WASHINGTON — As Congress began the process of merging Senate and House versions of financial regulatory overhaul legislation, the Senate voted Monday 60-30 to instruct its negotiators to largely exempt auto dealers from oversight by a new government agency designed to protect consumers from shady lending.
The House included an exemption in its version. But auto dealers were not able to get a vote in the Senate.
A House-Senate conference committee will reconcile the bills. The Senate’s Monday vote is not binding, and President Barack Obama has argued forcefully against diluting the bill’s consumer provisions.
“They are the quintessential Main Street business in the country,” Sen. Sam Brownback, R-Kan., the main backer of the exemption, said of auto dealers, noting that they did not cause the financial crisis. “There’s not a single auto dealer on Wall Street.”
Senate Banking Committee chairman Christopher Dodd, D-Conn., one of the key negotiators on the final bill, opposed the exemption.
Dodd noted the strong opposition by top Pentagon officials, who say the military receives frequent complaints about auto dealers who take advantage of service members.
Auto dealers say they only process the loans and then turn them over to other lending institutions for them to administer and service. The exclusion would not apply to dealers that provide their own financing or to giant auto lender GMAC.
The Associated Press contributed to this report.
