WASHINGTON — Led by NADA's strong grassroots efforts, auto dealers would be exempt from oversight by a new Consumer Financial Protection Agency (CFPA) under a sweeping overhaul of the nation's financial regulatory system passed by the U.S. House of Representatives on Dec. 11.
An amendment supported by NADA and sponsored by Rep. John Campbell, R-Calif., to exclude auto dealers from CFPA jurisdiction gained broad, bipartisan support, while a separate amendment that would have included auto dealers under the jurisdiction of CFPA was withdrawn by its sponsor, Rep. Mel Watt, D-N.C. The 1,279-page bill passed by a vote of 223-202.
To address concerns from Rep. Watt and other committee members, NADA worked with Rep. Campbell to clarify the scope of the exemption. (Read the letter NADA sent opposing the Watt amendment). Under the bill, banks and finance companies that fund and service auto loans arranged by dealers for their customers would be regulated by CFPA, including dealerships that operate “buy here, pay here” lots.
“It is quite clear that Representatives on both sides of the aisle realized auto dealers were not part of the problem that caused the economic downturn,” says David Westcott, chairman of NADA’s Government Affairs Committee and a multifranchise dealer from North Carolina. “Dealer-assisted financing is already effectively and efficiently regulated at both the federal and state levels.”
The financial reform legislation now heads to the Senate Banking Committee, which will consider it in early 2010.
