Through their lobbying arm, the National Automobile Dealers Association, the dealers have hired a crisis communication team, taken out full-page newspaper advertisements, and organized trips to Washington for dealers like Mr. Berscht to buttonhole lawmakers and make their case.
Their basic message, like those of many other industries threatened by tighter regulation, is that they did not cause the financial crisis, and they should not be penalized for it through a burdensome and costly new regulatory structure.
A vote on the proposed exemption for the auto dealers could come this week on the Senate floor, with neither side predicting victory.
For Mr. Obama, the issue is his latest attempt to push through broad legislative changes in Congress partly by singling out powerful players in the private sector.
In his successful campaign for a health care overhaul this year, Mr. Obama went after the nation’s major insurance carriers repeatedly as a symbol of why the health system needed to be fixed.
To try to restructure the country’s federal student loan program, Mr. Obama portrayed big providers of student loans like Sallie Mae as profiting from a “sweetheart deal” at the expense of struggling students. As in the health care overhaul, he won that debate in Congress, too.
And from the start of the current push for toughened financial regulations, he has cast the fight as an attempt to rein in the big banks on Wall Street, whose “reckless practices” he blames in large part for the economic downturn.
Last week, as the debate over financial regulation neared an end in the Senate, Mr. Obama identified a new target in a formal statement: the “auto dealer-lenders” seeking a “special loophole” in the legislation through an amendment pushed by Senator Sam Brownback, Republican of Kansas.
“This amendment would carve out a special exemption for these lenders that would allow them to inflate rates, insert hidden fees into the fine print of paperwork, and include expensive add-ons that catch purchasers by surprise,” Mr. Obama said. The proposal, he warned, “guts” the bill and encourages “misleading sales tactics.”
The administration also linked the auto dealers exemption to the exploitation of military personnel. Officials released a Pentagon letter saying that many service members, according to an informal military survey, had fallen victim to “bait and switch” tactics and other predatory practices that left them with loans they struggled to pay.
Mr. Obama’s condemnation of unfair auto loans was the first time he has weighed in with a formal White House statement on a specific amendment of the sweeping financial regulation, and it caught many dealers and industry executives off guard.
Some dealers brand the White House’s account of auto loan irregularities as “pure fiction,” saying it mischaracterizes the process by which dealers facilitate or package auto loan requests for lending companies. Moreover, they say Mr. Obama has unfairly vilified their industry.
“The way the White House is portraying us as evil, it’s just wrong,” said Michelle Primm, the general manager of a family-run import dealership, Cascade Auto Group, about 35 miles south of Cleveland.
Ms. Primm made two trips to Washington last month to speak with both of her senators and Congressional staff members about the potential harm from the auto loan provision.