Should auto dealers, who write tens of billions of dollars in auto lending contracts each year, evade regulation by the nation’s leading agency for policing consumer financing?
US Senator Elizabeth Warren recently made it clear that she thinks the answer is NO. While questioning Richard Cordray, Director of the Consumer Financial Protection Bureau, who was testifying before the US Senate Banking Committee, Sen. Warren offered this opinion:
“As you know, the CFPB has authority over nearly every kind of consumer loan, but the big exception is car loans. The CFPB has done great work in this area [focusing on lenders, but not dealers]…But it makes no sense to me that there should be any exception here for consumers who are being tricked out of billions of dollars every year on car loans.”
Sen. Warren conceived of the idea of an independent consumer financial watchdog agency, and worked hard to make it a reality. During the debate over whether to include auto dealers, they misled members of Congress and the public, repeatedly claiming they are “Main Street, not Wall Street.”
However, the reality is quite different. Hundreds of dealerships are owned by large, publicly traded dealership groups that are publicly traded and sold on Wall Street. For example, AutoNation, based in Florida, owns 221 dealerships across the U.S. and took in over $15.6 billion last year. AutoNation’s largest investor is Bill Gates.
Does anyone seriously believe that fits the description of “Main Street”?
Read more: Warren: Close CFPB’s dealer ‘loophole’