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NINETY EIGHT REGENCY

Car dealers make final push for exemption

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Car dealers make final push for exemption

Owners go to Senate seeking to be excluded from bill for new consumer watchdog agency

David Shepardson / Detroit News Washington Bureau

Washington -- Auto dealers are making a last-ditch push to be excluded from the oversight of a new consumer watchdog agency.

About 250 dealers were on Capitol Hill Wednesday, lobbying for an amendment to a broad overhaul of the nation's financial system.

The nation's 18,000 dealers have come under criticism from the Pentagon and consumer advocates for what have been characterized as unethical practices. While dealers search for financing for customers, they are allowed to make a profit on the financing. And some say they've taken advantage of customers.

U.S. Sen. Sam Brownback, R-Kan., has tweaked his amendment that would bar oversight for auto lending. The revised proposal promotes "coordination" with a new military liaison within the Consumer Financial Protection Agency.

"This bill regulating auto dealers is not necessary," Brownback said Wednesday.

"Let's exempt auto dealers that did not cause this mess."

A vote on Brownback's amendment is expected today. Dealers were excluded from oversight in House legislation.

The National Automobile Dealers Association applauded the changes to Brownback's amendment and the liaison "to ensure the welfare of our service members is effectively monitored," spokesman Bailey Wood said.

George Sharpe, president of the Sharpe Collection in Grand Rapids, a BMW dealership, is meeting with Michigan Sens. Carl Levin, D-Detroit, and Debbie Stabenow, D-Lansing, to urge them to back the dealers.

"It's a new layer of restrictions that they will put on you that are not necessary," Sharpe said. "We don't know what the rules will be."

President Barack Obama and the Pentagon have called on Congress to oppose the exemption. Obama said the proposal would undermine "strong consumer protections with a special loophole for auto dealer-lenders."

Exempting dealers, he said, "would allow them to inflate rates, insert hidden fees into the fine print of paperwork, and include expensive add-ons that catch purchasers by surprise."

An exemption, Obama added, "guts provisions that empower consumers with clear information that allows them to make the financial decisions that work best for them and simply encourages misleading sales tactics that hurt American consumers."

From The Detroit News: http://detnews.com/article/20100520/AUTO01/5200350/1148/Car-dealers-make-final-push-for-exemption#ixzz0oTS7E8ky

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Dealers stymied in efforts to win oversight exemption

David Shepardson / Detroit News Washington Bureau

Washington -- The nation's 18,000 auto dealers failed in a bid late Thursday to convince the Senate to exempt them from oversight by a new consumer watchdog agency, but they haven't given up.

By a 59-39 vote, the Senate approved a sweeping overhaul of the nation's financial system. Despite heavy lobbying by dealers, who argued they didn't cause the financial meltdown, the Senate didn't vote on an amendment sponsored by Sen. Sam Brownback, R-Kansas, that would have exempted most auto lending from oversight from the Consumer Financial Protection Agency.

Dealers have spent more than three months pushing the Senate to exempt them. In December, the House voted to exempt car dealers from oversight.

Instead, the Senate will vote on a procedural motion Monday on whether to instruct negotiators for the Senate "to accept the House language related to auto dealers in House-Senate conference negotiations subject to the provisions of the Brownback amendment," said Bailey Wood, a spokesman for the National Automobile Dealers Association.

If dealers win that motion, it could give House supporters more ammunition to try to leave dealer oversight out of the final bill.

The White House and Pentagon have strongly backed including dealers under oversight, arguing that unscrupulous dealers take advantage of some buyers, especially some young enlisted members of the military.

The procedural move to drop the Brownback amendment by Republicans also scuttled plans by Sen. Carl Levin, D-Detroit, for a vote on his amendment, cosponsored by Sen. Jeff Merkley, D-Ore., that would have barred banks from making risky investments using their own funds or owning hedge funds and private-equity funds.

It also sought to end conflicts of interest on Wall Street.

"We have missed an opportunity to strengthen that provision by putting in statute, without the ability of agencies to modify, prohibitions on risky trading by banks, and strict limits on such trading by nonbanks," Levin said. "And of prime importance, our amendment would have ended the conflicts of interest that now allow financial institutions to assemble and sell complex financial instruments, even instruments with a significant possibility of failure, and then bet that those instruments will fail, profiting mightily from their bets against their own clients."

Negotiators from the House and Senate will spend weeks trying to craft a compromise bill to send to President Barack Obama for his signature.

From The Detroit News: http://detnews.com/article/20100521/AUTO01/5210373/1148/auto01/Dealers-stymied-in-efforts-to-win-oversight-exemption#ixzz0oZGaZvRh

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