NADA Applauds House Appropriations Committee Passage of Legislation to Stop FTC’s Flawed “Vehicle Shopping Rule”
WASHINGTON (July 14, 2023)—The National Automobile Dealers Association (NADA) applauds the July 13 passage of the Fiscal Year 2024 Financial Services and General Government appropriations bill by the House of Representatives Appropriations Committee. Included in the bill is a provision, under Title V of the bill (Sec. 530), which would stop the Federal Trade Commission (FTC) from finalizing, implementing, or enforcing its proposed “Motor Vehicle Dealers Trade Regulation Rule” (also known as the “Vehicle Shopping Rule”), which would complicate vehicle sales and harm consumers. Enactment of this provision does not affect the FTC’s ability to enforce existing law or prevent the FTC from proposing an advance notice of proposed rulemaking (ANPRM) in the future.
“We greatly appreciate Financial Services and General Government Subcommittee Chair Steve Womack’s leadership and the Committee’s support in advancing this legislation by providing the FTC with the opportunity to revisit their ill-conceived ‘Vehicle Shopping Rule,’” said NADA President and CEO Mike Stanton.
The proposed “Vehicle Shopping Rule,” released in July 2022, would require an extensive series of unnecessary written and oral disclosures when communicating with consumers related to the vehicle sales price, certain credit terms, and voluntary protection products (VPPs).
The additional disclosures required under the proposed rule would overwhelm car buyers and small businesses with additional paperwork lengthening the car buying process, while costing businesses hundreds of millions of dollars.
A recent study by the Center for Automotive Research (CAR) found that “[w]hile the FTC estimates the proposed rule will generate USD 29.7 billion in net consumer benefit over a ten-year period…, CAR’s analysis reveals that the proposed rule would actually cost consumers USD 38.1 billion over those same ten years.” CAR’s study also found that “an additional 2 hours would be required to successfully complete a typical transaction” under the FTC’s proposed rule.
“This flawed rule would not only upend the sales process for consumers and small businesses, the data the FTC relies upon to support its rule is either unverified, previously rebutted, anecdotal, or non-existent,” added Stanton. “We are encouraged that today’s Committee action will help ensure data-driven rulemaking that includes critical stakeholder input and consumer testing.”