OPPOSE AMENDMENT #3789

Senator Brownback’s Modified Amendment #3789 which provides a special interest carve out for auto dealers, does not protect US military personnel or any other American consumer from the abusive and unscrupulous practices of some auto dealers.

The auto dealer exemption, as now written, maintains the status quo and allows bad acting auto dealers to escape accountability.

• Amendment #3789 would shift the burden onto the military and individual servicemembers to avoid being defrauded, instead of allowing the new consumer agency to police auto dealer financing and enforce already existing consumer protection laws.

• Senator Brownback’s modification requiring the Federal Reserve and the Federal Trade Commission to work with the Office of Service Member Affairs to ensure that “servicemembers and their families are educated and empowered to make better informed decisions” is simply window dressing and does not address the real problem of auto scams jeopardizing US troop readiness.  For instance no amount of training and education protects US troops from:

o     Powerbooking because the victim in that instance does not have access to the documents the dealer submits to the finance company and therefore has no knowledge of the phantom add-ons the auto dealer is claiming.

o     Falsified Loan Applications where the victim does not have access to the loan documents that falsifies pay stubs and statements of income.

o     Failure to Pay Off Liens where the auto dealer promise to pay off the lien on the victim’s trade-in at the time of sale, but does not after the sale.  There is no way for victim to know in advance the dealer won’t pay off the lien.

• The Office of Service Member Affairs would in no way have the authority to actually require the Federal Reserve to issue meaningful new rules and/or require the FTC to enforce already existing rules.  The Brownback Amendment continues to maintain the status quo which allowed abusive auto lending to become a national problem.

• Moreover, Brownback’s modified amendment does nothing to address the auto scams plaguing non-military consumers and fails to address the very real civil rights problem of consumers of color being disproportionately steered into higher interest rate loans.