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Raleigh, NC 27615
Phone:  (919) 981-4475
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Auto Dealers Could See New Financial Regulations

The Battle For Reform is Not Over

The USA Today reported today on possible new financial regulations for auto dealers. Although the exemption to the new financial reform legislation unfortunately passed in the Senate, the battle is not over, as “Congress on Thursday began working on a final version of sweeping financial reform legislation that could subject auto dealerships to regulation by a new consumer financial protection agency. If the measure survives, dealers’ F&I (finance and insurance) staff would be regulated like bankers and mortgage brokers.”

Auto dealer claims that they “are not banks” is simply disingenuous. Whether they directly provide financing by way of “buy here-pay here” deals or whether they agree to allow customers to purchase their vehicles in installments under “retail installment sales contracts”, auto dealers play a huge role (sometimes the only role) in determining whether and how a customer is ultimately allowed to drive off the lot with a vehicle. Make no mistake, dealers have a financial incentive to keep this regulation from impacting them, and the fact that they are fighting this hard to keep themselves exempted from reform is an indicator of what is at stake for them.