The National Automobile Dealers Association has political muscle, and it wasn’t afraid to use it to get the highly sought-after auto dealer exemption from Consumer Financial Protection Bureau oversight. Automotive News interviewed NADA spokesman Bailey Woods, who told the industry publication that the House and Senate committees came to the proper conclusion for consumers, as added regulation would have made dealer financing a lot more difficult to organize and hence more costly. Early returns seem to indicate that auto dealers should be dancing in the aisles of Congress.
Article source: Congressional committee agrees on auto dealer exemption by Car Deal Expert
A victory for auto dealer exemption
The Congressional committee’s decision on the auto dealer exemption puts car loans in a different sphere than credit cards, mortgages and other forms of consumer credit. Arranging auto loan financing in-house will be unhindered for those dealerships with the capability, but the CFPB will nevertheless keep watch on banks and credit unions that work with auto dealers. The Federal Trade Commission will continue to watch the financial moves of auto dealers, but those in Congress who aren’t satisfied with this (it can take eight years for the FTC can take real action) will continue to hold out for something better. This is due to additional reviews the FTC must perform that aren’t required of federal agencies.
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. The efforts of NADA on the lobbying front changed the game, particularly when one considers where the finance bill started . All that the organization got for their trouble was a concession that the FTC could speed up their standard-writing process for auto dealers. Practices of dealer finance that may overcharge could be allowed to go on. Auto dealers claim this is merely than making ends meet in a tough economy.
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