In a statement issued Thursday, Treasury Department spokesman Matthew Anderson said the newly created U.S. Bureau of Consumer Financial Protection (BCFP) will seek to simplify consumer auto loan forms in the coming months. The statement was issued to clarify a statement made by Deputy Treasury Secretary Neal Wolin. Last week, Wolin spoke about the plan to streamline the forms but failed to say that the task would be carried out by the new agency.
The new consumer protection agency was part of an amendment to the Restoring American Financial Stability Act of 2010 which was signed into law in July by President Barack Obama.
In his statement, Anderson identified the new U.S. BCFP as the entity that will undertake the task of simplifying the forms but offered no specific details about what that will entail. “Specific actions and timing,” he said, “will be determined going forward.”
In his remarks last week, Deputy Treasury Secretary Wolin also said that the move to simplify auto loans will be part of a much broader initiative to make home mortgage and credit card disclosures simpler for consumers.
The fact that the new consumer protection agency does not even have a director led some to wonder if the plan was coming directly from the administration. President Obama has not yet chosen a nominee to head up the agency. Once announced, the nominee must be confirmed by the Senate.
Anderson said that under the law, Treasury Secretary Timothy Geithner has responsibility for the policies and operations of the agency until a director wins Senate confirmation.
The new agency is not expected to be fully functional for at least another year.
Mark Pregmon, chairman of the auto finance committee for the Consumer Bankers Association, blames over-reaching government regulations for complicating auto loan forms in the first place. He said federal and state requirements in California have resulted in disclosure forms of 20 pages or more. Besides, he said, “people already realize what they’re signing up for.”
Although banks are subject to oversight by the new Bureau of Consumer Financial Protection, auto dealers are exempt. The National Automobile Dealers Association lobbied hard for the exemption, which was adopted despite strong opposition by the White House and some Congressional Democrats.
NADA spokesman Bailey Wood said the association “will work aggressively to ensure that any regulatory changes implementing the financial reform bill, including those which seek to ‘simplify’ loan disclosure requirements, do not limit a customer’s ability to finance a vehicle at affordable rates.”
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