Auto Dealers Win Exemption From Financial Protection Bureau Oversight

Some shady auto dealers are known to fake financial docs to get customers approved for loans they can’t afford. They refer to senior citizens as “people with oxygen tanks” and even straight up steal money from their ATM account. So, good thing that they can afford good lobbyists, because in the final hours they succeeded in making it so the new Consumer Financial Protection Bureau doesn’t apply to them.

It’s probably because the auto industry have had such a tough year, what with the plant closing and bailouts and massive recalls and all. We wouldn’t want them to be under the same gaze that’s watching mortgage lenders and every other financial product purveyor. That would just be mean.

Wall Street Reform’s Biggest Winners and Losers [Mother Jones]
Auto Dealers Maneuver for Exemption in Financial Reform Bill [The Center For Public Integrity]

PREVIOUSLY: So, What’s In The Financial Reform Bill?

Comments

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  1. Evil_Otto would rather pay taxes than make someone else rich says:

    Socialism bashing in 3.. 2..

    • ARP says:

      Huh? This isn’t socialism. It’s the opposite. It’s a loophole allowing the “free market” to rip off customers with limited consumer protection laws.

      • hansolo247 says:

        The “free market” also allows one to enter a contract when they are comfortable with.

        A fool and his money are soon parted. Doesn’t matter what the regulations are.

        I’m not saying it’s right, I’m just making a positive (the definition of this word in economics is not what you think) statement.

        If a consumer is ignorant, they should do research. They don’t need a nanny.

        • veg-o-matic says:

          That assumes perfect information all around. Market anarchists and their conservative bretheren so rarely acknowledge that one side usually has a significant information advantage – not to mention intimidation advantage.
          And that doesn’t even begin to address larger structural social issues that influence consumer decisions…

        • Draygonia says:

          Oh really? How about all of the food markets in the world jack their prices up 2 dollars for everything? How about they monopolize the car industry? Let me know how your free market works then. Take it with you on your way down the highway to hell.

  2. Loias supports harsher punishments against corporations says:

    Every time a bill is introduced that I like, and actually offers me some form of legal protection, it’s whittled down to something meaningless, or some moron makes a last minute adjustment that leaves a gaping hole (like in this case).

    Same thing happened when the Financial Reform bill excluded payday loan places.

    Just…wow.

  3. Duke_Newcombe-Making children and adults as fat as pigs says:

    Our wonderful Congress. Worth every dime paid for it.

  4. AllanG54 says:

    So…why should auto dealers be any different than mortgage brokers?

    • Wei says:

      I’m really not trying to sound like tin-foil hat guy, but the US government owns GM now, so maybe they’re unfairly biased?

      I think this sucks BTW, since dealer financing can be shady on a good day.

      • ARP says:

        No, I think its more related to the fact that they have a powerful lobby. Please correct me if I’m wrong, but isn’t a law that car makers must sell cars through dealerships?

  5. Mike says:

    I am seeing a disturbing pattern here:

    Everyone: BIG CRISIS PEOPLE ARE GETTING SCREWED WE NEED TO FIX THIS!

    Politicians: Right! We will fix it. Here is a draft of a bill that addresses the problems.

    Partisan hacks: Socialism! Fascism! ZOMG!

    Big campaign contributors who were part of the problem: Surely you will exclude us right? Now who do I make this contribution check out to?

    Politicians: Here you go, a bill that has a title that sounds like it fixes the problem, but really doesn’t.

    Other partisan hacks: Don’t criticize that steaming pile of sh*t bill, at least we have something. Now enjoy the new sh*t.

    Years later….

    Everyone: BIG CRISIS PEOPLE ARE GETTING SCREWED WE NEED TO FIX THIS!

    • jeffbone says:

      As the old saying goes:

      “If you want it bad, that’s how you’re going to get it.”

  6. Guppy06 says:

    In completely unrelated news, there is a great deal of voter anger against incumbents this election cycle.

    • Mike says:

      Although who will people elect? Tea Party candidates who are against the entire idea of the Financial Protection Agency or any kind of regulation? Left wingers who will be labeled a communist anytime they propose anything? Who should we vote for?

  7. Shonky McShonk says:

    show some nads oh foreign born leader.

    veto the bill and tell the american people why and tell them EVERY american must do their share in these times.

    no one gets exemptions.

  8. dblevins says:

    This just plain stinks.

  9. oldwiz65 says:

    They were smart enough to slip “gifts” to the right members of Congress to get the exemptions. I think we’ve moved from a democracy to a plutocracy. Congress sells laws to the highest bidder.

  10. Saltillopunk says:

    Show me a dealer who is a lender of money to customers. The truth is the Mother Jones article gets it wrong when stating they make 80% of the loans to customers. Dealers do not lend money, but act as middle men to various banks and finance firms. If the point of the bill was to protect the public from shady lending practices, then technically the dealer’s should be exempt as it is the source of the financing (bank, etc) enacting the final terms and conditions of a loan.

    To address the examples given, if a dealer cooks the documents, it is still up to the finance company to verify the information submitted before approving the loan. If dealer makes unauthorized withdrawals from an ATM, then that is an act most likely addressed by criminal law and handled by local law enforcement.

    No, I don’t work for a dealer. Nor am I trying to be an apologist for the shady bunch. Lord knows I have told a few bad dealers where to stick it. All I am trying to do is point out the fallacy that it is a dealer who is lending money, and thus obligated to be regulated. If the point of the legislation was more than consumer protection from shifty lending practices (my understanding was finance was the focus) then, yes they got off when they shouldn’t.

    • oldwiz65 says:

      Actually some bottom feeder dealers do “lend” money – you pay by the week directly to the dealer.

  11. Mr Fife says:

    Classic example of “equal justice under the law”, American style.

  12. JustLurking says:

    Actually, the official term for senior citizens in the auto industry, aka Mercury Grand Marquis customers, is “Exit-Level Buyers.”

    No joke. As in exiting the market. As in the opposite of “Entry-Level Buyers.”