President Barack Obama on Wednesday assailed a proposed amendment to a financial reform bill that would exempt auto dealers from oversight by a new consumer protection agency.
Obama has made the consumer agency a top priority in his efforts to rewrite rules that govern Wall Street.
Auto dealerships, who arrange financing for virtually all car loans in the United States, do not want to be lumped in with banks and other lenders that would fall under scrutiny of the new watchdog.
"This amendment would carve out a special exemption for these lenders that would allow them to inflate rates, insert hidden fees into the fine print of paperwork, and include expensive add-ons that catch purchasers by surprise," Obama said in a statement.
"This amendment guts provisions that empower consumers with clear information that allows them to make the financial decisions that work best for them."
Dealers say that while they facilitate financing for car buyers, they do not operate like banks or other lending institutions and should not be lumped in with them on specific new regulation.
The Obama administration, credit unions and small banks oppose any exemption for auto dealers, who are politically powerful across the country as small business employers.
"Claims by opponents of reform that this legislation unfairly targets auto dealers are simply mistaken," Obama said. "The fact is, auto dealer-lenders make nearly 80 percent of the automobile loans in our country, and these lenders should be subject to the same standards as any local or community bank that provides loans."
