Richard Cordray won the Ohio Democratic gubernatorial primary on Tuesday. Earlier in the day, lawmakers in Washington undermined part of his legacy.
The House of Representatives voted 234-175 to approve of a Senate-passed bill annulling guidance issued by Cordray, when he was Director of the Consumer Financial Protection Bureau.
Eleven Democrats joined every Republican but two in approving the measure. The bill now only needs President Trump’s signature before becoming law.
The memo, first released by the CFPB in 2013, was crafted to clampdown on discrimination in indirect auto-lending.
Republicans decried the guidance, claiming Cordray overstepped his authority as CFPB Director by not following standard rule-making procedures—allegations given credence by a December legal analysis from the Government Accountability Office.
Supporters of the memo, however, say the guidelines adhere to norms, and that critics are ignoring reams of empirical data showing lending discrimination via disparate impact assessment—a statistical analysis tool deemed acceptable by the Supreme Court, as recently as 2015.
“[T]hey don’t understand what they’re doing, as the guidance merely restated existing fair lending law, which remains firmly in place,” Cordray tweeted last month, after the Senate bill passed.
Many Democrats have also blasted the repeal because it was proposed under the Congressional Review Act. The legislation was initially crafted to nullify regulations passed within 60 legislative days, not years-old guidance.
“Republicans have used the Congressional Review Act to attack access to healthcare, and worker and environmental protections before, so it’s no stretch to think they would do it again,” said Sen. Sherrod Brown (D-Ohio) in April. “Only now, there would be no limit to the types of agency actions they could target, and these attacks could continue to come to the Senate floor for months or years.”
Months after the 2013 guidance was released, the CFPB entered into an $80 million settlement with Ally Financial–one in which the bank admitted to allowing dealers to charge roughly 0.25 percent higher interest to people of color. The agency has also reached deals on ending discriminatory practices with Fifth Third Bank, Honda and Toyota.
In the wake of last decade’s housing market meltdown, the auto-lending industry has seen disproportionate growth in subprime lending–the aggressive marketing of expensive loans to people with poor credit. When the same sort of predatory products caused the mortgage industry to implode in 2008, victimized borrowers were disproportionately people of color.
