Charlie Sheen Needs this Financial Reform; Five Reasons Why We Need Protection From Car Dealers

Charlie Sheen’s car was stolen and he needs new car dealerships because we all know actors don’t get around without cars. Charlie’s car was stolen near the Summit. This area is definitely known as a very high society area, still there are incidents of car thefts in the vicinity.

Charlie’s stolen car is not the only case in this area; there have been other similar incidences where cars were picked up and dumped at certain points. After Charlie’s car was stolen it was dumped at a point where another car was dumped a few days later. For a high society area the Summit sure is a scary place for people who own expensive cars. On the positive side it’s a great place of opportunity for car dealers because it’s a high society area and many rich people live there, so if a lot of cars are stolen many people would be looking for car dealerships. Nothing can beat the economic crisis better than this right?

Auto dealers have a simple request for consumers: Trust us. That’s the upshot of car vendors seeking exemption from oversight by the proposed Consumer Financial Protection Agency.
Anyone up for some rust-proofing? I didn’t think so. For a few simple reasons, sheltering dealerships from new regulations against predatory lending is a lousy idea:

• Car loans are big business. After mortgages, auto finance is the second-biggest area of lending in the U.S., with roughly $850 billion in outstanding balances. That’s bigger than the credit card industry. Although dealers didn’t experience the same loss rates on subprime loans during the credit bubble as mortgage firms, they did lower their underwriting standards (see below chart).
• Car buyers often get ripped off. Surprise! The Better Business Bureau and state regulatory authorities get more complaints about auto dealers, including their financing practices, than any other industry, according to the National Consumer Law Center. Common tactics include tacking “yo-yo sales,” in which dealers change financing terms after the customer has bought a car; tacking on unnecessary fees; and steering buyers to higher-cost loans.
• Excluding certain classes of lenders distorts competition. With community banks and credit unions set to be regulated by the CFPA, shielding car vendors from government scrutiny would give them an unfair advantage over lenders with less exploitative business models. Allowing dealers to operate under different rules would also invite abuses.
• When dealerships close, customers are often left holding the wheel. Vendors that are going out of business commonly violate agreements with customers, such as failing to pay off existing loans on a trade-in. That’s of particular concern given the thousands of dealers that have shut down since 2007.
• Current consumer protections are insufficient. Oversight by the FTC and other government agencies hasn’t deterred car dealers from engaging in a range of dubious financing practices. Loopholes in federal law, such as the Truth in Lending Act, also exempt dealers from lending standards. MORE UPDATES... Just Click any links..