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 paydayloans, but the auto dealer exemption will leave dealer financing out of the new government agency’s hands. Dealer-financed auto loans for bad credit may also continue without interruption, but the CFPB will exert their influence on the financial institutions that fund car dealer finance corps. 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 doesn’t have to abide – are the reason for their relative inefficiency.
Rep. Barney Frank wanted to bring dealers into line
Rep. Barney Frank and a spate of House Democrats had hoped to curtail auto dealer lending, as did the president, the Pentagon and others, reports Automotive News. Where the finance bill began and where it ended up after NADA’s lobbying was a tale of the power of campaign contributions. All the organization got for their trouble was a concession the FTC could speed up their standard-writing process for auto dealers. Yet in spite of this, some consumers may still be subject to those practices of dealer finance that are labeled less than reputable by some. It’s the nature of the beast, as many dealers see the matter.
A lot more details accessible at these websites:
http://www.autonews.com/apps/pbcs.dll/article?AID=/20100625/RETAIL07/100629912/1128
