The Pentagon and the nation’s auto dealers have squared off over the Obama administration’s financial reform package which, among other things, would force dealers who provide financing for the cars they sell to follow the same rules that banks are subjected to. It’s a good idea because there have apparently been some abuses — including those targeting military servicemen — but the car dealers are furiously opposed.
It doesn’t matter that the trigger for the overhaul was the financial meltdown of 2008-09, which car dealers had nothing to do with but was caused by irresponsible home mortgage lending. Nor does matter if the majority of car dealers who would be affected by the heightened oversight are straight shooters — not the unsavory characters who prey on servicemen and others without great credit ratings by engaging in “bait and switch” and other predatory lending practices that greatly inflate monthly auto payments.
But even if there are only a “few” bad apples among the 18,000 car dealers in America, it doesn’t mean that rules protecting all consumers against them are a bad idea. If the rules drive those people out of the financing business (which contribute considerably to most dealers’ bottom lines), or completely out of the auto business, so much the better.
The House version of the financial reform bill has exempted the car dealers; a Senate bill, which as of now would include them, is due for a vote this week. For the sake of hundreds of thousands of servicemen and other low-end customers who have been victimized by unscrupulous dealers, we hope the Senate version prevails.