Regulation: Car dealers say US reform Bill will mean less credit options
"The agency would have almost limitless authority to tell dealers how to run their finance operations and to impose unnecessary new hurdles to getting consumers the credit they need," says Ed Tonkin, chairman of the National Automobile Dealers Association (NADA).
OK, so some might say that if you call your group NADA, that's exactly what you'll get. but Tonkin has a point: "Dealer-assisted financing is simply a way to provide one-stop shopping for customers and offer them a better deal than they would get from going bank to bank," Tonkin, who owns a dealership in Oregon, said. "Last week I was able to get a family in a car simply because my dealership has relationships with more than a dozen lenders who were willing to extend credit even though they didn't have a stellar credit history."
There are more than 17,000 new-car and -truck dealers in the United Statesm says NADA. Dealerships are small businesses that make investments in their communities by hiring local workers, paying taxes and giving Americans the ability to get to and from their jobs. A Kansas Republican senator, Sam Brownback, is trying to get an amendment tabled so as to scale back the proposed Bureau of Consumer Financial Protection (BCFP) to only cover those who actually make loans. Auto lenders such as banks, automaker's finance companies and credit unions would still be covered under the new agency.
"Shouldn't the Wall Street reform bill focus on those who were responsible for last year's credit fiasco?" said Tonkin. "We were the victims of that crisis, not the cause."
Tonkin added that a there are already strict state and federal laws in place which seek to stamp out discrimination, protect people's privacy and prevent abusive business practices.
"These same regulations will remain under the Brownback Amendment," Tonkin said. "What's more, all the banks, finance companies and credit unions that actually make car loans will have to comply with the rules of the BCFP."
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