Car Dealers Close to Winning Exemption From Consumer Law

WASHINGTON—Make that Auto Dealers 2, White House 0.

The nation's car dealers appeared on the verge Wednesday of securing a measure that would largely protect them from Congress's wide-ranging financial-regulation overhaul, after an aggressive, months-long lobbying campaign, reported The Wall Street Journal.

The move would mark the second time in seven months that car dealers have strong-armed congressional Democrats into openly defying President Barack Obama's wishes.

In December, Congress passed legislation setting up an arbitration process to reinstate dealerships shuttered by General Motors Co. and Chrysler Group LLC, despite White House warnings that the measure could jeopardize the car makers' taxpayer-financed restructurings.

Auto dealers—long a formidable force on Capitol Hill because of their extensive economic and social ties to communities nationwide—have become even more mobilized and powerful in the past year and a half, congressional observers say. That's largely because dealers' livelihoods were threatened by the bankruptcy reorganizations of GM and Chrysler.

Dealers for U.S. and foreign car manufacturers spent a combined $5.64 million on lobbying in 2009—up nearly 18% from the previous year, according to the nonpartisan Center for Responsive Politics.

The spending translated into several legislative victories, including the cash-for-clunkers rebate program, the exemption clause in the House financial-regulation bill in December and the dealer-arbitration legislation, which had been strongly opposed by GM and Chrysler, as well as the White House.

Auto dealers are substantial contributors to congressional campaigns and are known to flood members of Congress with calls and office visits on particular issues.