The Truth About Cars » Dealer Finance http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 24 Apr 2014 16:18:16 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Dealer Finance http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Obama: Dealer Finance Must Be Regulated http://www.thetruthaboutcars.com/2010/05/obama-dealer-finance-must-be-regulated/ http://www.thetruthaboutcars.com/2010/05/obama-dealer-finance-must-be-regulated/#comments Wed, 12 May 2010 18:12:31 +0000 http://www.thetruthaboutcars.com/?p=356311 President Obama has weighed in on a crucial matter facing legislators attempting to overhaul America’s financial system: whether or not auto dealer finance should be subject to regulation by the new Consumer Protection Agency. Unsurprisingly, he has come down on the side of regulation, specifically echoing concerns voiced earlier by the Pentagon. The National Automobile Dealers Association has vowed to fight attempts to regulate dealer finance.

Statement by President Obama on Financial Reform
Throughout the debate on Wall Street reform, I have urged members of the Senate to fight the efforts of special interests and their lobbyists to weaken consumer protections.  An amendment that the Senate will soon consider would do exactly that, undermining strong consumer protections with a special loophole for auto dealer-lenders.  This amendment would carve out a special exemption for these lenders that would allow them to inflate rates, insert hidden fees into the fine print of paperwork, and include expensive add-ons that catch purchasers by surprise.  This amendment guts provisions that empower consumers with clear information that allows them to make the financial decisions that work best for them and simply encourages misleading sales tactics that hurt American consumers. Unfortunately, countless families – particularly military families – have been the target of these deceptive practices.

Claims by opponents of reform that this legislation unfairly targets auto dealers are simply mistaken.  The fact is, auto dealer-lenders make nearly 80 percent of the automobile loans in our country, and these lenders should be subject to the same standards as any local or community bank that provides loans.  Auto dealer-lenders offering transparent and fair financing products to their customers should welcome these reforms, which will make their competitors who don’t play by the rules compete on a level playing field.

We simply cannot let lobbyist-inspired loopholes and special carve-outs weaken real reform that will empower American families.  I urge the Senate to continue to defeat the efforts of special interests to weaken protections for all American consumers.

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Pentagon Backs Dealer Finance Regulation, http://www.thetruthaboutcars.com/2010/03/pentagon-backs-dealer-finance-regulation/ http://www.thetruthaboutcars.com/2010/03/pentagon-backs-dealer-finance-regulation/#comments Wed, 24 Mar 2010 00:30:47 +0000 http://www.thetruthaboutcars.com/?p=350127

Remember when we reported that the cash cow known as in-house dealer finance wouldn’t be covered by the Consumer Financial Protection Act, currently making its way through congressional committees? That version of the bill passed the House Financial Services Committee (with some questionable support), but now Automotive News [sub] reports that the Senate Banking Committee has passed its own version which does make dealer finance subject to regulation by the Consumer Financial Protection Bureau. The Senate version would also make the CFPB an office of the Federal Reserve, rather than a stand-alone agency. So, should an agency set up to prevent another financial crisis extend regulation to dealer finance operations? Dealers aren’t happy about the idea, but traditional consumer advocates aren’t the only ones saying yes…

Undersecretary of defense for personnel and readiness Clifford Stanley is one of the most surprising advocates for tough consumer protection oversight, even going as far as to single out auto sales as a trouble area. In a letter to the Treasury [via ABC News] he wrote:

The Department of Defense would welcome and encourage CFPA protections provided to service members and their families with regard to unscrupulous automobile sales and financing practices, provided such protections would not limit access to legitimate products… there are still documented cases of service members falling victim to predatory practices and prohibitively expensive products… We believe the intervention of the CFPA in overseeing auto financing and sales for service members will help protect them and will assist us in reducing the concerns they have over their financial well-being

Dealers weren’t the cause of the mortgage meltdown. In fact, dealers still have problems with access to credit and are as much a victim of what happened as the average consumer
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