House Republicans released a report Tuesday accusing the Consumer Financial Protection Bureau of using "junk science" to show that auto dealers are discriminating against blacks in their lending practices.
The 54-page report, entitled "Unsafe at Any Bureaucracy: CFPB Junk Science and Indirect Auto Lending," condemns the Bureau's use of a disparate impact equation to find that auto lenders are charging higher interest rates to minority loan applicants, even though the agency in the end made educated guesses about the race of loan applicants.
The House Financial Services report called the CFPB's subsequent enforcement actions against auto dealers "misguided and deceptive."
"The CFPB is a dangerously out-of-control agency," said Chairman Jeb Hensarling, R-Texas. "It is irresponsibly branding companies with the stigma of racial discrimination based on nothing more than junk science that even CFPB senior officials acknowledge is gravely flawed. Why? To cudgel those companies into enormous monetary settlements without ever having to go to court. If it sounds like a shake down, that's because it is."
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