What: All Issues : Making Government Work for Everyone, Not Just the Rich or Powerful : Consumer Protection : S 3217. (Overhaul of financial regulations) Motion to endorse the idea that auto dealers should be exempt from being regulated by a new consumer financial protection entity/On the motion (2010 senate Roll Call 163)
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S 3217. (Overhaul of financial regulations) Motion to endorse the idea that auto dealers should be exempt from being regulated by a new consumer financial protection entity/On the motion
senate Roll Call 163     May 24, 2010
Progressive Position:
Nay
Progressive Result:
Loss

This vote was on a motion to instruct the conference committee on a financial regulations overhaul conference report to retain language in a House-passed bill that would exempt auto dealers from being regulated by a new consumer financial protection entity.  Conferees are members of the House and Senate who meet to hammer out the two chambers’ differences on a bill after both chambers have passed it.  The motion was offered to a bill that aims to close gaps in financial regulations, strengthen oversight of consumer lending and more closely oversee complex financial investments. 

These “motions to instruct” are intended to provide guidance to the conferees on a bill. Motions to instruct are not binding on conferees, and as such mostly serve as a platform from which lawmakers can talk about a range of topics, or to put the majority of the chamber on record as endorsing an idea that bears on the conference.   When the two chambers differ on a measure, members of the House and Senate meet to work out those differences in what is known as a conference committee.  The conference committee produces a conference report, which contains the agreement reached on the final bill. The House and Senate must then both vote to approve the final report.

Sam Brownback, R-Kan., who made the motion, said this particular provision was included in the House-passed bill, but not the Senate bill, and that when the two chambers meet to reconcile their different versions, the Senate should retain the House language. 

“What we are asking, now that this bill has passed, is in the motion to instruct our conferees, the Senate conferees, in going with the financial regulatory reform bill, to recede to the House position regarding the auto dealers,” Brownback said.  “Under the Consumer Financial Protection Bureau, 100 percent of all auto loans will still be covered. If you vote for the Brownback instruction, if we recede to the House position, 100 percent of the auto loans will still be covered. We are saying in this, and the House position says: If you actually loan the money—if you are GMAC, if you are some other financiers up the street, you are under the CFPB. If you are simply the retail storefront, which is what the auto dealers are, you are not covered under the Consumer Financial Protection Bureau. You are not covered if you are just the storefront arm of this, but 100 percent of the loans are covered.”

Brownback said the auto dealers want this because it would impose significant cost burdens on them otherwise, and likely end up shedding jobs because of it.

Dodd called Brownback’s motion a “mistake.”
 
“First of all, let me say that when it comes to automobile dealers, they are no different than community banks or other financial institutions; the overwhelming majority are good people and do a good job. But we do not pass laws in this country because a majority of the people commit crimes. We pass laws for the minority who can abuse their relationship with customers or with people. That is no different in this particular case at all,” Dodd said.  “One of the most principal activities that people engage in as consumers is the purchase of an automobile. So we are trying to protect people.”
 
By a vote of 60-30, the motion to instruct conferees was agreed to.  Of Democrats present, 22 voted for the motion and 29 voted against it (including a majority of the most progressive members).  Every Republican present voted for the motion.  The end result is that the Senate voted to express its opinion that the conference committee on a financial overhaul bill should retain the House-passed language exempting auto dealers from regulation by the new consumer financial protection entity the bill would create.

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