House spending bill contains block on FTC car dealer rule

The U.S. House Appropriations Committee on July 13 backed a $70.28 billion government spending bill containing language blocking the Federal Trade Commission from enacting or enforcing its proposed new rules for auto dealerships.

The 34 to 26 vote supports language that bars the FTC from "implementing and enforcing the burdensome Motor Vehicle Dealers Trade Regulation rule," according to a Financial Services and General Government Subcommittee summary shared by the committee July 13.

In June 2022, the FTC proposed requiring expanded disclosure and consent on finance-and-insurance products and physical accessories "not provided to the consumer or installed on the vehicle by the motor vehicle manufacturer." The agency also is considering cracking down on dealerships' statements related to the cost or financing of a vehicle itself, seeking to curtail bait-and-switch pricing and lower monthly payments that mask higher overall cost to a consumer.

Following the close of a public comment period last year, the FTC has taken no further action on these plans.

The House bill states none of the money it appropriates for the FTC "may be used to finalize, implement or enforce" the proposed rule cracking down on auto retail.

An FTC spokesperson said July 14 the agency had no comment.

"We are encouraged that today's Committee action will help ensure data-driven rulemaking that includes critical stakeholder input and consumer testing," National Automobile Dealers Association CEO Mike Stanton said in a statement July 14.

In a press release, NADA said the language wouldn't prevent the FTC from starting over at the more preliminary stage of an "advance notice of proposed rulemaking" on auto dealers, a step the FTC skipped with its current plan to regulate the industry.

The Financial Services and General Government Subcommittee, which considered the spending bill ahead of the full House committee, supported language blocking the FTC in the version it passed on to the larger body June 22.

The Senate Appropriations Committee included no such restriction on the FTC when it approved its own $41.2 billion financial services and general government funding bill, 29 to 0, on July 13, even though the Senate version shares at least two unrelated checks on the FTC found in the House bill.

"Congress must slow down the proposed 'Vehicle Shopping Rule' to protect consumers and small business dealers from a flawed proposed rule that would needlessly impose significant burdens and costs," an issue brief posted on the NADA website states.