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Itrsquos tough finding the right balance between too many regulations and too few Stinebert says
<p><strong>It&rsquo;s tough finding the right balance between too many regulations and too few, Stinebert says.</strong></p>

It’s Not That Auto Dealers Hate Regulations

&ldquo;We&rsquo;re looking for clarity and consistency,&rdquo; NADA Chairman Mark Scarpelli says of proposed regulatory reform.

It’s not that auto dealers loathe government regulations that affect them. They say there are too many of laid-down rules of a dubious and repetitious nature.

“No one wants to go back to the Wild West; we want regulations that protect our customers,” says Mark Scarpelli, chairman of the National Automobile Dealers Assn.

However dealers in recent times have seen a slew of regulations they are expected to comply with, or else.

It’s overwhelming, Scarpelli says at a recent American Financial Services Assn. vehicle-financing conference. “Over the last few years, we’ve gotten hit by so many regulations,” he says. “We don’t have the bandwidth to handle the myriad of them coming our way.”   

Yet, some regulations make sense, Scarpelli says, citing the Truth in Lending Act as an example.

“It’s good for all of us,” he says. “We want to know exactly how to do our paperwork. But other things don’t make sense or are too gray. We’re looking for clarity and consistency. It’s hard to do business in an environment that’s otherwise.”

Some regulations make sense, Scarpelli says.

Some federal regulations cause unnecessary paperwork, Don Luke, of Bill Luke Chrysler-Jeep-Dodge-Ram in Phoenix, AZ, says, offering an example.

If a customer’s credit application is turned down, the lender must send a formal setter explaining that. An affected dealer must send the same letter.    

“It’s ridiculous,” Luke says, adding customers already know their credit application didn’t go through, because he didn’t sell them a car.

It’s tough finding the right balance between too many regulations and too few, says Chris Stinebert, the AFSA’s president and CEO.

He hopes President Trump will follow through on his vow to trim regulations that seem excessive. The AFSA and other lobby organizations are joining forces to lobby for regulatory curtailments.

“It doesn’t mean rolling back the last eight years or hurting consumers,” Stinebert says. “It means modifying regulations that make no sense and limit credit access and affordability.”

He and others point to the Consumer Financial Protection Bureau, established by the Dodd-Frank Financial Reform Act, as a regulator that has gone too far in some respects.

But they don’t think the Republican president and Republican-controlled Congress will try to gut the bureau.

“It’s not going away,” says Mark Calabria, formerly of the Cato Institute and now chief economist for Vice President Pence. (His comments at the AFSA conference came before the job change.) “Republicans would do different enforcement, but they’d do enforcement.”

The Federal Trade Commission is a regulator that has focused a lot lately on dealer advertising, looking for deceptive content. Last year, in what was dubbed “Operation Ruse Control,” the FTC took 252 enforcement actions against dealers.

But the FTC on its own doesn’t always find egregious advertising, says Cindy Liebes, the federal regulator’s southeast regional director.

It gets help. Many of the complaints it fields come from other dealers who think a competitor's deceptive ads can unfairly grab potential car sales from them.   

Despite the debate centered on how many regulations there should be and how vigorously they should be enforced, some dealers are fine with them.

One of those dealers is John Garff of the 52-store Ken Garff Auto Group based in Salt Lake City.

“Regulations are the voice of the customer,” he says. “They hold us accountable to do it the right way with customers.”

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