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Dealers: Act now on financial reform bill

Itís a common event these days Ė Congress taking on some massive overhaul of something. This time itís the Senate, about to take up the financial reform bill (S.B. 3217) sponsored by Sen. Chris Dodd.†Media coverage of this bill has focused on regulating Wall Street and the financial services industry but passage, as drafted, could create major problems for boat dealers and our customers. So, this is a call for dealers, employees and, for that matter, everyone in this industry to take action right now. Hereís the short look:

†S.B. 3217 would create a Bureau of Consumer Financial Protection with new and extremely broad authority to regulate almost all “financial products.” That will include dealer-assisted financing and make dealers subject to onerous new reporting, accounting and other regulatory requirements as if we were banks. This will be true even though the banks originating boat loans will be regulated anyway. We need to be exempted from this and it is possible, but only if we all act immediately.

Sen. Sam Brownback, R-Kansas, is set to offer an amendment that would exempt only auto dealers from the BCFP. However, the senator has indicated heís willing to expand his amendment to include marine and RV dealers IF a Democratic Senator makes this request and co-sponsors the amendment.

That clearly puts the ball in our court. It means we must now initiate contact with our senators and ask them to (1) request Sen. Brownback add marine dealers to his amendment, and (2) urge them to become a co-sponsor of the Brownback Amendment.

†We need to emphasize: (1) Marine dealers should be exempt because, just like auto dealers, we do not originate loans, the banks do. Dealers merely assist qualified consumers in securing financing. Banks will still regulate these loans, and lending standards will, therefore, remain high; and (2) We are small businesses and, as such, will not be able to handle the onerous new paperwork and unnecessary reporting requirements, or the intervention of BCFP regulators into our businesses. Also tell them the focus of the financial reform bill should be on the real culprits of the economic collapse, not small businesses like yours who are just trying to survive it.

UPDATE: Time is running out. Hereís the status as of last night: Amendments will likely begin today. According to Mathew Dunn, NMMA legislative director, there is now Democratic support for an unmodified Brownback Amendment, which applies exclusively to auto dealers. It means thereís now high risk the amendment could go forward without including marine dealers. Still, Sen. Brownback indicates the door is not closed on expanding his amendment. WE MUST ACT NOW!

The fastest way is to call the Capitol Switchboard at (202) 225-3121 and ask for your senators. Simply tell whoever in your Senatorís office youíre connected to that youíre asking your senator to please call Sen. Brownback and request he expand his amendment to include you as a boat dealer. And, ask your senator to co-sponsor it with Sen. Brownback if he isnít already doing so. This is particularly important if your senator(s) is a Democrat. But, it wonít happen if you donít help.

Since large numbers of boat sales involve financing, we must preserve dealer-assisted financing by expanding the Brownback Amendment. Make your calls right now, please.

Comments

One comment on “Dealers: Act now on financial reform bill

  1. Gary Rademaker

    Norm: From my research, I have found that Senator Brownback has documented an Amendment to the Bill and should be presenting it for consideration sometime in the near future. His Amendment is SA 3789 (and for some reason it is followed up by SA 3790, which is a condensed version of the same language). The GOOD NEWS is that he has CLEARLY included automobile, RV and Boat dealers in his proposed Amendment S3789

    Hereís the text of his Amendment:
    SA 3789. Mr. BROWNBACK (for himself and Mr. Bond) submitted an amendment intended to be proposed to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail,” to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes; which was ordered to lie on the table; as follows:
    At the end of subtitle B of title X, add the following:
    SEC. 1030. EXCLUSION FOR AUTO DEALERS.
    (a) In General.–The Director and the Bureau may not exercise any rulemaking, supervisory, enforcement, or any other authority, including authority to order assessments over a motor vehicle dealer that is primarily engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both.
    (b) Certain Functions Excepted.–The provisions of subsection (a) shall not apply to any person, to the extent that such person–
    (1) provides consumers with any services related to residential mortgages; or
    (2) operates a line of business that involves the extension of retail credit or retail leases involving motor vehicles, and in which–
    (A) the extension of retail credit or retail leases is routinely provided directly to consumers; and
    (B) the contract governing such extension of retail credit or retail leases is not routinely assigned to a third-party finance or leasing source.
    (c) No Impact on Prior Authority.–Nothing in this section shall be construed to modify, limit, or supersede the rulemaking or enforcement authority over motor vehicle dealers that could be exercised by any Federal department or agency on the day before the date of enactment of this Act.
    (d) No Transfer of Certain Authority.–Notwithstanding any other provision of law, the consumer financial protection functions of the Board of Governors and the Federal Trade Commission shall not be transferred to the Director or the Bureau to the extent such functions are with respect to a person described under subsection (a).
    (e) Definitions.–For purposes of this section, the following definitions shall apply:
    (1) MOTOR VEHICLE.–The term “motor vehicle” means–
    (A) any self-propelled vehicle designed for transporting persons or property on a street, highway, or other road;
    (B) recreational boats and marine equipment;
    (C) motorcycles;
    (D) motor homes, recreational vehicle trailers, and slide-in campers, as those terms are defined in sections 571.3 and 575.103 (d) of title 49, Code of Federal Regulations, or any successor thereto; and
    (E) other vehicles that are titled and sold through dealers.
    (2) MOTOR VEHICLE DEALER.–The term “motor vehicle dealer” means any person or resident in the United States, or any territory of the United States, who is licensed by a State, a territory of the United States, or the District of Columbia to engage in the sale of motor vehicles.

    SA 3790. Mr. BROWNBACK (for himself and Mr. Bond) submitted an amendment intended to be proposed to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail,” to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes; which was ordered to lie on the table; as follows:
    At the end of subtitle B of title X, add the following:
    SEC. 1030. EXCLUSION FOR AUTO DEALERS.
    (a) In General.–The Director and the Bureau may not exercise any rulemaking, supervisory, enforcement, or any other authority, including authority to order assessments over a motor vehicle dealer that is primarily engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both.
    (b) Certain Functions Excepted.–The provisions of subsection (a) shall not apply to any person, to the extent that such person–
    (1) provides consumers with any services related to residential mortgages; or
    (2) operates a line of business that involves the extension of retail credit or retail leases involving motor vehicles, and in which–
    (A) the extension of retail credit or retail leases is routinely provided directly to consumers; and
    (B) the contract governing such extension of retail credit or retail leases is not routinely assigned to a third-party finance or leasing source.
    (c) No Impact on Prior Authority.–Nothing in this section shall be construed to modify, limit, or supersede the rulemaking or enforcement authority over motor vehicle dealers that could be exercised by any Federal department or agency on the day before the date of enactment of this Act.
    (d) No Transfer of Certain Authority.–Notwithstanding any other provision of law, the consumer financial protection functions of the Board of Governors and the Federal Trade Commission shall not be transferred to the Director or the Bureau to the extent such functions are with respect to a person described under subsection (a).
    (e) Definitions.–For purposes of this section, the following definitions shall apply:
    (1) MOTOR VEHICLE.–The term “motor vehicle” means any self-propelled vehicle designed for transporting persons or property on a street, highway, or other road.
    (2) MOTOR VEHICLE DEALER.–The term “motor vehicle dealer” means any person resident in the United States or any territory of the United States, licensed by a State, a territory of the United States, or the District of Columbia, to engage in the sale of motor vehicles.

    I do NOT know why the Senator has included SA3790 – it seems like a less definitive description of what he wants to accomplish. Neither SA3789 nor S3790 have been proposed for consideration yet, however, if you would like to follow the daily Senate proceedings to see when they are proposed and voted upon, you can click on this link and watch for the SA numbers and results: http://thomas.loc.gov/cgi-bin/bdquery/z?d111:SN03217:@@@S

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