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House and Senate negotiators have apparently agreed to exclude car dealers from regulation under the sweeping reform bill now taking shape in Congress.
The Senate version of the reform bill had no exclusion for car dealers, but the House bill passed last year December did. Under a compromise offered by Senate Democrats yesterday, auto dealers would remain covered by federal truth-in-lending rules, but would escape direct regulatory oversight from the Federal Reserve’s new consumer protection agency.
The exclusion would not apply to auto dealers that provide their own financing, such as giants like GMAC or Carmax. In addition, the Federal Trade Commission will be given the authority to write new rules for auto dealers under accelerated procedures.
The White House had argued against excluding car dealers from oversight, citing that they’re been the source of many consumer complaints. Car dealers countered by saying that they only process car loans and hand them off to lending institutions, so they shouldn’t be scrutinized by the new watchdog agency.
Negotiations are ongoing, but at this point it looks like the car dealers will be successfully put the brakes on oversight.