WASHINGTON -- Dealers will ultimately prevail in Congress on legislation to exclude dealers from regulation by a proposed new consumer agency, a stock analyst predicted.
The Senate voted yesterday to recommend that a conference committee of Senate and House leaders exempt dealerships assisting on customer loans. The proposed new agency would have oversight of financial products for consumers such as mortgages and credit and debit cards.
“Based on today's vote, we would expect the final bill to exclude dealers from further federal regulation,” Matthew Nemer, a senior analyst at Wells Fargo Securities, wrote yesterday.
The non-binding Senate vote was 60-30.
A conference of Senate and House leaders will meet in the weeks ahead to try to reconcile differences in the bills that passed both chambers.The House bill contains an exemption for dealers, while the Senate measure does not.
The National Automobile Dealers Association said it plans to continue its grassroots lobbying of conference members.
“NADA, dealers and their employees will continue to make the case through phone calls, letters, emails and meetings with both the House and Senate conferees that dealers do not underwrite, fund or service auto loans and should not be in a Wall Street reform bill,” NADA spokesman Bailey Wood said.
Dealer groups prevailed in the Senate vote over opposition from President Barack Obama, the Pentagon, and groups representing military families, consumers, banks and civil rights activists.
“Dealers lied to Congress by saying they don't do financing and just assist consumers to get the best terms,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety in Sacramento, Calif. “That's ridiculous and absurd. They're scared to death they might actually be regulated by an entity on the side of consumers.”
Shahan declined to say whether her group, or other opponents of the dealer exemption, would lobby conference committee members.
Both bills would subject financial institutions that provide credit, as well as “buy here/pay here” dealerships that offer their own financing, to oversight by a new consumer financial-protection agency.
House leaders have said they expect the bill that emerges from conference committee to end up before the president by July 4.
Obama has pushed hard for the overall legislation while opposing the dealer exemption.