President Donald Trump officially signed a congressional resolution on May 21 repealing the Consumer Financial Protection Bureau's guidance warning of discrimination in indirect auto lending.
The repeal measure also bars the CFPB from issuing any substantially similar rules in the future.
In April, the U.S. Senate used a legislative tool known as the Congressional Review Act, or CRA, to nullify the consumer watchdog's 2013 guidance aligning auto lending practices with compliance under the Equal Credit Opportunity Act, or the ECOA. Although the CRA technically only allows Congress to reverse agency rulemaking, the Government Accountability Office in 2017 ruled that the CFPB's indirect auto guidance qualifies as rulemaking and is therefore subject to congressional review.
The U.S. House of Representatives approved an identical resolution in May.
Opponents have largely argued that the guidance imposed more regulatory scrutiny on lenders offering discounts on auto loans. But proponents of the guidance counter that the CFPB sought to ensure fair pricing regardless of race, religion or sex, among other factors.
In a statement, Acting CFPB Director Mick Mulvaney said the agency will still "vigorously" enforce fair lending laws but criticized the indirect auto guidance as being flawed.
"In this case, the initiative that the previous leadership at the Bureau pursued seemed like a solution in search of a problem," Mulvaney said.
The CFPB said it is in the process of reviewing other past guidance for possible submission to Congress for the purposes of the CRA.
