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RVDA Fights to Save Dealer-Assisted Financing

The Federal Trade Commission’s (FTC) recent fact-finding roundtable on dealer lending practices signals that the commission may try to further regulate dealership financing.

According to a press release, the Recreation Vehicle Dealers Association (RVDA) and other dealer groups, including NADA, firmly “believe that consumers already have adequate protections and that more regulatory barriers to vehicle financing would hurt the RV industry and the overall economy.”

RVDA said that the FTC is under intense pressure from consumer groups to more tightly regulate dealership financing. A major area of concern for RV dealers is the commission’s investigation into how dealership F&I departments generate revenue by marking up lender wholesale rates.

Rate markups are likely to be a priority for the newly created Consumer Finance Protection Bureau (CFPB). RVDA and its allies are deeply concerned that the bureau will indirectly regulate dealership compensation by pushing to establish a flat rate reimbursement policy on the banks it oversees. These banks in turn may be limited to compensating dealers with a flat rate for the transaction, rather than a percentage of the loan.

RVDA will keep dealers updated on this important issue through email alerts and RV Executive Today. For more information click here.


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Comments Disabled To "RVDA Fights to Save Dealer-Assisted Financing"

#1 Comment By John Eldridge On November 30, 2011 @ 12:34 pm

As a consultant to the financing end of the RV business, I would have have to say the vast majority of dealers do an excellent job of keeping the interest rates to the customer well in line with rates the customer could arrange if they got the loan themselves. While RV dealers are paid a per centage of the amount financed mark up on the rate, it is not the same as an auto dealer which is paid on the spread of the rate. It is an apples and oranges comparison. In any business competition dictates what you are able to charge and still capture the business. With more credit unions offering RV financing as well as other lending institutions that do not offer indirect financing, dealers are not able to generate income from financing as they had been able to in some years.
Many dealers no longer have an active F&I department and have had to take a reduction in that department as far as income for the entire dealership. It makes better sense for the government to look into other things that do not effect a segment of the economy already hurting from the overall economic picture, say for example why banks are paying nothing for saving but charging 13% plus for credit card rates. If you want to protect the consumer, that is the place to look.