“It’s like creating the F.D.A. and then denying it authority over pain relievers.”
From an essay by The New Yorker’s James Surowiecki, who cites studies that reveal all sorts of common underhanded practices that occur at auto dealers—pushing certain lenders on car buyers, sneaking in fees into complicated financing arrangements, and so on. Surowiecki writes:
The system does nothing for the littlest guy of all—the consumer. In giving the dealers their exemption, Congress may have said that it was helping Main Street over Wall Street. But what it was actually doing was putting the dealers’ interest in no oversight ahead of the public’s interest in a fair marketplace. The result is a consumer financial-protection agency that’s prevented from overseeing one of the most common, and most important, financial products that consumers buy.
Financial reform legislation will provide new regulations to oversee mortgages, debit and credit card transactions, student loans, and it’ll create a new consumer financial protection agency.
Because of strong, widespread lobbying efforts by auto dealers, however, one thing the legislation won’t do is help consumers figure out what’s really going when a car salesman asks them to “come into the office and talk to my manager” at the dealership.
Related:
Will the New Consumer Financial Protection Agency Actually Protect Consumers?