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Financial reform bill moves to Senate floor; dealers urged to contact their senators to support Brownback amendment to exempt dealers

November 10, 2010
Debate on the Senate version of financial reform legislation began April 29, after three days in which Republican Senators stood united to filibuster the bill.

Senate officials expect about two weeks of votes on amendments that could change the bill in substantial ways. One amendment, sponsored by Sen. Sam Brownback (R-Kan.), would exempt dealers from increased regulations of the bill’s proposed oversight agency, the Bureau of Consumer Financial Protection. The BCFP would have power to police transactions between institutions that provide financial services and their customers.

Some Democrats contend that Senate Bill 3217 is not tough enough on Wall Street, while several Republicans have expressed concerns about overregulation that could stifle the economy. Critics are focusing their objections on the proposed BCFP, contending that unintended circumstances could ensnare small business people such as auto dealers for merely extending credit to their customers.

The House approved its version of a financial regulatory overhaul in December, and any legislation adopted by the Senate would have to be reconciled with that measure. Dealerships were exempted from the reaches of the House’s proposed Consumer Financial Protection Agency, and the Brownback amendment would exempt dealers from the BCFP in the Senate bill.

Dealers are urged to contact their senators to support the Brownback amendment, including Illinois Sens. Dick Durbin and Roland Burris, and Indiana Sens. Evan Bayh and Richard Lugar.

Brownback said that over-regulating auto dealers, imposing new fees and other burdens will have "unintended consequences" of curbing access to credit for middle-class families that need to buy a car or truck to get to work.

Rob Paddor, who owns Evanston Subaru, attended a dealer event in Washington, D.C., April 26, and he met with Durbin and Brownback and aides of Burris.

Durbin, the Senate’s second ranking Democrat, listened to Paddor’s arguments, but insisted there should be no "carve outs" from regulation under the financial reform package.

Dealers counter that they, like other financial institutions, already are subject to extensive federal regulation, among them the Equal Credit Opportunity Act, Truth-in-Lending Act, Federal Consumer Leasing Act, Fair Credit Reporting Act, and the Federal Trade Commission Act. And unlike many banks, dealers also are subject to the full range of state consumer protection statutes.

David Sloan and Peter Sander, presidents of the CATA and the Illinois Automobile Dealers Association, respectively, joined Paddor on Capitol Hill and met with aides of Durbin and Burris.

 

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