The Consumer Financial Protection Bureau’s rules for banks on mortgage lending have had a deleterious effect on lenders, but the problems extend far beyond the one-size-fits-all regulations.

Here’s one example, courtesy an op-ed at Forbes.

Consider auto loans: The CFPB claims that when banks offer car loans, they discriminate against minority and female borrowers by offering higher interest rates or less favorable loan terms. If true, it would make sense for the agency to step in and rectify such gross discrimination. However, a new study finds that the CFPB’s research is woefully inaccurate.

Federal law prohibits auto lenders from gathering key demographic data, like race and ethnicity, from borrowers. So when the CFPB set out to look for discrimination in lending, these bureaucrats had to come up with a system for essentially guessing which borrowers were members of minority groups.

It turns out the CFPB’s accuracy rate is no better than a high school student who guesses on every single SAT question.

A study commissioned by the American Financial Services Association found the CFPB’s method of estimating race and ethnicity based on an applicant’s zip code and name only correctly identified African-American borrowers an abysmal 24 percent of the time. To determine the CFPB’s accuracy rate, the study’s authors compared the agency’s results with mortgage applications, on which applicants self-report race and ethnicity.

And while the CFPB used this deeply flawed research as the basis for “general guidance” on best practices for auto lenders, it hasn’t actually issued any regulations spelling out how it is identifying discriminatory lending practices and what lenders need to do to avoid paying millions in fines. For example, the agency imposed a $98 million settlement on Ally Financial Inc. for alleged racial discrimination in lending though the company keeps no race or ethnicity records of its loan applicants. Ironically enough, at the time, the federal government owned a majority stake in Ally.