NADA (the National Automobile Dealers Association) is a mighty force politically, and it recently had the chance to fight for an auto dealer exemption from CFBA (Consumer Financial Protection Bureau) oversight. Automotive News interviewed NADA spokesman Bailey Woods, who told the industry publication 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 expensive. Early returns seem to indicate that auto dealers should be dancing within the aisles of Congress.
Resource for this article: Congressional committee agrees on auto dealer exemption by Car Deal Expert
A victory for auto dealer exemption
When mortgages, credit cards and other varieties of short term consumer lending will remain in the CFPB playbook, the auto dealer exemption will keep dealer financing upon like a veritable Wild West. Dealer-financed auto loan finance 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 still 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. This is due to additional reviews the FTC must perform that are not required of federal agencies.
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. The efforts of NADA on the lobbying front changed the game, particularly when one considers where the finance bill started . When 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 can be allowed to go on. Auto dealers claim this is merely than making ends meet in a tough economy.
Citations:
http://www.autonews.com/apps/pbcs.dll/article?AID=/20100625/RETAIL07/100629912/1128
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