TYSONS, Va. (Dec. 8, 2022)—A bipartisan group of 47 members of the U.S. Senate and House of Representatives called on Federal Trade Commission (FTC) Chair Lina Khan to withdraw the increasingly controversial proposed “Motor Vehicle Dealers Trade Regulation Rule” (or “vehicle shopping” rule).  In a November 29 letter to Chair Kahn, the members express concern that the Commission’s process has been “inadequate and increases the risk that a final rule may create harmful, unintended consequences for both consumers and small businesses,” and urged the FTC to issue a Request for Information (RFI) or an Advanced Notice of Proposed Rulemaking (ANPRM) in place of the rule.

The bipartisan, bicameral letter comes on the heels of a November 17 letter to Federal Reserve Board Chairman Jerome Powell from senior House Financial Services Committee members Reps. Blaine Luetkemeyer (R-Mo.) and David Scott (D-Ga.). The letter expressed concern at the rule’s inclusion of “several new and untested consumer disclosures that, if adopted, would come into conflict with existing Truth in Lending Act requirements” and “create further confusion for tens of millions of consumers each year as they shop for new and used vehicles.” 

The vehicle shopping rule was proposed by the FTC on July 13.  The unprecedented rule violates the FTC’s own procedures by failing to provide adequate notice or opportunity for public engagement.  It would also overwhelm car buyers and small businesses with additional paperwork costing businesses hundreds of millions of dollars, while needlessly lengthening the car buying process.  Among other items, the proposed rule would require an extensive series of oral and written disclosures for communicating with consumers related to the vehicle sales price, certain credit terms, and voluntary protection products (VPPs).

In the November 29 letter to Chair Khan, the House and Senate members note that protecting consumers is paramount, and the Commission’s process for issuing the proposed Rule “has failed to demonstrate the need for additional regulation or that the proposed mandates will benefit consumers.”  Members further stated that the Commission failed to conduct consumer testing of any of the new requirements.

Rather than advancing the proposed rule, members of Congress urged the Commission to “gather data and verify that any potential solutions will serve consumers” through an RFI or ANPRM, noting that there is “no statutory deadline for the Commission to act since Congress has not mandated a rulemaking on this issue.”

“We appreciate the leadership of Rep. Kelly Armstrong and the bipartisan support of Congress since the FTC’s “ready-fire-aim” approach to this flawed ‘’vehicle shopping rule” would make the auto buying experience worse, not better, said Mike Stanton, President and CEO of NADA.  “As dealers nationwide are working to streamline the sales process post-pandemic, the FTC’s proposal goes the other way by adding more paperwork and complexity for car buyers.”

“We also thank Reps. Luetkemeyer and Scott for alerting Chairman Powell of conflicts between the vehicle shopping rule and TILA,” continued Stanton. “This ill-conceived rule would not only upend the sales process for consumers and small businesses, the data the FTC relies upon to support its rule is either unverified, previously rebutted, anecdotal, or non-existent.”