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Dodd-Frank Exemption
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Recently, there have been concerns and questions about the Wall Street Reform and Consumer Protection Act (Public Law 111-203 or H.R. 4173), known as Dodd-Frank, and its application to boat dealers. MRAA has even been approached by one group to trade off its support of the second home mortgage interest deduction for an exemption from the reporting requirements of Dodd-Frank.

The good news is boat dealers are already exempt from the reporting requirements of Dodd-Frank. During the last minutes of the conference between the House and Senate, former Senator Sam Brownback (R-Kansas) included language supported by MRAA, the National Automobile Dealers association and a maritime lawyer from New York, which amended the definition of "motor vehicles” to include recreational boats, RVs and motorcycles. This action was included in Title X, Subtitle B, section 1029, which already included an exemption for auto dealers.

Even though the act was written as a response to the financial crisis of 2008 and was not written to apply to the normal business transaction of selling merchandise, there was concern that auto and boat dealers would be dragged into government oversight because both take financial statements and serve as the first and last cog in the financing of their sales. The exemption was written to clarify that issue.

The term "motor vehicle” is specifically defined as any self-propelled vehicle designed for transporting persons or property on a street, highway, or other road; recreational boats and marine equipment; motorcycles; and motorhomes, recreational vehicle trailers, and slide in campers. This legislative language can be found on pages 629-630 of the public law.

The specific language reads in sec. 1029 (a) "….the Bureau may not exercise any rulemaking, supervisory, enforcement or any other authority, including any authority to order assessments, over a motor vehicle dealer that is predominantly engaged in the sale and servicing of motor vehicles, the leasing of motor vehicles, or both.”

MRAA will continue to watch the implementation of the act during the rule making process to ensure this definition remains. The federal government has been hearing from consumer groups and certain consumer-oriented lawyers in opposition to the dealer exemption. So far, the government is trying to learn more about the sales transaction and the role boat dealers play in financing. Boat and auto dealers who do their own financing may be subject to the same reporting requirements of banks and finance institutions.