I know my industry has a certain reputation but to use a stereotype to further your own political gain…well, that’s just about enough Mr. John McHugh. Yes, that John McHugh, the Secretary of the Army who just told the world that he’s ready to repeal “Don’t Ask, Don’t Tell” but then back-pedaled. That John McHugh who just this weekend withdrew from the State University of New York’s commencement because there was a planned protest brought on by his scheduled speech. Now he’s trying to save face with his troops and deflect criticism by making completely misguided and preposterous claims about car dealers.
We’ve all been watching the debate over the Senate’s financial reform bill and I’m glad to see something being done to protect us consumers from the practices that got us into this blood-soaked, nightmarish hellscape we call our economy. But auto dealers are part of Main Street, not Wall Street, and they’re not responsible for the financial meltdown. Dealer-assisted financing provides more convenience, more competition and more choices for consumers. Because dealers have multiple relationships with lenders (community banks, local credit unions, national banks, and captive finance companies), they are able to help find consumers the best rate. Consumers can always rely on their personal banking relationships but dealers can regularly meet or beat the bank or credit union rate and make it easier for the consumer by handling the loan for them.
The Senate is debating now on an amendment that would exempt car dealers from the federal reform. Dealers should be exempt from it because dealers only act as the conduit between consumers and banks, they are the third-party arranging the financing. In his letter to the Senate Banking Committee Chairman protesting the amendment, Mr. McHugh stated that “soldiers need to be protected from ‘unprincipled auto lending’ so they can concentrate on their primary mission: protecting our great nation.” Huh? “Soldiers who are distracted by financial issues at home are not fully focused on fighting the enemy, thereby decreasing mission readiness.” He’s kidding, right?
Hellooooo, auto dealers are not banks. They help arrange financing and help consumers find affordable credit. This competition helps keep auto financing affordable. There are plenty of strong, current laws in place to protect consumers from auto finance shenanigans. Dealers are well-known, small-business owners in the community who sponsor Little League teams and employ constituents. We’re finally seeing some light at the end of this dark tunnel so Mr. McHugh, mind your own business. Gain respect from your soldiers the old-fashioned way: earn it!