An auto dealer exemption appears to be the result of National Automobile Dealers Association lobbying against the prospect of lending oversight by the newly formed Consumer Financial Protection Bureau. Bailey Woods, spokesman for NADA, told Automotive News that Congress is headed within the right direction if their aim is to save dealers administrative headaches and save consumers money. Considering what NADA lobbyists have won so far, auto dealers appear to have good reason to celebrate.
Auto dealer exemption: So long, CFPB
The CFPB can have jurisdiction over mortgages, credit cards and other consumer credit like pay day loans, but the auto dealer exemption will leave dealer financing out of the new government agency’s hands. Car dealer financiers who help dealers provide auto loans with bad credit in-house will remain under CFPB supervision; the dealers who help consumers arrange financing will not. The Federal Trade Commission nevertheless supervises auto dealers, but those in Congress who sought to bring dealer financing under CFPB scrutiny are dissatisfied with that system, as it takes the FTC as long as eight years to enact significant change. Greater legislative constraints on the FTC – rules to which the federal government itself does not have to abide – are the reason for their relative inefficiency.
Rep. Barney Frank bemoaned the lack of votes
Barney Frank and other House Democrats wanted auto dealers to be put on a leash, as did President Obama, the Pentagon, military families, consumer rights and civil rights grounds, indicates Automotive News. Yet NADA’s lobbying turned things around for auto dealers, particularly considering where the finance bill began. While the larger goal fell out of reach, Frank and crew did obtain the concession the FTC would be allowed a shorter turnaround time in their investigation efforts. Practices of dealer finance that may overcharge will be allowed to go on. Auto dealers claim this is merely than making ends meet in a tough economy.
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