Car dealers protected from new consumer protection agency

[bunnysoft]

Source: Raw Story

10/27/2009

By Paul Kiel

Last week, the House Financial Services Committee voted to establish a new Consumer Financial Protection Agency. The agency would have broad authority – but thanks to fierce lobbying, it’ll also have big gaps. Consumer advocates point to an exemption for auto dealers as one that’s particularly worrisome.

An amendment stripped auto dealers from the proposed agency’s oversight. With strong backing by the powerful dealer lobby, and despite the White House’s attempts to kill it, the amendment easily passed in the committee, 47-21. Nearly half of the panel’s Democrats voted for the amendment along with the committee’s Republicans, who’ve generally opposed the new agency.

The exception for auto dealers sets up an odd situation: Many of the larger financial institutions that provide auto loans will be under the new agency’s supervision, but that supervision would stop at the dealer’s door. That’s more than a technicality, consumer advocates say, because some dealers exploit their role as the middleman between the consumer and the loan.

Those dealers tack on unnecessary fees and steer customers into higher-cost loans, splitting the difference with lenders. “The buying process itself is intentionally structured to be needlessly complicated and time-consuming to wear down and confuse car buyers,” said John Van Alst of the National Consumer Law Center.

Read more: http://rawstory.com/2009/10/car-dealers-protected-consumer-protection-agency/

[elocs]

1. Since they are as pure as driven snow and justifiably trusted they deserve the protection. n/t

[Lasher]

2. Don't worry, they have invisible hands so they can self regulate. n/t

[Wilms]

3. No used car salesman jokes required. n/t

[NYC_SKP]

4. I think, I hope, that state consumer regulatory agencies will still have power to protect us. nt

[defendandprotect]

5. ??????

[PSPS]

6. "needlessly complicated and time-consuming to wear down and confuse"

"The buying process itself is intentionally structured to be needlessly complicated and time-consuming to wear down and confuse car buyers," said John Van Alst of the National Consumer Law Center.

That's the republican MO for ripping people off, from Medicare Part D to their idea of "health care reform."

[Robb]

7. Ah, John Campbell (R-CA) got his amendment.

A former car dealer who got more than $170K in campaign donations from auto dealers, and $6 million in rent from auto dealers in 2008.

According to the Center for Responsive Politics, those voting against the bill "received an average of 20 percent more in contributions from financial interests over the past two-and-a-half years than the bill's supporters."

Bought and paid for.