is car loans. The CFPB has done great work in this area [focusing on lenders, but not dealers]…But it makes no sense to me that there should be any exception here for consumers who are being tricked out of billions of dollars every year on car loans.”

Sen. Warren conceived of the idea of an independent consumer financial watchdog agency, and worked hard to make it a reality.  During the debate over whether to include auto dealers, they misled members of Congress and the public, repeatedly claiming they are “Main Street, not Wall Street.”

However, the reality is quite different. Hundreds of dealerships are owned by large, publicly traded dealership groups that are publicly traded and sold on Wall Street.  For example, AutoNation, based in Florida, owns 221 dealerships across the U.S. and took in over $15.6 billion last year.  AutoNation’s largest investor is Bill Gates.

Does anyone seriously believe that fits the description of “Main Street”?

Read more: Warren: Close CFPB’s dealer ‘loophole’

 

 

 

 

Good news for car buyers — Richard Cordray Confirmed!!

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At last, in a huge, sweet victory for struggling consumers, Richard Cordray has been confirmed as Director of the Consumer Financial Protection Bureau. The CFPB, first envisioned by now-Senator Elizabeth Warren, was created to be a watchdog for consumers in the financial marketplace.

Democratic legislators in Congress created the agency when they voted for the Dodd-Frank Wall Street Reform Act, in the wake of the largest financial meltdown since the great Depression.

Since then, Republicans in Congress have tried repeatedly to weaken the agency and put it under their thumbs. That way, they could tie it in knots and keep it from doing its job.  Republican senators had blocked Cordray’s nomination for years, and relented only when Democratic Senators forced their hand, by threatening to change the filibuster rules that had allowed the Republican minority, at the behest of powerful, unscrupulous special interests, to block a vote on Cordray’s nomination and other nominations to vitally important posts that directly affect the lives of  ordinary Americans.

Cordray’s confirmation is a huge victory for President Obama, US Senator Elizabeth Warren,  the consumer and labor movements and allied groups, and other pro-consumer forces who joined together to form Americans for Financial Reform. And for all the individual consumers who petitioned Congress and spoke up for letting the agency do its job.

Republican members of Congress, and some Democratic members, led by US Rep. Gary Peters of Michigan, granted auto dealers a special exemption from the Consumer Financial Protection Bureau’s authority, under the false claims that they don’t engage in lending themselves (they do), and that they’re not traded on Wall Street (many of them are).

However, the CFPB does have authority to police auto lending. It may also act to curb lenders from taking away consumers’ Constitutional rights when they purchase a car, trapping them with “arbitration” clauses that keep them captive to a secret, private “arbitration” system that the lenders control.

This is welcome news indeed for the car-buying public. The agency has already issued a warning to auto lenders not to keep engaging in discriminatory lending practices that result in minority car buyers paying more for financing — not based on their creditworthiness, but on race.

The agency may also issue rules to curb auto dealer markups on interest rates, that cost car buyers over $25.8 billion annually in excessive interest charges pocketed by dealers and lenders — money that could be spent on technology that saves lives and helps clean the air and slow climate change.

If you have a complaint about auto lending, here’s where to complain at the CFPB:

Consumer Financial Protection Bureau–file a complaint here