By Silla Brush - 03/29/10 08:56 PM EDT
The Obama administration is trading sharp words with auto dealers over a new proposal to create a consumer financial protection office.
The administration backs a new agency with broad rulemaking and enforcement powers for consumer products, like home loans and credit cards. Auto dealers have lobbied heavily against the consumer agency, arguing that they were not responsible for the financial crisis and should not fall under the new office.
Last week, the White House and Treasury Department push was joined by the Defense Department in a public meeting with military associations. They targeted auto dealers for "abusive" lending practices and said a new Consumer Financial Protection Agency (CFPA) is necessary to rein in auto delaers that lend money for purchases.
The National Automobile Dealers Association (NADA) pushed back strongly on the new White House campaign.
“The U.S. government saying that those who sell cars and trucks are
‘preying on’ our men and women in uniform is akin to calling dealers
unpatriotic and we find that blatantly offensive," said Bailey Wood,
spokesman for the National Automobile Dealers Association (NADA). "We
sure didn’t need the CFPA to win World War II, yet to DoD is claiming
that a super-agency is necessary for ‘military readiness’. Give me a
The Defense Department said the agency would help protect members of the military.
"Since auto financing represents the most significant financial obligation for the majority of service members, particularly in the junior enlisted grades, we believe the intervention of the CFPA in overseeing auto financing and sales for service members will help protect them and will assist us in reducing the concerns they have over their financial well-being," said Clifford Stanley, undersecretary of Defense for personnel and readiness.