RVDA Working with Allies to Protect Dealer-Assisted Financing
Edited by Phil Ingrassia, CAE
RVDA’s Director of Legal and Regulatory
Affairs Brett Richardson attended an important Federal Trade Commission
(FTC) motor vehicle financing roundtable in Washington, DC, on Nov.
17. RVDA is closely following new any federal regulations that
could impact dealer-assisted financing. The FTC public meetings
are billed as a fact-finding investigation into dealer lending
The FTC received enhanced
powers to regulate dealership financing, which was the unfortunate
tradeoff from dealers being exempt from oversight by the very powerful
new Consumer Financial Protection Bureau (CFPB). The FTC is
under great pressure from consumer groups, who fought to keep motor
vehicle dealers under CFPB oversight, to add additional layers of
regulations on dealership financing.
The latest roundtable was
of particular importance to RV dealers since it focused on core aspects
of motor vehicle financing. RVDA and other dealer groups,
including NADA, firmly believe that consumers have adequate protections
right now and adding additional regulatory barriers to vehicle financing
will hurt the RV industry and the overall economy.
major area of concern for RV dealers is the FTC’s investigation
into how dealership F&I departments generate revenue by marking up
lender wholesale rates. Consumer groups argue that dealers are
not providing consumers with the lowest possible rates since the
dealership has flexibility to markup the lender’s wholesale rate.
RVDA and its allies believe that these wholesale rates are just
that – rates only available at wholesale – and that even
with a dealership markup added, these rates are still competitive with
loans the consumer would be offered at other lending
Many of the
consumer panelists cited anecdotal examples of problems they have seen
in vehicle sales transactions, but were unable to provide any of the
requested documentation to establish that the alleged incident is a
prevalent practice by dealers in the industry. RVDA and other
groups say that most of these alleged practices are already illegal
under state and or federal law, and enforcement was needed rather than
new layers of regulations.
Rate markups are likely to be
a priority for the newly created Consumer Finance Protection Bureau
(CFPB) since mortgage broker participation in mortgage loans is claimed
to be discriminatory and abusive.
its allies are deeply concerned that the CFPB will indirectly regulate
dealership compensation by pushing to establish a flat rate
reimbursement policy on the banks it oversees. In return, these banks
may be limited to compensating dealers with a flat rate for the
transaction, rather than a percentage of the loan. Another possible
scenario is that the FTC may conduct a joint rulemaking with the CFBP
that would directly regulate both banks and dealerships in one large
federal rulemaking on loan markups.
can dealers help RVDA protect dealer-assisted
Get involved. Let us know how regulatory roadblocks
to dealer-assisted financing could impact your dealership and your
customers. Pass along this information to dealers you know through your
state and local associations, 20 Groups, and other meeting you have. We
must stay united on this issue. RVDA will send all members an update on
this issue this week.
Support RVDA advocacy efforts with a financial
contribution. Help RVDA build adequate resources to fight
any regulatory assault on dealer-assisted financing through making a
contribution to RVDA’s advocacy fund. Click Here to make a contribution, if
you have not contributed already.
will keep you updated on this important issue through e-mail alerts and
RV Executive Today.