When Congress returns to work this month, members of the House and Senate will try to hammer out differences in the landmark financial services overhaul legislation.
The House version contains an exemption for car dealers. A former car dealer – now a congressman from Irvine – says the compromise version should also include that exemption.
The issue is whether a proposed consumer protection agency will regulate auto dealers – and require them to register.
Republican Congressman John Campbell of Irvine, a 25-year veteran of the car business, wrote an amendment to the House version that would exempt most of the nation’s 17,000 dealerships. "If the dealer loans the money," he says, "then they ought to be covered. But very few car dealers loan money. What most car dealers do is they simply connect the customer who’s buying the car with some financial institution."
Like a car manufacturer’s financing arm, or local credit unions. The White House and consumer groups oppose the exemption. They say car dealers act like mortgage brokers, negotiating the loans even if they don’t directly finance the purchase.