DoD Enters Consumer Agency Fray
You know the fight for financial reform has truly hit a fever pitch when the Defense Department, the monolith of the US government, has entered the ring. Not to be outdone by auto-industry lobbyists, the Pentagon has begun to lobby the Senate banking committee to convince them, including chairman Sen. Chris Dodd (D-Conn.), that any new consumer-protection agency should oversee auto dealers as well as banks and non-banking companies like subprime mortgage lenders, Politico reports. The DoD insists that any new consumer agency regulate dealers due to numerous reports of car salesmen preying on members of the military—a tactic Mother Jones' own Stephanie Mencimer reported in detail on last summer. And because the House's version of financial-reform exempted auto dealers from a consumer agency's oversight, the DoD is pushing hard to make sure the Senate doesn't include the same loophole.
The Pentagon's push came most notably in a February 26 letter from Clifford Stanley, an undersecretary of defense, citing auto dealers' "unscrupulous" practices toward members of the military. A consumer advocate added, "Predatory lending affects our military preparedness...It explains that this is not just some liberal position." A spokesman from the National Automotive Dealers Association told Politico that the practices decried by the DoD are already outlawed, and that a new consumer agency would only increase bureaucratic bloat in Washington. "Creating new regulatory mandates on top of existing federal and state statutes will likely drive up costs, limit vehicle financing options and, for many consumers including service members, effectively eliminate their ability to obtain financing to meet their vehicle need," the spokesman said.