ALEXANDRIA, Va. — While there is a lot of talk in the media
these days about America's economic recovery, the truth is that most Americans
are experiencing a recovery that is tepid, at best. Many of us are still
struggling to get out from under five years of negative growth and record
unemployment.

Dealers, who are often the biggest employers, tax sources,
and economic drivers in their communities, are working overtime to succeed in
these tough conditions.

Dealers don't mind hard work. But one thing we don't need in
today's competitive environment is more regulatory oversight from Washington,
D.C. And yet, that is the gift that Washington keeps sending us. More rules,
more regulations, and conflicting forecasts about what will come next.

The latest regulatory hit comes to us direct from
Washington's Consumer Financial Protection Bureau (CFPB), which was established
in 2011 in response to the recession and banking crisis. It was meant to
regulate the banks and financial firms we once considered ‘too big to fail.' We
all fought to ensure dealers' exemption from the CFPB's oversight, but that
hasn't prevented the agency from trying to regulate us by targeting the banks
with whom we work.

In their latest misguided push to ‘protect' the American
consumer, the CFPB has contacted several banks that finance dealer-arranged
auto loans, informing them that they could be sued by the government if they do
not end their practice of allowing dealers the discretion to adjust auto
financing. What the CFPB is suggesting is that dealers are using their dealer
reserve to discriminate against certain protected classes of people.

Unfortunately, the CFPB has declined to share with us, the
banks, or Congress the methodology they used to determine that discretionary
lending has a negative impact on protected classes of consumers, or how
eliminating it will impact the industry. Obviously, discriminatory practices
have no place in the auto business. Let's not pretend, however, that switching
to flat fees won't change the way we operate, or impact our ability to run a
small business and create jobs in our communities.

In addition, the Wall Street Journal is now reporting that
the CFPB is also interested in targeting the sale of extended warranties,
service contracts, and other financial products. Products that kept a lot of
dealership doors open, and saved jobs, when car sales plummeted in 2009.
Further unnecessary regulation of the sale of these products could have a
disastrous impact on the auto retail industry, slowing our still-fragile
economic recovery.

If the CFPB truly wants to regulate our industry, down to
the last tenth of a percentage point of the loans we can offer, then they first
need to make a concerted effort to understand our industry. We have initiated a
dialogue with them, but much work still needs to be done. Most importantly,
they need to acknowledge the value we bring to our communities, towns, and
states, in the form of jobs and economic impact.

Dealers who are traveling to Washington next week for
AIADA's Auto Industry Summit will learn more about the CFPB's crusade against
discretionary auto financing, and how they can join the conversation. To those
dealers, I want to say thank you in advance — you are the voice of this
industry, and your involvement benefits us all. To everyone else, it's not too
late to register! Click here to learn more about the Summit.

Jenell Ross is the current chairwoman of the American
International Automobile Dealers Association.

Continue the conversation with SubPrime Auto Finance News on LinkedIn and Twitter.