Mick Mulvaney, since November the acting head of the Consumer Financial Protection Bureau, could have killed an Obama-era directive cracking down on discriminatory lending on auto sales with a snap of his fingers. In 2013, the new bureau put auto dealers and the finance companies they work with on notice: We have found evidence that auto loans are often marked up for Latino and African-American customers, and will be monitoring your compliance with fair lending laws. Study after study had shown that people of color typically pay higher fees and higher interest rates on car loans than whites with similar credit profiles. The CFPB didn’t wait to create a formal rule, instead issuing a “guidance” bulletin. Mulvaney could have undone that guidance simply by writing his own. But that wasn’t enough for Mulvaney, who, as a member of Congress, had sponsored a bill to eliminate the bureau entirely. Instead, on Wednesday, the Senate took action, voting 51-47 to overturn the guidance.

When Congress strikes down an agency action, the consequences are far more permanent. “Once Congress passes a resolution disapproving of something like this, the agency is prohibited from ever doing anything substantially similar,” said Debbie Goldstein, who oversees federal policy at the Center for Responsible Lending. If passed by the House and signed by President Donald Trump, Goldstein said, “This would tie the hands of future CFPBs.” The Senate vote was also the test launch for a new, potentially lethal weapon that could be used to blast into oblivion a wide range of regulations that industries do not like. “Agencies probably issue a thousand binding regulations in a year. Maybe a couple of thousand,” said James Goodwin, a senior policy analyst at the Center for Progressive Reform, a nonprofit research and advocacy group. “We’re talking about an unimaginably large universe of stuff suddenly in play.” Sen. Pat Toomey, R-Pa., the ringmaster behind the auto lending discrimination resolution, said as much shortly before Wednesday’s vote. “It’s a hugely important precedent,” Toomey told Politico. “It’s potentially a big, big opening.” Toomey, a former commodities trader, headed the anti-tax, anti-regulation Club for Growth before winning a Senate seat in 2010. Wednesday’s vote was grounded in the Congressional Review Act, a vestige of Newt Gingrich’s four years as House speaker. Passed in 1996, the CRA gives one more chance to Congressional foes of regulation and the industries who lobby them. Legislation is passed, a president signs a bill into law, and a regulatory body goes through a rule-writing process that can last two or three years, if not longer. But since the CRA, any new rule must be submitted to Congress — often a new Congress and sometimes a new president, given how long rule-making takes — which has 60 legislative days to decide whether to crush it. If Congress passes a resolution, and the president signs it, the rule is not only struck down; that area becomes out of bounds for regulators without another act of Congress. The CRA was used successfully just once in its first 21 years — to nullify a Clinton-era ergonomics rule to combat repetitive stress injuries in the workplace. Since Trump took office, however, it’s been used more than a dozen times to eliminate rules that were finalized in the waning months of the Obama administration. That includes a rule to stop coal companies from dumping waste into waterways, another that required employers to log all workplace injuries, and a third that would have given consumers the right to sue even if they had signed an agreement containing an arbitration clause. In each case, the issuing agency lost the ability to propose a similar rule any time in the future. “The CRA is a much faster process that requires only a simple majority in the Senate, rather than 60 votes,” Goldstein explained. Wednesday’s vote marked the first time that the CRA was applied to a guidance rather than a formal rule. “Almost anything an agency puts down in writing is technically ‘guidance,’” said Goodwin. “That would include frequently asked questions on their website. It can include bulletins, interpretative statements, anything agencies do to provide a little more detail about regulations, usually to give industry more clarity about what their responsibilities are.” The CRA doesn’t define what it means by a rule, explained Goodwin, but instead pointed to an obscure administrative law passed during the 1940s. “The term rule is defined incredibly broadly,” he said. It’s no great surprise that Republicans chose the CFPB’s auto lending guidance as its test case. There’s no love for the CFPB among Republicans, and money pouring in from the industry may also have been a factor. The co-sponsors of Wednesday’s Senate resolution received a combined $5.2 million in campaign contributions from the auto industry, according to an analysis of campaign finance disclosures by Allied Progress, a left-leaning research organization and consumer watchdog.

U.S. Sen. Pat Toomey, R-Pa., second from left, speaks as President Donald Trump listens during a meeting with congressional members in the Cabinet Room of the White House on Feb. 13, 2018 in Washington, D.C. Photo: Alex Wong/Getty Images