Topeka U.S. Sen. Sam Brownback, R-Kan., led a bipartisan vote over the objections of President Barack Obama to exclude auto dealers from the regulations of a proposed consumer financial protection bureau.
The nonbinding 60-30 vote Monday recommends that House-Senate conferees consider Brownback’s proposal when negotiating differences in a bill that overhauls financial regulation of lending and borrowing.
Backed by the military and consumer groups, Obama sought to subject auto dealers that assist in financing to oversight from the proposed consumer regulatory agency. Military officials have said soldiers often are targets of predatory lending schemes when buying cars.
But Brownback fought the provision. “It simply does not make sense to treat auto dealerships like financial institutions,” he said. “Auto dealers are a part of Main Street, not Wall Street, and they are not responsible for the financial meltdown.”
Brownback said there are currently adequate safeguards to help soldiers.
“If anyone is a victim to predatory lending while buying a car, he or she should take the issue to the local and state authorities who already handle such cases and can properly investigate the problem. Adding in another layer of bureaucracy is not the answer,” said Brownback, who is running for Kansas governor.
State Sen. Tom Holland of Baldwin City, who is running for the Democratic nomination for governor, has criticized Brownback over his stand on this issue.
“Washington should be closing loopholes, but Sam Brownback is protecting loopholes for his lobbyist buddies,” Holland said.
In a news release, Brownback emphasized that his proposal won votes from members of both parties, including the support of Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky.
Car dealers have made at least $3 million in campaign donations at the federal level this election cycle, with more than two-thirds going to Republicans, The Associated Press reported.
In the 2008 election, they gave at least $11.9 million, steering more than three-quarters to the GOP, according to data compiled by the nonpartisan Center for Responsive Politics.