Yesterday, President Obama called on the senate to reject a proposed exemption for auto dealers in the financial reform bill (S.B. 3217) and, in doing so, indirectly attacked our interests as boat dealers in this critical legislation.
Obamas statement read: Throughout the debate on Wall Street reform, I have urged members of the senate to fight the efforts of special interests and their lobbyists to weaken consumer protections. An amendment the senate will soon consider would do exactly that, undermining strong consumer protections with a special loophole for auto dealer-lenders.
The reference is, of course, to the amendment proposed by Sen. Sam Brownback, R-Kansas. It would exempt only auto dealers from the new Bureau of Consumer Financial Protection that will be given extremely broad authority to regulate most financial products, including dealer-assisted financing. You will recall last week I urged all marine dealers to call their senators, asking them to request Sen. Brownback include boat dealers in his proposed amendment.
The latest information indicates the Brownback amendment will include boat dealers and could get voted on sometime today. It appears the National Automobile Dealers Association is standing toe-to-toe with the President on this one, and so should we! Thats because Obama is simply wrong in his assertion that an exemption would allow them (dealers) to inflate rates, insert hidden fees into the fine print of paperwork, and include expensive add-ons that catch purchasers by surprise. The fact is dealer-assisted financing provides an affordable, convenient and competitive source of financing for car, boat, RV and motorcycle purchasers.
More specifically, according to our industrys legislative representatives in Washington, namely NMMAs Mathew Dunn and MRAAs Larry Innis, Sen. Brownback has revised his amendment to reflect provisions hopefully acceptable to Democratic senators. These changes consist of:
Boat and RV dealers will be included in the exemption
Dealers must be predominately engaged instead of primarily engaged is selling motor vehicles to qualify to be exempted
No dealer can claim the exemption if engaged in providing any mortgages, or any financial product or services (i.e. auto title loans, payday lending, or other financial practices that dealers currently do not engage in) unrelated to motor vehicle retailing
That said, however, we cannot assume the Brownback amendment will garner an affirmative vote. Moreover, as I write this (late Wednesday night), we dont know when, or even if, the amendment will come up on todays senate agenda.
So, this morning its still crunch time . . . and its still time, if you havent done it so far, to call your senators from your state and ask them to support the Brownback amendment. It will exempt you as a small business boat dealer from onerous new reporting, accounting and other regulatory requirements as if you were a bank. Simply call the Capitol switchboard at (202) 225-3121 and ask for your senators.