Auto Dealers Win Support in Senate

WASHINGTON - Despite strong opposition from the White House, the Senate voted Monday to help auto dealers escape oversight from a new consumer watchdog agency, reported The Detroit News. By a 60-30 vote, the Senate approved a nonbinding motion that urges Senate negotiators to exempt auto dealers from the supervision of the proposed Consumer Financial Protection Agency. The agency is a key part of the Obama administration's overall plans to overhaul financial regulations. Both Michigan senators, Carl Levin, D-Detroit, and Debbie Stabenow, D-Lansing, voted against the motion. But many prominent Democrats voted for it, including Senate Majority Leader Harry Reid, D-Nev., and Sen. John Kerry, D-Mass. On Friday, the Senate approved a massive overhaul of the nation's financial system. The overhaul creates a Consumer Financial Protection Agency, whose oversight powers would include auto lending. Auto dealers failed to get a vote on an amendment, proposed by Sen. Sam Brownback, R-Kan., exempting them. But in exchange, the Senate agreed to a vote Monday on his request urging Senate negotiators, who will work with the House in reaching a compromise version of the financial overhaul legislation, to exempt dealers. Auto dealers lobbied Congress for months, and more than 250 dealers were on Capitol Hill last week, attempting to convince undecided senators to exempt them from additional federal oversight. The nation's 18,000 dealers are one of the most politically powerful forces on Capitol Hill. Since 1990, dealers have donated $25 million to members of Congress. A version of the House financial overhaul approved in December exempted the auto dealers. The motion approved Monday urges the Senate to go along with the House version. Negotiators could still opt to keep the Senate language, although Monday's vote will make it more difficult. They want to send a bill to President Barack Obama for his signature by July 4. Sen. Chris Dodd, D-Conn., chairman of the Banking Committee, said after the vote he would oppose adding "carve-outs" and "loopholes" -- a clear reference to the auto dealers provision. Auto dealers contend they weren't responsible for Wall Street excesses and are already heavily regulated by state and federal laws. They argue new onerous regulations could make lending more expensive and prevent some people from getting auto loans. In a letter to the Treasury Department, Clifford Stanley, an undersecretary of Defense, raised concerns about the impact that "unscrupulous practices" of some auto dealers have on military families. The White House says the bill is aimed at bad-apple dealers.