Former Congressman Barney Frank would like to see more regulatory oversight of auto dealers, he told the audience during his keynote address at ABS Vegas, the Structured Finance Industry Group/IMN conference, according to a published report last week. “Dealerships are very popular in their districts,” Frank said. “It’s a misplaced notion that banks have political clout. The political power in Congress comes from people who have natural grassroots networks: Realtors, insurance agents, auto dealers.”
Frank, who co-authored of the Dodd-Frank Wall Street Reform Act, didn’t go so far as to call auto dealers predatory lenders, according to the report, but he said that the “wrong crowd” had managed to end up in the one area exempt from the Consumer Finance Protection Bureau.
In another, Susan Sheffield, executive vice president and treasurer at General Motors Financial Co., said the captive is “preparing for when, and it’s not if, but when,” the CFPB extends oversight to auto dealers. “It’s clear they don’t like having auto dealers as part of the [loan] process,” she said. “We fully expect that once a larger participant rule is confirmed, they’ll be in to visit us in 2015.” Sheffield also said that although GM Financial is fully prepared for the regulatory agency, according to the report, dealing with the CFPB is “just the cost of doing business today.”
