While carving their turkeys this Thanksgiving, dealers can be thankful franchised new-car dealerships were carved out of the Consumer Financial Protection Bureau's jurisdiction after intense lobbying by the National Automobile Dealers Association.
The value of that carve-out seemed a bit diminished lately. Earlier this year the CFPB started leaning on lenders to micromanage dealership pricing on dealer reserve. It's either that, the bureau said, or lenders should switch to some other form of dealer compensation, such as flat fees or a flat percentage of the amount financed.
Under the circumstances it didn't seem like the carve-out provided much of a buffer between dealerships and the CFPB.
But apparently even that small shield looks too large to some.
Sen. Elizabeth Warren (D-Mass.), the first interim director of the CFPB and an outspoken critic of dealers and the auto finance industry, said in a Senate Banking Committee hearing this month she'd like Congress to overturn the carve-out, which she called a loophole. That way, the CFPB could take direct control of regulating dealerships instead of having to do it via the lenders.
Suddenly, indirect CFPB control doesn't sound so bad.
Now, let's eat.