President Barack Obama, on May 12, 2010, spoke out against the Brownback Amendment to the pending legislation to protect consumers in the financial industry. The Brownback Amendment would exempt car dealers from coverage under this consumer friendly law. It is important to car dealers because many of them make money on financing. The law, without the Brownback Amendment, would apply to car financing. According to an article posted on the Automotive News website, President Obama said the amendment “encourages misleading sales tactics that hurt American consumers.” The article also notes that the U.S. Treasury, military families, civil-rights groups, the Independent Community Bankers Association and the Credit Union National Association all weigh in against the exemption for car financing. While the National Automotive Dealers Association is urging all of its 17,000 members to “keep up pressure on their senators” to pass the exemption.
Tag Archives: Brownback Amendment
Financial regulation of auto loans is a hot topic this May, 2010. With Congress considering adding consumer protections in the financial industry, the auto dealers got the House of Representatives to pass an exemption from these protections for car dealers and auto lenders. The exception for car financing is now before the Senate, in a bill sponsored by Senator Brownback, Republican for Kansas. The exception would carve out car dealers and car lenders for buyers of new and used cars in the financing portion of the deal. Car dealers and lenders are objecting to these consumer protections saying it is unfair to them to be included in the financial protections afforded consumers in other areas of consumer finance. The legislative amendment, called the Brownback Amendment, is before Congress right now, May 2010, for a vote. Consumer protection agencies and even the Pentagon is endorsing the added protections because of the abuses found in car financing. In the May 11, 2010, article by Gary Rivlin in the New York Times, he describes the Pentagon’s position is that these bad deals that many service members get are distractions “that could affect the readiness of the armed forces,” stating that low-income military people “are victimized in large numbers by shady car dealers that set up shop just outside many bases.” The article is available online at http://www.nytimes.com/2010/05/12/business/12dealers.html?th&emc=th.