White House opposes auto dealer carveout to save trading ban

The White House is opposed to exempting auto dealers from new consumer regulations, even if doing so would ease passage of a strong ban on banks' proprietary trading.

Because of the procedural order of amendments to the sprawling Wall Street overhaul bill, the Senate would need to approve the auto dealer carveout for the proprietary trading ban, sponsored by Sens. Jeff Merkley (D-Ore.) and Carl Levin (D-Mich.), to pass. 

The Senate would need to first pass the Merkley-Levin amendment and then approve the auto dealer carveout, backed by Sen. Sam Brownback (R-Kan.).

The White House, Defense Department and consumer advocacy groups have strongly urged Congress not to exempt auto dealers from a new consumer financial protection office.

"We support the Merkley-Levin amendment, but we must not sacrifice protections for American families against unscrupulous auto lending practices to pass Merkley-Levin as attached to the Brownback amendment when the Dodd bill already provides strong protection against excessive risk-taking by banks," an administration official said Thursday.