The debate over whether the US should regulate auto loans by car dealerships – already a hot topic in the halls of Congress – has gotten even hotter.
A congressional ethics office is looking into whether recent fundraisers influenced the votes of eight congressmen on a House financial-reform measure, according to news reports.
The House bill exempts car dealerships from being overseen by a proposed federal consumer protection bureau. The Senate version does not. The differing provisions in those bills are now being hammered out in a House-Senate conference.
Rep. John Campbell (R) of California, a veteran of the auto industry who proposed the exemption in the House bill, is included in the ethics probe, according to the reports. Four other Republicans and three Democrats are being investigated. All eight either held fundraisers shortly before the House vote or received substantial donations from people who could be affected by the outcome.
House rules urge congressmen to avoid accepting campaign donations when the timing creates a conflict of interest or even the appearance of such a conflict. The Office of Congressional Ethics declined to confirm or comment on the investigation.
Consumer advocate groups are pushing for regulation of the auto industry under the proposed agency, which would oversee financial products like mortgages and credit cards.
They say that auto brokers receive financial incentives by banks for securing high rates on car loans – even when buyers qualify for lower interest rates.
The automotive industry had spent $584 million in lobbying efforts this year as of April 25, according to the Center for Responsive Politics. That includes almost $1 million from the auto financing industry.
Besides Mr. Campbell, the other Republican congressmen targeted in the probe are Jeb Hensarling of Texas, Christopher Lee of New York, Frank Lucas of Oklahoma, and Tom Price of Georgia. The Democrats involved are Joseph Crowley of New York, Earl Pomeroy of North Dakota, and Melvin Watt of North Carolina.