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Obama administration wants auto dealers subject to new oversight

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Obama administration wants auto dealers subject to new oversight

David Shepardson / Detroit News Washington Bureau

Washington -- The Obama administration stepped up its rhetoric today opposing efforts by the nation's 18,000 auto dealers to win an exemption from new oversight.

Deputy Treasury Secretary Neal Wolin said the administration would push to keep dealers under the oversight from a new consumer watchdog agency, despite a Senate vote Monday in support of auto dealers.

"We will fight hard on this front," Wolin said in a speech today in Baltimore. "The issue is simple: We have no interest in interfering with car dealers' ability to sell cars. But where car dealers act like banks or like other non-bank financial companies, they should be subject to the same consistent rules of the road."

The administration suffered a setback Monday, when the Senate on a 60-30 vote approved a nonbinding motion that urges Senate negotiators to exempt auto dealers from the supervision of the proposed Consumer Financial Protection Agency. The agency is a key part of the Obama administration's overall plans to overhaul financial regulations.

Wolin cited the Defense Department's support for new auto lending oversight, noting the department has "expressed particular concern over the unscrupulous auto lending practices targeted at service members."

Auto dealers insist that behavior is already illegal under state and federal laws and should be stopped through enforcement of existing laws.

On Friday, the Senate approved a massive overhaul of the nation's financial system. The overhaul creates the Consumer Financial Protection Agency, whose oversight powers would include auto lending.

Auto dealers failed to get a vote on an amendment, proposed by Sen. Sam Brownback, R-Kan., exempting them. But in exchange, the Senate agreed to a vote Monday on his request urging Senate negotiators, who will work with the House in reaching a compromise version of the financial overhaul legislation, to exempt dealers.

Auto dealers lobbied Congress for months, and more than 250 dealers were on Capitol Hill last week, attempting to convince undecided senators to exempt them from additional federal oversight.

The nation's 18,000 dealers are one of the most politically powerful forces on Capitol Hill. Since 1990, dealers have donated $25 million to members of Congress.

A version of the House financial overhaul approved in December exempted the auto dealers. The motion approved Monday urges the Senate to go along with the House version.

Negotiators could still opt to keep the Senate language, although Monday's vote will make it more difficult. They want to send a bill to President Barack Obama for his signature by July 4.

Auto dealers contend they weren't responsible for Wall Street excesses and are already heavily regulated by state and federal laws. They argue new onerous regulations could make lending more expensive and prevent some people from getting auto loans.

link:

http://detnews.com/article/20100527/AUTO01/5270462/1148/Obama-administration-wants-auto-dealers-subject-to-new-oversight

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