NADA: Dealer-Assisted Financing Being Debated Again by Congress
WASHINGTON, D.C. — The National Automobile Dealers Association repeated its warning on Monday about the possibility of dealer-assisted financing coming to an end if proposed legislation passes completely through Congress.
NADA officials indicated that broad reform to the nation's financial system soon will be considered by the Senate. They stressed that President Barack Obama already has indicated that he wants to overturn a provision in a House-passed bill that excludes auto dealers from a newly proposed consumer financial protection agency.
The Senate is to take up discussion about creating a Bureau of Consumer Financial Protection (BCFP) later this month. NADA believes the agency would have sweeping powers to fundamentally alter or even potentially regulate out of existence auto financing at dealerships.
Furthermore, association leadership contends that the new bureau would also have the authority to reduce or eliminate dealer compensation for arranging a loan or lease. NADA thinks the government power could even limit a salesperson's commission connected to a sale if the vehicle is financed.
However, Sen. Sam Brownback, a Republican from Kansas, reportedly has agreed to offer an amendment to exclude auto retailers from the bureau's jurisdiction.
"The amendment faces a steep uphill battle as consumer groups and the Obama administration have come out in full-force against the idea of exempting auto dealers from the jurisdiction of this bureau," NADA officials emphasized.
Obama said in a statement back on March 15 that he wants a broad, independent agency to regulate all financial entities. NADA noted that the agency could oversee even those entities that had nothing to do with the 2008 credit crisis.
"I will not accept attempts to undermine the independence of the consumer protection agency, or to exclude from its purview banks, credit card companies or non-bank firms such as debt collectors, credit bureaus, payday lenders or auto dealers," Obama stated.
Last December, NADA recalled that the House voted to retain the current oversight of dealers by the Federal Reserve, the Federal Trade Commission and numerous state consumer protection laws through language identical to the Brownback amendment.
David Regan, NADA vice president of legislative affairs, gave some guidance about what dealers could do to ensure their voice is heard on Capitol Hill.
"Dealer-assisted financing is under attack and dealers should be calling their senators to ask them to support the Brownback amendment," Regan noted.
"With the bill already out of committee, the financial reform bill is likely to move very quickly," he continued.
"Dealers, their sales team and their financing staff should immediately weigh in with both of their senators," Regan concluded.