Earlier this week I wrote about a proposed new rule from the Federal Trade Commission that seeks to “prohibit motor vehicle dealers from making certain misrepresentations in the course of selling, leasing or arranging financing for motor vehicles.” Turns out, that doesn’t apply just to your Ford F-150 or Mazda Miata: “motor vehicles,” as defined in the Dodd-Frank Wall Street Reform and Consumer Protection Act, includes recreational boats, motorcycles, motor homes, recreational vehicle trailers and slide-in campers–to RVs in general.
No surprise, then, that the motorcycle, automobile, RV and marine trade associations have come down with both boots on this one. Mark Steinbach, a past member of the board of directors of the National Association of Consumer Advocates, suggested as much back in July, when his written comments to the FTC warned that the various associations “will be circling the wagons” and claiming “that there is no need for the new rule, that everything is hunky-dory” just the way it is. If only.
Start with the claim that the proposed rule is “ill-conceived, ill-supported, ill-coordinated, untested and unlawful.” That’s just one of the opening broadsides from the National Automobile Dealers Association, which filed a 364-page series of arguments to expand on the idea that each problem the proposal addresses “is already regulated under existing law”– which is to say, hey, everything is hunky-dory. That 364-page rebuttal, by the way, is only ten times as long as the FTC’s actual proposal, which brings to mind that old line about brevity being the soul of wit. This is wit-less.
NADA’s submission, as was true of all industry responses, was filed Sept. 12, on the very last day of an 80-day comment period. This was true as well of the RV Dealers Association, which chipped in with its own 13-page argument–which the FTC didn’t post on its website until Sept. 16– detailing why RVs shouldn’t be lumped in with other wheeled conveyances that are sold, financed and titled by dealers. Given all the time it had to prepare its brief, one might wonder why the RVDA did such a skimpy job of it.
The RVDA’s basic line of reasoning begins with the observation that RVs are discretionary purchases, unlike other motor vehicles, and for their buyers are “not essential for their daily life activities, but a means to escape from their daily lives.” That distinction is important to the RVDA because the FTC’s “stated purpose” for the proposed rule is “to protect consumers for essential motor vehicle purchases used for daily activities.” Translation: federal regulations that apply to “essential” purchases are too rigorous for an industry that sells non-essential ways for its customers to “escape from their daily lives,” even if those purchases may easily cost several times more than “essential” ones. Escape that, you yahoos.
There are a lot more specious arguments of this sort in the RVDA brief, from the observation that the RV market is considerably smaller than its automobile counterpart, to a somewhat strained claim that the RV industry needs special regulatory treatment because RVs are not as standardized as automobiles—that “in the RV industry it is customary to prepare a vehicle before a customer is able to use the RV.” At bottom, however, the RVDA is simply claiming that the FTC is trying to solve a non-existent problem—but that if there is a problem, “enforcement should focus on the bad actors, and not treat every dealership as if it is a bad actor.”
Yep–more of the same hunky-dory.
Given that the proposed rule has drawn almost 28,000 comments, scarcely more than a handful of them addressing the implications for RV dealers, it’s entirely possible that the FTC might not even take note of the RVDA’s hyperventilating. But if it does, one may hope it’ll also give a passing glance to the brief comments of Michael Nicholas, an automotive sales manager for the last 25 years who thinks his industry has become immeasurably more transparent over that time period.
“If you really want to go after a business that isn’t transparent,” he wrote in early September, “you may need to look into boat, RV, furniture and jewelry sales, where their markup is huge and a customer has no way of getting [the actual] cost. . . . Try to find the actual cost of a ring or an RV–YOU CAN’T.”