It's time regulators take Retail 101

Jim Henry is a special correspondent for Automotive News
During his keynote address at the F&I Conference and Expo in Las Vegas a few weeks ago, incoming 2011 NADA Chairman Stephen Wade reminded the audience of a disturbing fact: All vehicle loans will be subject to the oversight of the Consumer Financial Protection Bureau.

Because dealerships are mostly exempted, it's easy to forget that “Wall Street reform” still very much applies to auto lenders.

What that means in practical terms is still to be determined. The scary part, Wade said, is that outside the auto industry, few understand how auto retailing works. For example, he said it was news to many lawmakers, and even finance industry regulators, that dealers purchase their inventory from the factories.

The burden is on dealers and auto lenders to “educate” regulators, he said.

Dealers should pay attention. What regulators don't know about retailing could hurt dealerships' bottom line.