By Sam Youngman - 05/12/10 06:54 PM EDT
Obama issued a statement Wednesday that said the Senate should vote against the proposed auto dealer and lender carve-out in the reform package.
The proposal would allow lenders to “inflate rates, insert
hidden fees into the fine print of paperwork and include expensive add-ons that
catch purchasers by surprise.”
Obama cast the measure as an effort to protect special interests and weaken consumer protections.
The president said the proposed carve-out would undermine strong consumer protections with a “special loophole” for auto dealers and lenders.
“We simply cannot let lobbyist-inspired loopholes and special carve-outs weaken real reform that will empower American families,” Obama said.
Obama’s statement marks the second time in the debate the president has called on the Senate to defeat an amendment without directly threatening to veto the legislation.
Sen. Sam Brownback (R-Kan.) is the main sponsor of the measure.
A spokesman for the auto dealers insisted the amendment would help consumers by preserving affordable and convenient, dealer-assisted financing.
"Auto dealers, using their relationships with numerous lenders, are able to help the 9 million ‘unbanked’ but creditworthy families secure a loan to purchase a car," said Bailey Wood, a spokesman for the National Automobile Dealers Association.
He said the Senate bill, without an amendment, would put families at risk of losing access to auto credit, or would at least force them to pay a higher interest rate.
“Auto loans and leases are more affordable for consumers because dealers force lenders to compete for our customer’s business," Wood said. "Adding burdensome and expensive regulations on Main Street auto dealers will only make it harder and more costly for a family to buy a car.”
This story was posted at 1:37 p.m. and updated at 2:54 p.m.