Although dealers won an exemption last year from tougher federal oversight of consumer financing, they still should be wary of an agency given somewhat more authority over dealer-assisted loans, dealership advocates said.
As part of a sweeping regulatory overhaul, the U.S. Federal Trade Commission got streamlined rule-writing authority, making it easier for the agency to set standards.
Last month the FTC began collecting dealership-finance information in a roundtable with dealer advocates, consumer activists and state regulators.
Consumer activists called for a flat fee to replace interest-rate markups on car loans. Others sought beefed-up FTC enforcement of government prohibitions against dealer abuses.
Some dealer advocates voiced apprehension that those requests might be granted.
"In a worst-case scenario, wives' tales being accepted as fact could lead to more regulation," said Dave Robertson, executive director of the Association of Finance & Insurance Professionals.
The FTC hasn't tipped its hand as to its intent. But Robertson suspects the commission will propose flat fees in lieu of rate markups.
"There will be a lot of kudos for people who slayed that dragon," he said, referring to the markups. "Unfortunately, it's not a dragon."
Possible FTC proposals might include a flat fee of perhaps $100 to $150 a transaction or a ceiling on interest rates, Robertson said.
The National Automobile Dealers Association was less certain about the commission's path.
"We don't know what the FTC is going to do," NADA spokesman Bailey Wood said. "The question is better directed at them."
FTC lawyer Ronald Isaac said: "We haven't made any decisions."
The commission is particularly interested in "data and empirical evidence," the FTC said in its March announcement of a series of roundtables.