The Republican-controlled Congress is poised to use a controversial and – prior to the Trump administration – rarely used legislative tool to dismantle consumer protections designed to keep auto-lenders from discriminating against customers.
The repealed regulations have run the gamut – including restrictions on coal-mining companies dumping waste into nearby waterways and rules preventing mentally impaired people from purchasing a firearm. Those regulations were originally to go into effect in the last days of the Obama administration, but were repealed before the agencies could take action.
In a scathing report released this week, the liberal think tank Center for Progressive Reform (CPR) is calling for a repeal of the Congressional Review Act, slamming it as a legislative gimmick that has allowed the Trump administration to “tear down” Obama-era regulations they don’t believe in with little to no regard to the consequences.
“I’m very reluctant to throw the phrase money and politics around, but in this case it’s hard to deny,” said James Goodwin, a CPR analyst, who co-authored the report. “It’s scary how recklessly they’ve deployed these things with very little care.”
Critics of the practice say that if one party controls both Congress and the presidency, the party can use the Congressional Review Act to cut down regulations at will. In addition, once the Congressional Review Act is invoked, future administrations may be barred from creating similar legislation on the same subject.
“It’s a very expedited process,” said Adam Levitin, a professor at Georgetown Law. “The nature of that summary process is that it tilts very strongly to parties that want to exercise CRA power, and that’s going to be regulated industries.”
Despite their rapid-repeal efforts, Republicans are not the only ones using the CRA to dismantle regulations. Democrats have used -- and plan to use -- the CRA again in attempts to rescind Trump Administration policies.
“Members from any and all parties should be taking accountability for the rules that are issued by these agencies,” Gaziano told ABC News. “What’s surprising to me is that the Obama Administration didn’t seek to have any of the Bush regulations overturned when Democrats controlled both the House and Senate for two years.”
Guidance documents, unlike regulations, are not subject by definition to Congressional Review Act rules and not usually submitted to Congress or the GAO for approval. Republican lawmakers, however, when taking up the repeal of the CFPB’s 2013 discriminatory auto lending rule, argued that the guidance letter had never been formally submitted, thus the “60 working days” clock never started.
The CPR says this argument makes potentially hundreds of guidance documents stretching back decades vulnerable to repeal without a full debate.
In issuing the 2013 guidance on auto lending, the CFPB intended to address concerns that poor and minority car buyers were victims of unfair markups by dealers, resulting in inflated car loans they couldn’t afford.
But Toomey largely targeted the CFPB’s process, saying it “chose not to follow the law” by issuing the rule as guidance rather than regulation. He called the guidance “a convenient way to avoid scrutiny” and review by the public and other agencies.
“I understand people might like the CFPB’s rule, which I don’t, but to suggest that somehow because they issued it through a guidance, rather than through the appropriate rule-making process that we somehow shouldn’t be using the Congressional Review Act is completely mistaken,” Toomey said.
The repeal passed the Senate and is scheduled for a vote in the House on May 7, much to the dismay of consumer advocates.
“The Senate just gave a green light to misleading consumers into paying hundreds or thousands of dollars more for their vehicles than they should have to pay based on their lender’s own estimate of a fair, risk-based price for the financing,” said Christopher Peterson, a senior fellow at the Consumer Federation of America.
If the Democrats retake Congress during midterms, the future of the Congressional Review Act may be uncertain. At least two Democrats, Sens. Cory Booker of New Jersey and Tom Udall of New Mexico introduced legislation last year designed to scrap the practice entirely. A spokesperson for Sen. Booker told ABC News the use of the Congressional Review Act comes at the expense of consumers and working families.
“Abuse of the CRA has allowed Congressional Republicans to fast track the repeal of a host of protections that benefit everyday Americans with little notice or public debate,” the spokesperson said.