WASHINGTON — President Obama on Wednesday said a proposal by Sen. Sam Brownback, R-Kan., related to overhauling the financial industry would undermine consumer protections and create loopholes for auto dealers.
Brownback has introduced a proposal that would exclude car dealers from oversight of a consumer protection bureau that would be created by sweeping financial legislation in the Senate. A Democratic proposal to create a consumer watchdog has been a major point of contention in the Senate.
The consumer protection bureau would police credit cards, mortgages and other consumer financial products following concerns that companies sold to people complex financial instruments that they didn't understand. Obama has said previously that companies duped people with hard-to-understand credit and mortgage information and that in turn spurred the economic crisis.
Obama said in a statement the amendment "would carve out a special exemption for these lenders that would allow them to inflate rates, insert hidden fees into the fine print of paperwork, and include expensive add-ons that catch purchasers by surprise." He didn't mention Brownback by name, however.
He brushed aside charges that auto dealer-lenders would be unfairly targeted by Democratic financial legislation. "The fact is, auto dealer-lenders make nearly 80% of the automobile loans in our country, and these lenders should be subject to the same standards as any local or community bank that provides loans," he said.