The Dodd-Frank Wall Street Reform legislation (H.R. 4173) includes language that preserves dealer-assisted financing, which will continue to provide more convenience, more competition and more choices for car buyers.

Congress strongly supported this bipartisan language, since dealer-assisted financing operates under effective and extensive consumer protection regulations. The final language (Sec. 1029) strengthens consumer protections for car buyers and preserves affordable credit.

The full implementation of the Dodd-Frank legislation will take some time, so the new Bureau of Consumer Financial Protection probably will not be operational for 6 to 12 months.  As the new agency takes shape, the following points are important for dealers and consumers alike.

• Consumers win when they have multiple financing options. Consumers can always rely on their own banking relationships, but dealers’ relationships with numerous lenders and manufacturers’ finance companies allow dealers to arrange financing that regularly meets or beats bank or credit union terms.
• The new bill balances strong consumer protections and affordable auto credit.  Placing another layer of complex and unnecessary regulations on small business dealers, who merely facilitate financing, would unnecessarily result in more expensive credit for consumers attempting to purchase a new vehicle.
• The new Bureau of Consumer Financial Protection will have direct federal oversight over all auto loans. All banks, finance companies, credit unions, and dealerships that directly underwrite, fund, and service auto loans will be regulated.
• The bill expressly protects the full range of federal and state consumer protection laws and regulations that govern dealer-assisted financing.  Dealers’ retail financing activity will continue to be effectively regulated by the Federal Reserve Board, the Federal Trade Commission and 50 state consumer protection agencies.