H.R. 2309 Would Expand FTC Authority to Regulate Automobile Finance
The Consumer Credit and Debt Protection Act, introduced by Bobby Rush (D. Ill) on May 7, 2009, and co-sponsored by Doris Matsui (D. Cal.) and Janice Schakowski (D. Ill), currently is pending before the House of Representatives. (H.R. 2309) Section 2 of the Bill would authorize the FTC to regulate automobile sales:
(2) AUTOMOBILE SALES- The Federal Trade Commission shall examine the practices of automobile dealers with respect to credit and lending and shall prescribe such rules as the Commission determines necessary (in accordance with section 553 of title 5, United States Code) in order to prevent unfair and deceptive acts or practices of such dealers. The Commission shall consider adopting rules that– (A) restrict post-sale changes in financing terms; (B) require that automobile purchase agreements or sales contracts entered into between a consumer and an automobile dealer include a provision which permits the consumer to cancel the transaction within a specified period following the sale or receipt of final information concerning the terms of the sale or financing; and (C) limit the ability of automobile dealers to accept or solicit compensation that is based on the interest rate, annual percentage rate, or the amount financed with respect to the sale of an automobile and that is either — (i) for the provision, procurement, or arrangement of financing; or (ii) for the sale, assignment, or transfer of the installment sale contract.
Section 4 authorizes State Attorneys' General to enforce the FTC's rules:
(a) In General- Except as provided in subsection (f), a State, as parens patriae, may bring a civil action on behalf of its residents in an appropriate State or district court of the United States to enforce the provisions of the Federal Trade Commission Act or any other Act enforced by the Federal Trade Commission to obtain penalties and relief provided under such Acts whenever the attorney general of the State has reason to believe that the interests of the residents of the State have been or are being threatened or adversely affected by a violation of a rule prescribed under section 2(b) or any other rule relating to consumer credit or debt promulgated by the Federal Trade Commission.
The text of the bill can be found at H.R. 2309. On May 12, 2009, the Subcommittee on Commerce, Trade and Consumer Protection of the House Energy and Commerce Committee held hearings on the Bill, including, not surpisingly, testimony from the FTC and NCLC in support of the legislation. FTC's Testimony in Support of HR 2309 NCLC Testimony in Support of HR 2309 The AFSA also offered testimony regarding the proposed legislation. AFSA Prepared Statement The House Subcommittee's link to all testimony can be found at here.
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