Sen Warren earns Four Pinocchios on ‘auto dealer markups cost ‘…

The senator is fighting against the exemption of auto dealers from the federal Consumer Financial Protection Bureau….That’s a Good fight…

But it looks like the numbers she used against the industry are NOT correct….

The below from the the Washington Post Fact Checker people…

Sen. Warren has long objected to Congress’s decision to exempt automobile dealers from the Consumer Financial Protection Bureau, which she helped set up as an adviser to the Obama administration. In a recent speech, she indicated that she will push Congress to eliminate this exemption and allow the CFPB to supervise loans made by car dealers.

We take no position on whether this is necessary — or whether auto dealers should be barred from arranging loans — but we did become curious about a statistic that Warren has frequently cited — that “auto dealer markups cost consumers $26 billion a year.” She referenced a 2011 report released by the Center for Responsible Lending (CRL), which describes itself as a nonpartisan, nonprofit organization that fights “predatory lending practices.”

How accurate is this $26 billion figure and is Warren describing it correctly?

As regular readers know, we hold politicians accountable for the accuracy of sources they cite. There are enough warning flags in the CRL report — such as its lack of transparency on how the $26 billion number was calculated — that would have given a close reader pause. The National Automobile Dealers Association in 2012 submitted to the FTC a lengthy rebuttal of the report that also raised serious questions about the research.

But besides citing a faulty number, Warren misleadingly says it represents “auto dealer mark-ups.” The group that produced the report said that figure includes reasonable compensation owed to car dealers. She earns Four Pinocchios….

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2 thoughts on “Sen Warren earns Four Pinocchios on ‘auto dealer markups cost ‘…”

  1. Gee the next thing you know the Post will be defending lawyers!

    We usually rank just above car dealers.

  2. I stopped reading the Post after Katie Graham died. It is much more right wing than people give it credit for…

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