The White House has come to the aid of the Federal Trade Commission, supporting its used-car rule that is under sharp attack in Congress.
Virginia H. Knauer, a special assistant to the president for consumer affairs, has written a key congressman to express her support for the rule, which requires used-car dealers to disclose more information about the cars they sell to consumers.
"I wish to express my support for the used-car rule promulgated by the commission," Knauer wrote Rep. James J. Florio (D-N.J.), chairman of the House subcommittee that oversees the FTC. "The rule provides signficant benefits to consumers," she added.
The rule requires car dealers to post a one-page Used Car Buyers Guide on a car's window to give consumers a description of their warranty rights. The guide also requires dealers to disclose any major defects they know about the car.
After heavy lobbying from the used-car industry--which vigorously opposes the rule--Congress is considering overturning the rule. Under legislation enacted 18 months ago, Congress can veto FTC rules if both the House and Senate pass a resolution of disapproval.
Committee votes in both the House and Senate on the veto are expected next week. Until Knauer's letter was revealed, congressional aides had been predicting that the veto would succeed. Proponents of the rule, however, hope Knauer's letter will sway enough votes against the veto to let the rule go into effect.
"In my view, the rule is a reasonable, straightforward and uncomplicated approach geared toward alleviating a pervasive problem in the used-car industry which directly impacts on all types of consumers, namely consumer reliance on oral misrepresentations by dealers of the mechanical condition of used cars and warranty coverage," Knauer wrote this week.