Senate auto finance bill has dealers fearing the watchdog

Posted by

A pair of small boxing gloves hanging from the rear-view mirror of a car. Auto dealers across America are in a fighting mood, as the new Senate auto finance bill seeks to lump all lenders under a federal watchdog.

Auto dealers are ready for a fight with the U.S. Senate over the new Senate auto finance bill. (Photo: ThinkStock)

Auto dealers believe that they’re already regulated enough by federal and state laws, which is part of the reason why roughly 100 dealers are lining up to lobby lawmakers over the new Senate auto finance bill, reports the Detroit Free Press. Car dealers fear that additional restraint would “limit credit for customers and hurt the economy,” but as key bill supporter Sen. Chris Dodd (D-Conn.) puts it, the single federal watchdog organization the bill would create to oversee auto lenders will protect consumers from being deceived and eliminate abuses against members of the armed forces.

Senate auto finance bill isn’t just for auto dealers

In the broad sense, the so-called Senate auto finance bill is actually more of a general lending bill. Any type of business that lends money to consumers, from banks to payday loans companies, mortgage lenders to credit card companies and auto dealers, would fall under the federal watchdog organization’s governance. President Obama and Congress tried to make this happen when the auto bailout first occurred last year, but auto dealers have maintained the upper hand. Recently, the House actually did pass a similar version of the proposed Senate auto finance bill, but the House bill exempted auto dealers.

Sen. Sam Brownback has another exemption ready that dealers want

Republican Senator Sam Brownback of Kansas has already written an amendment to the Senate auto finance bill that would exempt auto dealers from the regulatory watchdog’s gaze, much like the bill that passed the House. Needless to say, the auto dealers in Washington for their lobbying crusade want that in the bill and will use their considerable influence to try to get it.

Without it, their argument goes, offering auto loans to car buyers would be exceedingly difficult. James Waldron of Waldron Pontiac-Buick-GMC in Davison, Mich., calls the potential Senate auto finance bill “a huge injustice to consumers, because they’d have to go elsewhere to secure loans or they wouldn’t be available.”

Related Video:

Comments are closed.