ALEXANDRIA, Va. — Last week I attended the Vehicle Finance Executive Forum in Washington D.C., with American International Automobile Dealers Association president Cody Lusk.

The event, organized by the American Financial Services Association, was packed with dealers, members of the captive finance groups and industry representatives, including Damon Lester of the National Association of Minority Automobile Dealers of and National Automobile Dealers Association chairman Stephen Wade and president Phil Brady.

Still reeling from the recession and years of industry upheaval, we were all there for one reason: to gain a better understanding of the financial realities facing America’s dealerships. One of those realities is that overregulation by the federal government is threatening the future of our small businesses.

You may recall that in 2010 AIADA lobbied long and hard to gain an exemption for auto dealers from the Dodd-Frank Financial Reform Act that sought to classify us as banks. 

Thanks in part to your grassroots efforts, we were successful.

However, dealers who are directly involved in lending will still come under the purview of the Consumer Financial Protection Bureau. Like most dealers, I have a real problem with heavy handed government officials assuming dealers are looking to take advantage of our customers during the financing process.

Where is the Administration and the CFPB getting that idea?

Unfortunately, misinformation is everywhere. AFSA provided attendees with one article from the Center for Responsible Lending titled, “Under the Hood: Auto Loan Interest Rate Hikes Inflate Consumer Costs and Loan Losses.” Its authors make a number of invalid accusations including, “With the average rate markup at $714, dealership staff are effectively billing consumers from $952 to $1,587 per hour to finance the vehicle.”

Ha! If that were true, I would have retired to Tahiti a long time ago.

The CFPB is arming itself with wildly inflated numbers like the one above and a ridiculous survey by the National Consumer Law Center of lawyers on whether they believe auto dealers take advantage of some consumers (spoiler alert: they do).

It is led by government drones who have developed a preconceived anti-business way of looking at how businesses and consumers interact. My interpretation is that they do not care what happens to small businesses, and they are totally unaware of the differences between direct and indirect lending. They feel they have been given a mandate to ignore the facts, and based on individual interpretation, bring action against those industries and practices that serve the American public.

Auto dealers know that car buyers today have more protections than any other time in history. 

Ours is the most transparent of any industry with which the consumer interacts. What other consumer product can you look up online and know almost exactly what we retailers paid for it? 

Consumers can and do shop interest rates. And they benefit from 50 state consumer protection bureaus and the backing of the Federal Trade Commission. There are also 50 state attorneys general monitoring transactions. 

And yet, in a time of government spending gone out of control and the possibility of another financial crisis looming, this new bureau (which will hire up to 1,000 employees) has been established at a tremendous cost to the American public. It just frustrates me to no end.

Dealers must respond swiftly and forcefully to threat of overregulation. Get involved!  Read the articles I linked to and work with AIADA to let your congressmen and senators know that this type of government over-reaching cannot continue.

Jim Smail, AIADA chairman, wrote this column as the latest post on his blog Smail Mail after attending the Vehicle Finance Executive Forum in Washington, D.C. The event was organized by the American Financial Services Association and aimed to give dealers, members of the captive finance groups and industry representatives a better understanding of the financial realities facing America’s dealerships.