FOR IMMEDIATE RELEASE                                          AT
TUESDAY, APRIL 16, 1996                            (202) 616-2771
                                               TDD (202) 514-1888

      JUSTICE DEPARTMENT WILL NOT CHALLENGE WASHINGTON, D.C.
       AREA CREDIT UNIONS' SPONSORSHIP OF NEW CAR TENT SALE


     WASHINGTON, D.C. -- The Department of Justice today said
that it would not challenge a proposal by some 20 Washington,
D.C. metropolitan area credit unions to sponsor a tent sale at
which car buyers could compare brands of new cars at a single
site and purchase a new car at a price no higher than that which
a credit union representative negotiated in advance with the
selling dealer.  The request to review the proposal came from the
Pentagon Federal Credit Union.
     The Department's Antitrust Division said that the group's
proposal would not be challenged since the credit union
negotiator will deal with each dealer on an individual, or one-
on-one basis, and will not communicate any information to a
dealer relating to what prices have been agreed to by other
dealers.  Under such circumstances, the credit union proposal
would not involve its negotiator in any illegal pricing agreement
amongst the dealers.
     Anne K. Bingaman, Assistant Attorney General in charge of
the Department's Antitrust Division, said the Department would be
concerned if the participating car dealers agreed, either amongst
themselves directly or indirectly as a result of price
communications through the credit union negotiator, on prices to
be charged at the tent sale.  She said that any such agreement
would constitute price-fixing which is a violation of the
antitrust laws.
     The Department also observed that to the extent that it
reduced consumer search and anxiety with no adverse effect on
price, the proposed tent sale would be procompetitive.
     The Department's position was stated in a letter from
Bingaman to counsel for the Pentagon Federal Credit Union.
     The tent sale will be advertised as a "no haggle, no hassle"
sales event.  The price negotiated by the credit union and the
dealer will be displayed on each vehicle at the sale.  Credit
union member purchasers, however, will retain the right to
negotiate for a lower price and the dealer will retain the right
to reduce the price from the level that it agreed to with the
credit union representative.
     While the sponsoring credit unions hope to provide financing
for many of the cars sold to credit union members at the tent
sale, a purchaser will be under no obligation to finance through
his/her credit union.  Purchasers may use other financial
institutions, or manufacturer/dealer financing organizations to
finance their tent sale purchases.  They may also buy on a cash
basis.  
     In order to protect their members from unscrupulous auto-
dealer financing tactics, the sponsoring credit unions, will
require participating auto dealers to enter a contractual
commitment not to discuss financing terms with a potential
purchaser until the purchaser has applied for credit union
financing or notified the credit union that it has reviewed the
credit union financing options and decided to go elsewhere. 
Thereafter, the auto dealer would be free to compete for the
customer/credit union member's car financing business.
     Bingaman stated that "the Department of Justice does not
believe that the temporary delay that would be imposed on the
initiation of auto dealer financing discussions with credit union
members would have any anticompetitive effect in any car
financing market."  
     Purchasers of new cars at the proposed tent sale would
retain all of their current financing sources.  They could seek
financing from banks or other types of financing institutions
without notifying their sponsoring credit union.  They could pay
cash, or they could obtain financing through the selling dealer
(or a related financing company).  In the latter situation, the
customer's credit union would have to be given a right to compete
or informed that the member did not want to use the credit
union's financing company.  
     The Department takes no position on the asserted reason for
the proposed special condition for initiation of auto-dealer
financing discussions.  Bingaman added, that under the
circumstances, "the Department does not think it likely that the
proposed delay on auto dealer initiation of financing discussions
with tent sale car purchasers will have an anticompetitive effect
in any car financing market."
     Under the Department's Business Review Procedure, an
organization may submit a proposed action to the Antitrust
Division and receive a statement as to whether the Division will
challenge the action under the antitrust laws.
     A file containing the business review request and the
Department's response may be examined in the Legal Procedure Unit
of the Antitrust Division, Suite 215, Liberty Place, 325 7th
Street, N.W., Department of Justice, Washington, D.C.  20004. 
After a 30-day waiting period, the documents supporting the
business review will be added to the file.
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