By Jim Kuhnhenn, Associated Press Writer
WASHINGTON (AP) — The nation's 18,000 auto dealers are trying to cut themselves a deal in the Senate, seeking exemption from proposed consumer regulations that would police how they write car loans.
The Obama administration is pushing back, using the Pentagon to make the case that soldiers are particularly vulnerable to high interest car loan schemes.
"No one counts the car dealers out," said Ed Mierzwinski, consumer program director at U.S. PIRG, a consumer advocacy group. "The car dealers are like the small banks — they are everywhere."
The dealers argue that when it comes to lending to car buyers, they are mere intermediaries for financial institutions that ultimately process and service the loans.
In waging this fight, they stand between the president and the success of a vast rewrite of financial regulations that Obama is determined to sign into law. A House version of the bill already excludes auto dealers from new consumer financial rules. By standing firm now, the administration hopes the Senate version prevails.
The debate over a special carve out for auto dealers, who have a high visibility in their local communities, comes as Senate Majority Leader Harry Reid, D-Nev., seeks to wrap up debate over the broader regulatory overhaul later this week. Reid planned to seek a vote to end debate on Wednesday, which would require 60 votes to pass. If successful, the Senate would have until Friday to dispatch remaining issues.
Beside the auto dealers' exception, senators must still work out differences over how to regulate complex securities known as derivatives and decide whether to toughen provisions in the bill that would restrict the ability of banks to engage in speculative trades with their own accounts.