Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Consumer Protection Auto Financing topic
No spam. Unsubscribe anytime.
Senate hears debate over bill to bar dealers from forcing dealership financing
Summary
Senator West explained a bill to prohibit motor vehicle sellers from conditioning sales on dealer-provided financing; the committee took public testimony from dealers, credit-union advocates and consumer representatives and left the bill pending.
Senator West told the Senate Committee on Business & Commerce that his bill would amend the Texas Finance Code to prohibit motor-vehicle sellers from conditioning a sale on acceptance of dealer-offered financing and from adding fees when buyers use third‑party financing.
Under the bill, Senator West said, a retail dealer could not increase the cash sale price if a buyer pays in cash or with a third‑party loan and could not prevent a buyer from paying the advertised cash sale price with their own funds or a third‑party loan. He also described a committee substitute not offered that would add protections if a buyer’s chosen lender fails to complete or timely finance the transaction.
Public testimony showed sharply different views. Darren Whitehurst, president of the Texas Automobile Dealers Association, testified in opposition and said the bill would force dealers to accept ‘‘any third party lender’’ regardless of the lender’s policies or whether the dealer had a working relationship with the lender. Whitehurst warned that lawmakers would be forcing private businesses to accept potentially unfamiliar lenders and payment arrangements.
Consumer advocates and credit-union representatives told the committee they favor the bill. Christie Brooks of the Neighborhood Credit Union Alliance described three personal vehicle purchases in which she faced pressure to accept dealer financing and said many consumers lack the financial knowledge to negotiate financing. Brooks said the bill ‘‘ensures that the decision is left up to the consumer.’’
Committee members questioned dealers about cash handling and deceptive advertising. Committee discussion noted existing consumer‑protection statutes for deceptive practices but framed this bill as addressing alleged ‘‘bait-and-switch’’ financing and advertising tactics. Senator West said the measure previously passed the committee and the full Senate in the prior session and asked for similar support; the committee left the bill pending subject to the call of the chair.
