House Action on Disparate Impact Not Affecting CFPB; Remains Dealer Concern

Crystal Lake, IL – June 5, 2015 – Contrary to news reports, the U.S. House of Representatives’ vote to eliminate the Department of Justice’s use of disparate impact does not negate the Consumer Financial Protection Bureau’s (CFPB) use of the legal theory in auto finance cases even if the bill passes the Senate and is not vetoed by the President, said Automotive Compliance Consultants.

Unfortunately, an article appearing June 4 stated the House of Representatives passed an amendment to H.R. 2578, the Fiscal Year 2016 Commerce, Justice, and Science Appropriations Act, that would bar the Department of Justice from using funds for litigation in which the regulator seeks to apply the disparate impact theory.

The article went on to discuss the significance of the amendment to the use of disparate impact by the CFPB to support actions in automobile finance.

“The amendment to H.R. 2578 will have no effect on the CFPB’s use of the legal theory in auto finance,” said David R. Missimer, general counsel for Automotive Compliance Consultants. “The reason for this is the amendment is limited, and only bars the use of appropriated funds by the Department of Justice to bring Fair Housing Act enforcement actions that rely on an allegation of liability under the HUD Disparate Impact Rule.”

The amendment voted on states, “None of the funds made available in this Act may be used by the Department of Justice to enforce the Fair Housing Act in a manner that relies upon an allegation of liability under section 100.500 of title 24, Code of Federal Regulations (Rule prohibiting discriminatory effect).”

“The Act, if passed, will not preclude the Department of Justice from continuing to use disparate impact in Equal Credit Opportunity Act cases,” Missimer noted. “Thus, disparate impact very much remains an issue for dealers and finance companies.”

Automotive Compliance Consultants specializes in dealership and auto finance compliance, providing in-dealership consultations and analysis, compliance audits and training, and offers solutions for all compliance needs. The Automotive Compliance Consultants staff has extensive experience in the retail automotive industry and focuses exclusively on dealership compliance issues. For information, visit

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