Hit the brakes

Legislation creating a new agency with broad powers to regulate the credit industry is winding its way through the U.S. House of Representatives. A vote is scheduled today on removing auto dealers from the jurisdiction of the agency, and this change ought to be approved.

The auto industry is still undergoing a shakeout and thousands of dealers are going out of business. Vehicle sales for the year are expected to reach a 30-year low. The proposed new Consumer Finance Protection Agency, a dealer organization says, would impose complex new rules and fees on dealers who help their customers arrange financing for vehicle purchases.

The organization, the National Association of Automobile Dealers, notes that the economic meltdown occurred in the mortgage market, not auto loans. Loans arranged by auto dealers are already regulated by the Federal Trade Commission and state attorneys general.

The last thing struggling auto dealers or the industry as a whole need is another layer of regulations that could drive up the cost of credit and make car sales more difficult.

— The Detroit News