CRL intends to destroy North Carolina
May 1, 2009 | Center for Responsible Lending, alternatives, industry | Comments (2)The automobile business isn’t hurting enough, so the Center for Responsible Lending is pushing legislation to end an auto financing system in North Carolina. From the story:
The Center for Responsible Lending is pushing a bill in the state legislature that would end what it considers predatory lending by some dealers who arrange financing for customers.
According to the center, dealers receive compensation for steering buyers into loans with higher interest rates when they are eligible for lower ones. The measure would stop that practice, and it require dealers to make a vehicle’s cost, fees and any add-ons more transparent.
“We think this would be a really significant consumer protection,” said Chris Kukla, senior counsel for government affairs. “We think this is a practice that harms consumers and takes money out of their pockets at a time when they can least afford it.”
But the auto industry is going through its own turmoil and the measure faces opposition. Some car dealers in the state are fighting for survival amid slumping auto sales and restructuring at domestic automakers General Motors and Chrysler.
“It’s a horrible time in the industry to all of a sudden be picking on the car dealer and say this is a kickback, which makes it sound illegal,” said Robert Glaser, president of the N.C. Automobile Dealers Association. “In every dealership a sign is posted, and consumers know this, that says the dealer may be compensated for arranging financing.”
Consumers are always welcome to finance their cars independently, he said. Dealers, though, are often able to get better loan rates because they have relationships with many lenders, Glaser said.
That last point is a great one. There are choices for consumers, so what’s the problem?
Comments»
The problem is that CRL needs to stick its nose in everyone’s business to make sure that the only choice in town will be the one they ‘approve’ of and will undoubtedly profit from.
CRL claims dealers give more expensive rates. Dealers are saying their financing is actually cheaper. Whoever wins that point wins the debate.