Auto dealers lobbied hard to win an exemption from the new consumer protection agency created by Congress' pending financial reform bill, but their free pass could fall by the wayside today as senior Democrats and President Obama press for a crackdown on deceptive lending practices in all industries.
(Photo: AmericaJR.com)The latest salvo in the White House's drive to rein in auto dealers, whose loans to car buyers account for an estimated $850 billion in outstanding American debt, came late yesterday in a letter to senators from Army Secretary John McHugh.
"Though the Army does educate our soldiers about buying cars in our normal financial education curriculum, the fact remains that junior enlisted soldiers -- many of whom are drawing a paycheck for the first time in their lives and are inexperienced in financial matters -- remain an easy target for dishonest brokers," McHugh wrote.
The warning from McHugh, a former Republican member of Congress, came in the wake of a personal statement from Obama urging senators to reject any consumer carve-out for auto dealers. The upper chamber could vote as soon as today on an amendment offered by Sen. Sam
Brownback (R-KS) that would officially exempt car dealers from the
bill's new consumer rules.
Senate Banking Committee Chairman Chris Dodd (D-CT) joined the chorus of critics last night in a floor speech, telling colleagues that the bulk of car dealers do not “engage in financing that cause problems … but we
don't write laws for the many; we write laws for the few."
