WASHINGTON -- Auto dealers would be exempt from oversight by a new Consumer Financial Protection Agency under a sweeping overhaul of financial regulations passed today by the House.
The 1,279-page bill passed by a 223-202 vote, with no Republicans supporting it.
The legislation backed by the Obama administration now goes to the Senate, where the banking committee has postponed consideration until next month. The measure faces tougher sledding there, with opposition led by Sen. Richard Shelby, R-Ala.
An amendment to subject dealer-assisted financing to some Consumer Financial Protection Agency oversight was introduced by Rep. Melvin Watt, D-N.C., and withdrawn today.
The National Automobile Dealers Association had lobbied against the amendment. Consumer advocates had pressed for dealers to be covered by the new agency.
“It is quite clear that representatives on both sides of the aisle realize that auto dealers were not part of the problem which caused the economic downturn,” said David Westcott, head of NADA's government affairs panel.
Consumer advocates argued that dealers are the biggest target of consumer complaints to state agencies and have been the subject of a number of lawsuits over financing for consumers.
"The House exempting auto dealers from fiscal oversight is just not right," said Consumer Federation of America spokesman Jack Gillis.
"Each year millions of Americans finance their second biggest purchase through car dealers, and these consumers deserve the same protections as those working directly with financial institutions."
The huge bill would expand regulators' authority in the wake of last year's financial meltdown.
Regulators would be empowered to respond to systemic risks, dismantle the riskiest firms, and oversee derivatives.
The legislation also would create the Consumer Financial Protection Agency to supervise subprime mortgages, credit and debit cards, and other financial products for consumers.