Feds: Consumer Agency Could Cover Auto Dealers

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It has so far been uncertain whether any proposed consumer protection agency formed as a part of financial regulatory overhaul would cover auto dealers, but that notion has gained a powerful ally.

U.S. Treasury Secretary Tim Geithner came out in favor of auto dealers falling under the jurisdiction of the proposed Consumer Financial Protection Agency, amid complaints that dealers were ripping off members of the military and their families.

If enacted, the CFPA would cover many different kinds of financial services, from mortgages to credit cards. The House version of the CFPA does not cover auto dealers, while the Senate version does.

The armed services have uncovered numerous instances of shady practices by auto dealers, such as hidden fees on loans, discriminatory lending, failure to pay off liens on trade-ins and interest rates that make loans impossible to repay.

Beyond the military, consumer advocates have been citing such practices of some auto dealers for years in hopes of spurring greater oversight of the industry.

The National Automobile Dealers Association opposes the inclusion of its members, saying that new regulations would drive up costs and limit financing options for consumers.

Crackdown Sought in Auto Dealer Rip-Offs of Troops (Detroit Free Press)

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