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.