NADA: Financial Reform Law Protects Consumers and Keeps Auto Financing Affordable, Accessible

All auto loans and lending sources will see additional oversight

WASHINGTON, July 21 -- With President Obama’s signature, the most significant overhaul of the nation’s financial system is now law and with it, consumers will still be able to find competitive financing options at auto dealerships.

Ed Tonkin, chairman of the National Automobile Dealers Association (NADA), praised the efforts of lawmakers who fought to preserve the existing regulatory structure for dealer-assisted financing, which protects consumers and ensures affordable auto credit.

Tonkin also cautioned that any regulatory overreach could hurt the very people it is looking to protect by disrupting the extremely competitive auto finance marketplace. Click here for the full Tonkin statement on NADAFrontPage.com.

The full implementation of the Dodd-Frank legislation will take some time, so the new Bureau of Consumer Financial Protection probably will not be operational for 6 to 12 months.  As the new agency takes shape, the following points are important for dealers and consumers alike.

• Consumers win when they have multiple financing options. Consumers can always rely on their own banking relationships, but dealers’ relationships with numerous lenders and manufacturers’ finance companies allow dealers to arrange financing that regularly meets or beats bank or credit union terms. 

• The new bill balances strong consumer protections and affordable auto credit. Placing another layer of complex and unnecessary regulations on small business dealers, who merely facilitate financing, would unnecessarily result in more expensive credit for consumers attempting to purchase a new vehicle

• The new Bureau of Consumer Financial Protection will have direct federal oversight over all auto loans. All banks, finance companies, credit unions, and dealerships that directly underwrite, fund, and service auto loans will be regulated.

• The bill expressly protects the full range of federal and state consumer protection laws and regulations that govern dealer-assisted financing. Dealers’ retail financing activity will continue to be effectively regulated by the Federal Reserve Board, the Federal Trade Commission and 50 state consumer protection agencies. (Read more)

"These new rules are the most expensive fuel economy mandates in history. In part, this is a result of three different fuel economy standards set by three different agencies (U.S. Department of Transportation, U.S. Environmental Protection Agency and the California Air Resources Board) under three different sets of rules. This is in direct contradiction to the one national fuel economy standard established by Congress in 2007." Read more at NADAFrontPage.com.

 

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