Senate/ House Conference is Next Step for Dealer Exemption from Finance Reform

Senate/ House Conference is Next Step for Dealer Exemption from Finance Reform

The next step in getting dealer F&I operations exempted from Finance Reform legislation will begin the first part of June when Senate and House conferees are expected to return to Washington and begin hammering out the differences between the bills passed by the Senate and House. As WANADA enthusiastically reported earlier this week, the Senate voted 60 to 30 to accept the Brownback motion to instruct Senate conferees to exempt dealers from Finance Reform so that the Senate input mirrors what came over from the House, which excluded dealers by amendment.

Dealers have reason to be optimistic about the exemption, but NADA is taking no chances. It is urging all its members to remain in contact with their senators to press Senate conferees on the instruction language. NADA notes that instruction to the conferees is not binding and it is not impossible for a House/Senate conference to create a bill out of different Senate and House measures that looks nothing like either of them.

WANADA members, accordingly, are encouraged to stay in touch with Maryland and Virginia senators since all the Democrat Senate conferee appointees voted against excluding dealers because the conference chairmen, Sen. Christopher Dodd (D-Conn) remains convinced that dealers should be covered by Finance Reform. Recall from WANADAs Special Bulletin last week, however, that Maryland Senators Cardin and Mikulski supported the Brownback motion to exclude dealers, and Virginia Senator Mark Warner abstained from the vote. Only Sen. Webb voted against the Brownback motion.

The timetable for the conference, some of which will be televised, calls for the measure to be ready by June 23, with the Senate and House then voting on it by June 26 and the measure on the presidents desk for signature before the July 4th holiday.

The talking points, most of Congress accepts, are the following:

1. Dealers dont extend credit to car buyers, but only arrange it and dont belong in Finance Reform;

2. Dealer assistance in acquiring a car loan is a bona fide value-added benefit that unequivocally gains car buyers the lowest rates on credit;

3. The instances of consumer fraud and consumer complaints over dealership car loan assistance to car buyers is next to none, with the problems of service men and women with car loans being misstated against new car dealers by opponents of the dealers exemption;

4. An abundance of consumer protection laws, with consumer regulators to administer them, exist from the Federal Trade Commission on down to state attorneys general offices and to state motor vehicle agencies; so regulation of dealers by the new BCFP is unnecessary and misdirected simply because dealers are not financial institutions.

You can link directly to Maryland and Virginia senators and representatives by clicking here. You can also contact them by phone by calling the Capitol switchboard at (202) 224-3121. Dealer success on keeping themselves out of Finance Reform is close at hand, so its important that the conference process be monitored which NADA is doing. Any feedback from members of Congress to WANADA dealers would be appreciated. Call Gerard Murphy or John ODonnell at (202)236-4646 or (202) 669-8144, respectively, with any information.

Stay Tuned!