A 2002 law that exempted auto dealers from mandatory binding arbitration clauses in their franchise agreements was a victory for dealers and for NADA, but it hasn't been the last word on the issue.
Today, the Consumer Financial Protection Bureau is reviewing draft rules that would limit mandatory binding arbitration in consumer finance contracts and make it easier for consumers to file class-action suits against all kinds of creditors, including dealerships.
NADA argues that these two issues are far different in scope. Dave Regan, NADA executive vice president for legislative affairs, said that, for starters, the CFPB is seeking to change contracts across the entire consumer financial services market, not just in auto finance.
Consumer advocacy groups that support the CFPB's move to limit arbitration cite the 2002 Motor Vehicle Franchise Contract Arbitration Fairness Act to single out dealers and accuse dealers of hypocrisy on the issue of arbitration.