MIAMI BEACH, Fla. -- Texas dealer Robert Turner gave Patrice Ficklin, fair lending director at the Consumer Financial Protection Bureau, a piece of his mind following her presentation Tuesday evening at the annual National Association of Minority Automobile Dealers conference here.
She took the criticism and responded.
Turner, who owns two Chevrolet dealerships and a Subaru store, told the CFPB official: “You guys have your view of what we do; I would hope at some point you’d talk to some of us and get our view of what we do.”
The CFPB, by law, has oversight over lenders but not dealers. The bureau has recommended that banks, captive finance companies and other indirect auto lenders take steps to ensure they are operating in compliance with the Equal Credit Opportunity Act.
Wholesale vs. retail
Tuesday’s presentation was the second year in a row that Ficklin has addressed dealers at NAMAD’s annual conference.
Many dealers, such as Turner, believe the agency, which celebrates its fifth anniversary on Thursday, is out to get them.
As his dealer colleagues listened intently, Turner went on to ask Ficklin whether she realizes that dealers earn their margin rates from financial institutions the same way “banks earn that discount rate that the feds give them” and that a consumer’s finance rate is not the rate the dealer gets.
He said every business buys goods at a wholesale price and sells them at a retail price -- that is where the disparity lies.
Take chickens, for example, he said.
Grocery stores buy those birds for wholesale prices and then mark up their retail prices to cover overhead expenses, he said.