Dealers should be wary of an agency given more authority over dealer-assisted loans

Article by Christian Andrei, on May 23, 2011

Dealership advocates said that even if the dealers had been granted an exemption last year from more stringent federal oversight of consumer financing, they should still be cautious of an agency that has more authority over dealer-assisted loans.

As part of the government agency revamp, the U.S. Federal Trade Commission got streamlined rule-writing authority. This means that the agency has an easier time of establishing standards.

Last April, the FTC started to gather dealership-finance information in a roundtable composed of dealer advocates, consumer activists and state regulators. Consumer activists asked for a flat fee to replace interest-rate markups on car loans.

Meanwhile, others aimed for an improved FTC enforcement of government ban against dealer abuses. Several dealer advocates expressed their worries that that those requests might be granted. Dave Robertson, executive director of the Association of Finance & Insurance Professionals, said that the worst-case scenario would be that the apprehensions would lead to more regulation.

The FTC has yet to disclose its intent but Robertson is concerned that the commission will suggest flat fees instead of rate markups. Robertson added that possible FTC proposals may include a flat fee of $100 to $150 a transaction or a ceiling on interest rates.

The National Automobile Dealers Association couldn’t be sure of what will happen to the commission. NADA spokesman Bailey Wood said that it’s better to ask FTC directly; however FTC lawyer Ronald Isaac said that no decisions have been made.

Topics: dealer

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

In Japan, Toyota stays in the limelight by always cooking up something new for its famous 86 sports car. A colour orange Toyota 86 performance edition is one that’s hard...
by - December 4, 2016
Back in 2009, Nissan first introduced the Nissan Leaf, the company’s first all-electric vehicle. LEAF stands for Leading Environmentally-friendly Affordable Family car and this particular EV has been considered as...
by - December 3, 2016
In the minivan segment, the 2017 Chrysler Pacifica is already impressive in terms of fuel economy figures – as rated by the United States Environmental Protection Agency. In fact, the...
by - December 2, 2016
Having a blacked-out Bentley Mulsanne Speed is already menacing by itself but by naming it as the Bamford X, it became all the more imposing. This model was made by...
by - December 2, 2016
We have good news for those who are waiting for the latest version of the Mazda CX-5 compact crossover. It was just unveiled in November at the 2016 Los Angeles...
by - December 2, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries