Since 2010, car dealers have faced crippling assaults from Congress and federal agencies. The kickoff to trouble was the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed by President Obama on July 21, 2012. That legislation created the Consumer Financial Protection Bureau (CFPB) to regulate consumer credit but supposedly exempted all, or nearly all, franchised dealers. The exemption was not entirely effective, though, since the CFPB was left with the ability to wreak havoc with the exempted dealers' operations by regulating the finance companies, banks, and credit unions that buy the dealers' financing contracts. The exemption for car dealers did not extend to dealers who hold their own retail installment contracts or to those without vehicle repair facilities.
The dealerships, and the finance companies they deal with, invited the federal government's tender attentions by misbehaving. Not all of them, by any means, but there were enough bad actors to generate a steady drumbeat of newspaper articles, TV "investigative reporter" pieces, and complaints to officials, and that steady stream, almost all anecdotes, served as the rationale for most of the subsequent legislative and regulatory attacks on dealer practices.
This book recounts the story of the dealer-bashing that has come out of Washington over the last several years, as reflected by articles that I wrote (a few with the help of my partners) as the events occurred. Sprinkled among these real-time observations are descriptions of the burdens that federal laws and regulations impose on dealers, and the new emphasis on enforcement by the federal agencies.
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