June, 22 2010, 07:17am EDT
For Immediate Release
Contact:
Steve Carpinelli (202) 481-1225
Randy Barrett (202) 481-1256
Car Dealers' Tactics Echo Subprime Lenders
Twenty former auto dealership whistleblowers in Arizona,
California, Florida, Hawaii, Illinois, and Michigan say they saw
questionable practices such as falsifying information on loan documents
to boost sales - a practice lately associated with the subprime mortgage
meltdown.
WASHINGTON
Twenty former auto dealership whistleblowers in Arizona,
California, Florida, Hawaii, Illinois, and Michigan say they saw
questionable practices such as falsifying information on loan documents
to boost sales - a practice lately associated with the subprime mortgage
meltdown.
Drawing from interviews and court documents, a Center for Public
Integrity investigative story reveals dubious auto financing practices, such as forging customer
signatures on documents. One ex worker alleges that a manager prodded
him to target African American and older customers -- referring to the
elderly as "people with oxygen tanks." Financing is a crucial profit
center for many auto dealers.
Meanwhile, Senate and House negotiators will decide as early as today
whether to exempt auto dealerships from oversight by a planned consumer
financial protection agency being created as part of broad financial
reform legislation.
Auto dealer lobbyists spent almost $3.5 million in 2009 and the first
quarter of 2010 to lobby Congress on financial reform and other issues,
and say that car loan abuses are rare. Insider allegations suggest
otherwise.
AutoNation Inc., the largest U.S. automotive retailer, has fought
several lawsuits from customers and former employees, including one
brought by a former worker in the company's auto financing department
that documented dishonest lending practices. But Charles Cyrill, a
spokesman for the National Automobile Dealers Association, said auto
financing practices were nothing like those used in the subprime lending
industry before the mortgage meltdown.
California Republican Rep. John Campbell, a former auto dealer, was a
key force behind language in the House financial reform bill that
exempted auto dealers from oversight by the proposed consumer-protection
agency. The Senate's version of the bill did not include an exemption.
On Tuesday afternoon, Congressional negotiators are expected to take up
the auto dealer exemption issue as they meet again to reconcile the Senate and House versions of
the financial reform bill.
Read and link to
the story Car Dealers' Tactics
Echo Subprime Lenders
The Center for Public Integrity is a nonprofit organization dedicated to producing original, responsible investigative journalism on issues of public concern. The Center is non-partisan and non-advocacy. We are committed to transparent and comprehensive reporting both in the United States and around the world.
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