SAN FRANCISCO — Car dealers ducked a Congressional bullet last year, but now auto lenders are bracing themselves for how powerfully a new financial-reform law may hit them.

The fledging Consumer Financial Protection Bureau doesn't officially begin operation until July 21. But lenders clearly are concerned and fear the unknown.

“No one knows what's going to happen,” Chris Stinebert, president and CEO of American Financial Services Assn., says at the group's vehicle-finance conference held here in conjunction with the National Automobile Dealers Assn. convention.

The federal law beefs up government oversight of the financial-services industry, which vigorously opposed the legislation, saying the stricter regulations would make credit less available.

“It was a stringent bill, and we tried to get the best one we could,” says AFSA Chairwoman Mary McDowell. “We want to make sure people from all walks of life have access to affordable credit and not be subjected to predatory lending.”

Lenders worry the legislation largely is “undefined,” Stinebert says. “The bill was open-ended and gives the future director a lot of power. If that person doesn't like vehicle financing, the indirect lending model and risk-based pricing, we don't know what might happen.”

AFSA has retained the services of five law firms to help protect lenders' interests as the new bureau gets up and running. Conference attendees were urged to contribute to a political action committee fund.

“We hope (the bureau) will look at the body of our work and not just at a predatory lender taking advantage of grandma,” Stinebert says. “We should be proactive. Why wait for regulatory action when we can do some of these things now?”

At the urging of the Obama Admin., Congress had considered including auto dealers in the legislation, because they often facilitate indirect lending by acting as a link between lenders and borrowers.

NADA launched a vigorous lobby effort and ultimately prevailed in its opposition to including dealers in the bill.

“It is a wonderful thing to be victorious when you are going up against the president of the United States,” says Stephen Wade, a Utah-based dealer who is the 2011 NADA chairman.

It shows what can happen when dealers stick together, he says. “We're not as effective when segmented.”

Wade emphasizes that dealers “facilitate” loans, but don't make them. Still, he expects auto retailers will feel the effect of the credit-reform legislation.

“We will be dealing a lot with regulatory issues,” he says. “There are a lot of unknowns. The devil is in the details.”

Consumer advocates who wanted dealers included in the legislation cited cases in which some dealers took advantage of customers by unreasonably hiking interest rates on loans, and then reaping the profits.

But such business practices are limited to a few shady operators, says dealer William Underriner of Underriner Motors in Billings, MT.

“It is not true that dealers are raking customers over the coals on finance rates,” he says. “One or two percent might not be doing the right thing. To jack up interest rates that are unreasonable shouldn't happen.”