Despite the Pentagon's and two lender associations’ opposition to the Brownback amendment, the National Automobile Dealers Association continued its campaign to build support for the amendment that would exempt dealers from the authority of the financial reform bill, S. 3217.
The bill, championed by Sen. Christopher Dodd (D-Conn.), would create the Bureau of Consumer Financial Protection, which would have oversight over most financial products, including dealer-assisted financing. The Senate is expected to finish drafting the bill by Thursday night.
Sen. Sam Brownback (R-Kan.), author of the amendment, sent a letter Friday to Under Secretary of Defense Clifford Stanley asking him to clarify the Defense Department's objection to the Brownback amendment, according to the Dow Jones Newswires. Brownback specifically asked Stanley to provide additional information and explanation backing up statements Stanley made in a February letter supporting the inclusion of auto dealers in the new consumer protection bureau.
The letter also appears largely aimed at addressing the argument made by the White House and other advocates that predatory auto financing is a serious problem for the military.
The NADA said the Independent Community Bankers Association and the Credit Union National Association’s opposition to the amendment is an attempt to reduce competition from dealers.
“Local banks and credit unions are simply trying to cut out their competition so they can corner the market on auto loans,” says David Regan, the NADA’s vice president of legislative affairs. “Dealer-assisted financing is pro-consumer and pro-competition. Auto dealers can meet or beat the rates offered by banks and credit unions every day because dealer-assisted financing requires lenders to compete for a consumer’s business."