It’s a springtime sales event for America’s auto dealers. Over the next week or so, they’ll toil feverishly to close deals — not with car buyers, but with members of the Senate in an effort get dealerships exempted from consumer protections in the banking reform bill.
Senators should walk away.
Autos are the second largest purchase most consumers make, after their homes.According to the Center for Responsible Lending, Americans pay $20.8 billion a year in excess interest by taking out loans through dealerships instead of going to a bank or credit union. Leasing documents are notoriously opaque. Dealerships also routinely finish at or near the top in complaints to Better Business Bureaus and state consumer protection agencies.
None of this is stopping the dealers from leading a long list of industries looking for special treatment in the financial reform legislation now on the Senate floor. The dealers argue that they aren’t part of Wall Street, didn’t have much to do with the housing bubble, and therefore shouldn’t have to answer to a new consumer lending protection agency that would be created within the Federal Reserve.
Payday lenders are looking for the same exemption, even though they, too, are notorious for squeezing consumers. And a host of corporations that buy derivatives to hedge risk, on anything from rising jet fuel prices to currency fluctuations, are balking at another portion of the financial reform measure. They don’t want to pay the extra costs associated with bringing these complex transactions onto open markets.