U.S. senate panel plans to repeal auto lending rules: Toomey

WASHINGTON (Reuters) - U.S. Senate Banking Committee Republican Pat Toomey said on Tuesday the panel plans to repeal the Consumer Financial Protection Bureau’s indirect auto lending and leveraged lending rules in the coming weeks.

FILE PHOTO: Senator Pat Toomey (R-PA) walks from Senate Republican weekly policy luncheon on Capitol Hill in Washington, U.S., March 6, 2018. REUTERS/Joshua Roberts

The agency conceived to stamp out predatory lending must pull back from “unfair” oversight of the finance sector, he added.

“We need to kill this thing all together,” the Pennsylvania lawmaker said of the CFPB, faulting the agency and its former director for layering on too much bureaucracy.

“Cordray is gone. What an enormous improvement,” Toomey said of Richard Cordray, who led the CFPB under President Barack Obama and resigned in November.

Mick Mulvaney, President Donald Trump’s budget director, is leading the CFPB until a permanent director is chosen.

Drivers who use indirect auto loans are financed through a dealership. Those dealers are backed by banks.

In March 2013, the CFPB limited loan markups and compensation for dealers on auto loans - specifically on the basis of race, national origin, or credit score.

Toomey said the senate banking committee would scrap that rule.

In October, the Government Accountability Office endorsed Toomey’s view that Congress has the power to revoke rules for auto loans and leverage lending, a type of risky credit that can be backed by several banks.

Toomey was addressing community bankers in Washington to lobby lawmakers to vote in favor a sweeping banking form bill, the Economic Growth, Regulatory Relief, and Consumer Protection Act.

Toomey is in line to lead the Senate Banking Committee after the November elections if the current chief, Senator Mike Crapo, steps aside and Republicans maintain control of Congress.

Reporting by Katanga Johnson; Editing by Patrick Rucker and Bernadette Baum