Alexandria, VA — The American International Auto Dealers Association (AIADA) applauded the passage of an amendment sponsored by Rep. John Campbell (R-Calif.), to H.R. 3126, to The Consumer Financial Protection Agency Act of 2009. The amendment exempts dealerships from oversight by the proposed Consumer Financial Protect Agency (CFPA).

If established, the CFPA would be the primary regulatory body for America's financial institutions. Rep. Campbell added the amendment to the House of Representative's version of the bill in order to protect auto dealerships from burdensome new oversight designed for large financial institutions. AIADA supports consumer protections as a component to financial reform, but believes small businesses, like dealerships, should not be subject to the same scrutiny as mammoth financial organizations.

"There are already effective safeguards in place, like the Federal Trade Commission, the Federal Reserve, and fifty States Attorney Generals to regulate the sales of motor vehicles and protect consumers," said AIADA president Cody Lusk. "We are pleased that the Committee recognized dealerships are not banks, and should not be subject to the same regulation. We hope that the Senate will accept the same logic, and look forward to working on the bill as it proceeds through the legislative process without the inclusion of dealerships."

Because of the competitive nature of the automobile retailing industry, dealers often provide consumer incentives through sales and financing options for their customers. Subjecting dealers to the CFPA's oversight would essentially remove the competitive market forces that help determine conditions and terms of auto financing. Without competition, both consumers and dealers would suffer.