NADA Objects Financial-Protection Legislation

Obama administration's plan to create a consumer financial-protection agency has made the National Automobile Dealers Association (NADA) object the idea. In its current state, the legislation proposed by Rep. Barney Frank does not apply to auto dealers, accountants and lawyers, but NADA says the auto dealers exemption from the law is not specified clearly enough, Autonews reported.

According to NADA, the bill refers only to car brokers. The association says that despite the fact that the bill may does not exempt any transactions involving financing, adding that about 94 percent of the sales include some type of financing.

"In light of the current credit crisis and the lowest auto sales in a generation, a dramatic restructuring of the laws governing auto finance would create uncertainties, unintended consequences and increase consumer costs that could further depress sales,” David Regan, NADA's vice president was quoted as saying by the source.

NADA says that in the absence of any clear exclusion for dealers, it will have to oppose "the bill as currently drafted and support alternative amendments.”

“The retail auto industry, whose lifeblood is access to affordable credit, was a victim of last year's economic crash, not a contributor to it,”

The bill is however supported by the Consumer Federation of America. The body claims the dealer financing should be regulated because they have a tendency to extend loans to minority customers. NADA replies by saying their loans are regulated under the rules of the Federal Reserve, the states and the Federal Trade Commission.