Not just us who are worried
April 27, 2010 | federal legislation, industry, regulation | Comments (0)From a column in the Gainesville Sun:
Harley-Davidson is worried that its dealer-financed loans to bikers will fall victim to new federal financing regulations. And eBay is concerned about possible restrictions on PayPal, a subsidiary, in moving money in the Internet marketplace.
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It also illustrates what some critics say is legislation so loosely drawn that it may inadvertently cover a variety of companies that are involved in lending or moving money, even if they operate far from Wall Street and had little to do with the financial crisis. Some industries, like payday lenders, fear that the financial overhaul may be a backdoor way for Congress to regulate them, something they have successfully fought for years.
Steve Adamske, communications director of the House Financial Services Committee, acknowledges that some House legislation would regulate payday lenders, which make short-term, high-interest loans to people who promise to pay in full with their next check.
“There is a fair amount of caution any time the federal government proposes new oversight,” said Christopher Colwell, a lobbyist for Check ’n Go, a payday lender. “We are trying to determine what impacts these proposals will have on business, intentionally or unintentionally.”
While the legislation’s backers in Congress insist that most nonfinancial companies have little to worry about, many of these businesses say they are deeply concerned that the sweeping provisions in the 1,400-page Senate bill, particularly the regulation of the derivatives market, the creation of a consumer protection board and rules on corporate government, could draw them in and affect their bottom lines.
For instance, auto dealers from 35 states are converging on their senators’ offices this week to seek an exemption from legislation that would treat them as financial lending institutions subject to new federal regulations.
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