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NINETY EIGHT REGENCY

Crackdown sought in auto dealer rip-offs of troops

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Crackdown sought in auto dealer rip-offs of troops

BY JUSTIN HYDE

FREE PRESS WASHINGTON STAFF

WASHINGTON — U.S. Treasury Secretary Tim Geithner today embraced calls for tougher consumer protection rules on auto dealers, following complaints from the armed services of dealers ripping off troops and their families.

The move puts the Obama administration against auto dealers, who have fought to be exempt from a proposed Consumer Financial Protection Agency, saying current law was sufficient to deal with any abuses by individual dealers. The House bill that passed last year exempts dealers, while the Senate version under debate does not.

The meeting with Geithner came after the Department of Defense warned last month that the cadre of financial advisers it provides to members of the armed forces often uncovered shady dealing by auto dealers, such as hidden fees in loans, discrimination in lending and failing to pay off liens on trade-ins.

“You still see a lot of things that this country should never put up with, people taking advantage of men and women who serve their country, offering them loans at exorbitant interest rates that they have no prospect of repaying,” Geithner said.

“This is a substantial problem still for the country. It’s not something the American people should put up with.”

The CFPA as envisioned by supporters would regulate all kinds of financial services, from home mortgages to credit cards and auto loans, with the power to pursue companies for bad practices.

The National Automobile Dealers Association has opposed allowing the CFPA to cover auto dealers, saying a new bureaucracy was unnecessary.

“Creating new regulatory mandates on top of the numerous federal and state requirements that already govern auto financing will only drive up costs, limit vehicle financing options and, for many consumers, effectively eliminate their ability to obtain financing to meet their vehicle needs,” NADA chairman Ed Tonkin said earlier this month.

link:

http://www.freep.com/article/20100325/BUSINESS01/100325045/1210/Crackdown-sought-in-auto-dealer-rip-offs-of-troops

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