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Thursday, May 13, 2010 RSSSEND TO A FRIENDPRINT
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Auto Dealers Take Issue with Misleading Statements from White House on Financial Reform
Opinion: Washington's Bungling Auto Engineers
Senate Finance Bill Eases Up on Small Banks and Firms
Top Stories
Auto Dealers Take Issue with Misleading Statements from White House on Financial Reform

WASHINGTON – NADA Chairman Ed Tonkin issued the following remarks yesterday in response to a statement from President Obama on financial reform:

“Sadly, the White House is continuing to issue misleading statements in its efforts to get auto dealers wrongly included in Wall Street reform legislation. Much of what’s included in its latest statement is pure fiction.

“For example:

1. It urges senators not to support the Brownback amendment because financial reform needs to include ‘auto-dealer lenders.’ But the Brownback amendment does not exempt auto-dealer lenders. Any dealer, bank, credit union or other finance company that actually underwrites and funds auto loans would be subject to the proposed consumer protection agency. And we’re absolutely fine with that. What we don’t support is including auto dealers who simply assist customers to find auto financing. These dealers are not banks. They are facilitators. And dealer-assisted financing is already heavily regulated – and should not be subject to double regulation.

2. The enormous set of consumer protection laws that currently governs dealers will be preserved under the Brownback amendment. Despite what the Administration suggests, unfair and deceptive practices are currently illegal and would remain so if the Brownback amendment is passed. Moreover, all of the laws that dealers are currently subject to (e.g., Equal Credit Opportunity Act, Truth In Lending Act, Federal Consumer Leasing Act, Fair Credit Reporting Act, Gramm Leach Bliley Act, Federal Trade Commission Act) would still exist and apply to dealers if the Brownback Amendment is approved.[1]

“At the core of the Administration’s attack on dealer-assisted financing is the assertion that dealers routinely place consumers in ‘loans with higher interest rates than the borrower qualifies for.’ This statement is patently false. What’s worse, it manifests either an inability or a refusal on the part of the Administration to recognize how the market, which they claim needs more regulations, actually works.

“Dealer-assisted financing – which is always optional – regularly affords consumers more favorable terms than those available through other sources. Yet, the Administration seeks to subject dealers to an agency which is being directed to create an uneven playing field by declaring off-limits for dealers practices that will be preserved for community banks, credit unions and other direct lenders.

“For the President, in the statement attributed to him, to malign an entire industry made up of Main Street businesses run by dedicated men and women and their employees is shocking. We urge senators to resist this latest round of scare tactics and vote in favor of the Brownback amendment to preserve affordable auto finance options for consumers."

[1] The Brownback Amendment specifically states that, “nothing in this section shall be construed to modify, limit, or supersede the rulemaking or enforcement authority over motor vehicle dealers that could be exercised by any Federal department or agency on the day before the date of enactment of this Act.”
Source: NADAFrontPage.com

Editor's Note: The vote on the Brownback Amendment may occur as early as today, so it is urgent to keep up the grassroots effort, especially in light of the president's misleading statement in opposition to the Brownback Amendment, says David Regan, NADA vice president of legislative affairs. Senators can be reached through the Capitol switchboard at (202) 224-3121. Additional documents supporting NADA’s position on the Brownback Amendment can be found at www.nada.org/brownback.

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Opinion: Washington's Bungling Auto Engineers
By Paul Ingrassia

Congress is designing everything from the braking system in your next car to the loan with which you'll finance it. Be very afraid.
Having spent more than $100 billion to rescue the American auto industry, Congress now seems intent to destroy what it saved. I'm not sure what to call this, but maybe the best term is vehicular homicide. (Read more)
Source: The Wall Street Journal

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Senate Finance Bill Eases Up on Small Banks and Firms

Lawmakers, with bipartisan support, approved a series of refinements to the bill that essentially exempt more than 7,500 community banks from examination by a new consumer-protection regulator and permit small banks to pay less than they had in the past for deposit insurance. (Read more)
Source: The Wall Street Journal

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Quotable
 
"Sadly, the White House is continuing to issue misleading statements in its efforts to get auto dealers wrongly included in Wall Street reform legislation. Much of what's included in its latest statement is pure fiction."

   
-- NADA Chairman Ed Tonkin, in a statement in response to remarks from the White House on financial reform, May 12


 "... the proposed Wall Street reform ... would add another regulatory layer on top of the multiple agencies that already regulate dealer-originated financing of their customers' vehicles. The redundancy will add complexity and costs to making car loans. The irony is that auto lending was a victim of the financial crisis, not a cause."

    -- Paul Ingrassia, Wall Street Journal columnist, on how, "having spent more than $100 billion to rescue the American auto industry, Congress now seems intent to destroy what it saved," The Wall Street Journal, May 13


"Auto dealers are a part of Main Street, not Wall Street, and they are not responsible for the financial meltdown. Auto dealerships, including those located near military bases, are currently regulated by the Federal Trade Commission on the federal level and by several local and state agencies." 

    -- Sen. Sam Brownback, R-Kan., Automotive News, May 12

Video Highlights
 

NADA Issues Legislative Call to Action for Brownback Amendment


Dealers to Senators: We Are Not Banks


CBS Evening News: NADA Chairman Says Dealers Are Not Banks


C-SPAN: Sen. Brownback on Need to Exclude Auto Dealers from Financial Reform

NADA Marketplace 
 

NADA University: 'We Build Champions'

Red Flags Deadline Draws Near

With the revised June 1, 2010 enforcement date for the FTC "Red Flags" Rule rapidly approaching, NADA University has three ways you can find out if your dealership is adequately prepared. (Read more)


 
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Isn't it time to replace your worn-out PC? NADA members can save $388 on HP’s ProBook 4415s Notebook PC while supplies last. Included are the new Windows® 7 Professional, a full 14.0-inch display and a full-sized keyboard. To see this promotion and all discounted products from HP, visit NADA's PC Purchase Program site (member log in required).

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