The US auto dealers associations are decided to resist impeding new rules from federal regulators that would see them unable to change the various rates imposed to customers who take on higher risk loans.
The Consumer Financial Protection Bureau, an office created after America suffered the 2008 -2009 financial crisis, was designed to initially tackle the abuses by mortgage lenders, payday lenders and others that led to the financial crash. Now the regulator also wants to tap the car dealers who modify in-house financing rates.
“The government is trying to take away a customer’s right to get a discount,” said Forrest McConnell, chairman of the National Automobile Dealers Association. “The current system saves customers money, period.”
“The extension of our oversight to the nonbank auto lending companies would also allow us to protect consumers better against the silent pickpocket of discrimination,” said Richard Cordray, CFPB director.
US buyers had last year 17.2 million car loans, worth $863 billion, according to the CFPB, which aims to extend its control over both dealers and bigger auto lenders, such as Ally Financial. The CFPB has said that certain auto dealers marking up some rates artificially to get better earnings out of certain borrowers, while the association’s leader says the flexible borrowing rates allow the country’s 17,600 dealers to offer better deals on certain makes and models to buyers.