May 24, 2010
Dear Senator:
Consumers Union ®, the nonprofit publisher of Consumer Reports®, urges you to oppose Senator Brownback’s motion to instruct conferees to exempt auto dealers from the final financial regulatory reform bill when the Senate and House meet to resolve their differences on the legislation.
This motion is scheduled to come before the Senate on Monday. This special interest carve-out for auto dealers should be rejected. It could wind up hurting consumers where they can least afford it — their pocketbooks.
Auto dealers negotiate the price, terms and structure of car loans – whether they originate the loans or broker the loans. Given this fact, they should receive the same oversight as others in the primary credit market. Today, the rule-making and oversight of auto dealers is fragmented and ineffectual. There is ample evidence that minorities and the military are disproportionately targeted for auto loan overcharges.
The financial regulatory reform bill that just passed the Senate establishes the Consumer Financial Protection Bureau (CFPB) to ensure more efficient and effective oversight of consumer financial loans and services. Auto dealers who make loans to consumers should not escape the oversight of this newly created watchdog entity.
It would be ill-advised to provide an exemption to auto lenders from the newly created CFPB. While honest auto dealers should have nothing to fear, creating such a loophole will allow the unscrupulous to exploit hard working consumers. We urge you to ensure that consumers are able to obtain loans from lenders of their choice with the assurance that the same rules apply.
Please oppose the motion to instruct conferees to exempt auto dealers from the CFPB. If you have any questions, please contact Pamela Banks (202) 462-6262.
Sincerely,
Ellen Bloom
Director
Federal Policy and Washington Office
Pamela Banks
Senior Policy Counsel
Washington Office