To the Editor:
Senator Charles Grassley helped Iowa's and all car buyers when he voted on the Wall Street reform bill. Iowans who will finance their next car purchase should appreciate that. Senator Grassley was one of four Republicans who joined with Senate Democrats to pass the Wall Street reform bill. Then to help keep car loans available and affordable, he joined with 59 other senators from both parties to vote that the House-Senate committee that is writing the final bill to not include auto dealers in the final bill. Why is this important? Two points; First, virtually every loan an auto dealer arranges for their customers is a bank loan that would already be regulated. Second, most auto dealers actively look for competitive lenders to help get the best deal for their customers. After all, most consumers will buy where they get the best overall deal and we save the consumer money.
Senator Harkin voted no to exclude car dealers. He's on the committee that is writing the final bill. Please call him and ask him to change his stance on not excluding auto dealers from the final bill.
Senator Grassley understands that Iowa's automobile dealers did not cause the financial problems meant to be regulated by new legislation. It really is this simple: most car dealers help their customers find a car loan - they don't lend the money or service the loan. Car dealers don't decide who gets rejected and who gets financed; banks and other lenders who are subject to the new regulations do that. Besides, every consumer can check their own sources for financing to compare with what we dealers offer them. There's a reason that an estimated 80% of auto loans are assisted by dealers.
100% of car loans are covered by the protections of the new bill because the banks and other lenders who actually fund the loans and make the credit-worthiness decisions would be under the jurisdiction of the proposed Consumer Financial Protection Agency.
The opponents of excluding auto dealers find rare instances of illegal actions by unscrupulous auto dealers. I agree with Senator Grassley that there is no place for that kind of behavior in the car business. It is already illegal, and dealer-assisted financing is already effectively regulated at both the federal and state level. Enforcement of existing consumer protection laws against the bad actors instead of another layer of federal regulation is the right answer.
President of the Birdnow Dealerships