Dealers Seek Greater CFPB Transparency on Auto Finance
NADA’s Washington Conference covers issues ranging from financing to taxes
More than 400 franchised auto dealers weighed in with Washington lawmakers earlier this week on the Consumer Financial Protection Bureau’s (CFPB) effort to end the discounts that customers can negotiate when financing a car or truck through a dealership. The visits to Capitol Hill were organized as a part of the National Automobile Dealers Association’s Washington Conference.
Dealers asked their senators to sign the letter authored by Sens. Rob Portman, R-Ohio, and Jeanne Shaheen, D-N.H., requesting that the bureau explain how eliminating a dealer's ability to “meet or beat” a competitor's rate is good for consumers.
A key ally in the dealers’ fight, Rep. Gary Peters, D-Mich., told the dealers in a speech on Thursday that he’s “very concerned” about the CFPB’s recent effort to alter the $800 billion auto finance marketplace without a hearing or offering analysis for public scrutiny.
Rep. Gary Peters
“I believe it’s absolutely essential that we have a very competitive marketplace so that folks can get the lowest rate they can for their loans, and certainly dealer-assisted financing is about that,” said Peters, who along with 12 Democrats on the House Financial Services Committee sent a letter to the CFPB demanding greater transparency.
“The CFPB has not provided any information about its study or how they compare the numerous factors that can affect auto interest rates,” said NADA Chairman Dave Westcott, a new-car dealer in Burlington, N.C. “Even more shockingly, the bureau failed to examine how this change could impact the cost of credit for consumers. In-dealership financing has been enormously successful in both increasing access to credit, and reducing the cost for millions of Americans.”
Ivette Rivera, NADA vice president of legislative affairs, said that senators were receptive to the dealer’s request to sign on to the Portman-Shaheen Auto Finance letter.
“Early reports from our Hill meetings indicate that members of Congress on both sides of the aisle think that greater transparency from the CFPB is needed,” Rivera added.
Sen. Ted Cruz
In earlier remarks at NADA’s legislative conference, Sen. Ted Cruz, R-Texas, a rising star in the Republican Party and a potential 2016 presidential candidate, outlined his plan for restoring economic growth, which included government spending cuts, comprehensive tax reform and repealing and defunding the new health care law.
Brian Hamilton, chairman of NADA’s Government Relations Committee, charged the dealers to weigh in on other key issues, such as taxes and burdensome regulations. He said lawmakers are considering eliminating the last-in-first-out (LIFO) accounting method.
“Tell Congress that if we lose LIFO, we lose working capital and that will cost jobs,” added Hamilton, a new-car dealer in Nebraska.
Hamilton also urged dealers to talk with their senators about making improvements to S. 921, the rental car recall bill, because “grounding every rental and loaner under recall – for minor reasons – is excessive.”
Other speakers included House Republican Conference Chair Cathy McMorris Rodgers, R-Wash.; David Strickland, administrator for the National Highway Traffic Safety Administration; and Karl Rove, political strategist and commentator.
Editor’s note: Dealers are urged to call both their senators to ask they sign the Portman-Shaheen Auto Finance letter, which requests greater transparency from the CFPB on indirect lending. Click here for a copy of the letter. The Senate switchboard can be reached by calling (202) 224-3121. Operators will direct dealers to the senators from their
state. Click here for more information on the issue.
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