Auto Dealers' Lobbying Money well spent...they are exempt from Consumer Protection Agency

WASHINGTON (AP) -- In the end, the political clout of 18,000 auto dealers scattered nationwide was too much even for President Barack Obama.

House and Senate negotiators putting final shape to a sweeping overhaul of Wall Street regulations all but agreed Tuesday to exclude auto dealers from the oversight of a consumer financial protection bureau.

"The political reality is that those of us who have fought against an auto dealer carve-out can't prevail," Representative Luis Gutierrez, D-Ill.

The House bill approved last December contained an exemption for auto dealers, among others, from lending regulations issued by the proposed consumer agency. The Senate did not, but the sentiment was there. In a 60-30 nonbinding vote last month, senators called for the auto dealer loophole.

Under a compromise offered by Senate Democrats Tuesday, auto dealers would still be covered by federal truth-in-lending rules that would have to conform to regulations adopted by the consumer agency.

The Federal Reserve, which oversees truth-in-lending regulations, could adopt different rules but would have to explain its decision. At the same time, the Federal Trade Commission would be given authority to write new rules for auto dealers under accelerated procedures.

But the bottom line would be that auto dealers would be exempt from direct supervision by the consumer financial protection bureau. The exclusion would not apply to auto dealers that provide their own financing, such as Carmax, or to giant auto lender GMAC.

Auto dealers have used their high visibility in their local communities to fight inclusion in the bill. They say they only process the loans and then turn them over to other lending institutions to administer and service.

The National Auto Dealers Association continued to press for the House exclusion, objecting to the Senate proposal's requirement that the Fed's truth-in-lending rules hew to those issued by the consumer agency and that the FTC be given the authority to write auto dealer rules on a fast track.

The discussion on excluding auto dealers is one of many negotiations under way in a joint House-Senate panel that is working out differences between the House and Senate bills.
Auto dealers win
 

Due to a lack of lobbying, this will be the single

industry group subject to the

Consumer Protection Agency