RALEIGH, N.C. - Consumer advocates argued yesterday that Congress should include auto dealers under the oversight of a proposed finance-industry watchdog.

"Drive by any car-dealer lot. They're not advertising cars. They're advertising 'get your financing here,' " said Peter Holland, a consumer lawyer in Annapolis, Md.

In Washington, the House debated legislation that would establish a federal Consumer Financial Protection Agency responsible for making banks, credit card companies, and mortgage lenders treat the average person fairly. House passage could come as early as tomorrow.

The agency also would oversee companies that actually provide auto financing, as well as used-car dealers that offer "buy here, pay here" financing. Franchised auto dealers would be exempted from regulation.

But consumer advocates say auto dealers are writing the financing deals and therefore should be regulated.

"When you allow the same product to be regulated in different ways by calling it something else, you wind up with a race to the bottom in terms of standards," said Kathleen Day, a spokeswoman for the Center for Responsible Lending in Durham, N.C. An amendment by U.S. Rep. Mel Watt (D., N.C.) would extend regulations to auto dealers.

Auto dealers argue oversight is unnecessary because the agency would regulate the banks and finance companies that fund and service the loans that dealers arrange. Auto dealers would continue to be regulated by the Federal Trade Commission and state laws, the National Automobile Dealers Association said.

"There are already a great deal of state and federal laws that govern the activities of auto dealers. Many of the things that consumer groups are alleging are illegal and have been illegal for some time," NADA spokesman Bailey Wood said.

He cited practices such as forging loan documents so that borrowers qualify for a high-priced vehicle and selling a car without providing the title, problems that advocates say continue to plague consumers even with current oversight.