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Top Stories
Auto Dealers Challenge California's Tailpipe Climate Regulation
Committee OKs Consumer Financial Protections, Auto Dealers Excluded
NADA Tries to Ease Chrysler Dealers' Shift to GMAC
Chrysler Financial to Liquidate by End of 2011, U.S. Says
NADA Marketplace
Experient, Inc. is NADA's Official Housing Bureau for the 2010 Convention in Orlando
Reminder: Red Flags Enforcement to Begin on November 1
New Webinar Oct. 28 to Address Dealers' Commercial Credit Issues
Top Stories
Auto Dealers Challenge California's Tailpipe Climate Regulation
By Jim Motavalli

The National Automobile Dealers Association represents ... car and truck dealers, whose interests have occasionally diverged from the carmakers (represented by the Alliance of Automobile Manufacturers). This is quite apparent in their approach to the federal combined fuel economy and greenhouse gas standards for vehicles announced by the Obama administration last May and set to go into effect in model year 2012. A public hearing on those standards will be held in New York [today].

An advance copy of N.A.D.A.’s testimony reveals that the ... dealers association ... objects to the federal rules incorporating standards developed by the California Air Resources Board (C.A.R.B.).

The New York testimony is ... to be delivered by Forrest McConnell, president of Alabama-based McConnell Honda and Acura and N.A.D.A.’s regulatory affairs chairman. In his prepared remarks, Mr. McConnell said that N.A.D.A. “strongly objects to the proposal’s admitted attempt to incorporate the fuel economy/greenhouse gas rules promulgated by California’s unelected Air Resources Board.”

Adapting the California rules “is neither practically necessary nor legally appropriate for a well-designed single national fuel economy/greenhouse gas program,” Mr. McConnell’s testimony said. He went on to remind regulators of “the dire economic state and volatile nature of the industry,” with sales falling from more than 16 million annually two years ago to less than 10 million today.

Douglas Greenhaus, N.A.D.A.’s director of environment, health and safety, said in an interview that the dealers association’s issue is mainly with the waiver, not the larger federal agreement. 
Source: The New York Times

Editor's Note: Click here for McConnell's full testimony and press release.]

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Committee OKs Consumer Financial Protections, Auto Dealers Excluded

WASHINGTON -- The House Financial Services Committee approved the Consumer Financial Protection Act -- but agreed to exempt auto dealers from the agency's new financial watchdog. Before the final vote, the committee approved an amendment from. Rep. John Campbell, R-Calif., ... to exempt dealer transactions from the oversight of the new Consumer Financial Protection Agency. Instead, dealer lending would be still regulated by the Federal Trade Commission and the Federal Reserve. The committee approved the Campbell amendment on a 47-21 vote. "It makes sense to exclude dealers. Dealers had absolutely nothing to do with the credit crisis," said David Westcott, chairman of National Automobile Dealers Association's government affairs committee and a multi-franchise dealer from North Carolina.

NADA's legislative office, as well as dealers across the country, will continue to be involved throughout the process. "The overwhelming majority of committee members clearly understand that CFPA jurisdiction over dealers is unnecessary and that increased uncertainty in the auto marketplace would limit consumer finance options and increase car buyers' costs," Wescott said. But the NADA said Frank's exemption was too narrowly drawn -- and would still have subjected dealer financing to regulation. The dealers group notes that auto lending is already regulated by all 50 states, the Federal Reserve Board and Federal Trade Commission. It also took issue with the consumer groups, saying auto-related complaints were just 1 percent of all FTC complaints last year.
Source: The Detroit News

Editor's Note: For the measure to pass, Rep. Campbell revised his amendment to keep "buy here, pay here" auto finance operations under the CFPA. The dealer victory on the Campbell Amendment in the House Financial Services Committee was just the first step in the lengthy legislative process. The House Energy and Commerce Committee, which also has partial jurisdiction over the new agency, will have an opportunity to consider the bill before a House vote. The Senate will have to go through a similar process. NADA anticipates efforts to strip or revise the Campbell Amendment. To protect the Campbell Amendment language from being stripped out, dealers must remain actively engaged with all Representatives and Senators to better educate them regarding dealer-assisted financing.

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NADA Tries to Ease Chrysler Dealers' Shift to GMAC

WASHINGTON -- Some Chrysler dealers are caught in a tug of war between the two finance companies over which lender should have priority over the dealership assets, said Forrest McConnell, chairman of the regulatory affairs committee for NADA... If the dispute isn't resolved quickly, the dealers could go out of business. They need to be able to finance their inventory to sell more vehicles. The conflict involves dealers who have floorplan, or inventory financing, as well as other commercial loans such as a mortgage or working capital loan through Chrysler Financial. Chrysler Financial wants dealers to pay off all their obligations before transferring their floorplan credit lines to GMAC.

"Dealers are stuck in the middle," wrote McConnell, a Honda and Acura dealer in Montgomery, Ala. "GMAC has indicated that it will not finance a number of these floorplan loans without priority, and Chrysler Financial is not willing to give it up." NADA recently helped resolve a similar dispute with Chrysler Financial, McConnell pointed out. Chrysler Financial was refusing to let Chrysler dealers move their floorplan to GMAC or other lenders unless they paid large sums of money into a reserve account. "NADA urges Chrysler Financial and GMAC to resolve this impasse at the earliest possible time," McConnell said. "The availability of these loans is of vital concern to dealers and for Chrysler."
Source: Automotive News
 

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Chrysler Financial to Liquidate by End of 2011, U.S. Says

WASHINGTON -- The Treasury Department said Thursday that Chrysler Financial is working to close its doors by the end of 2011. "Chrysler Financial is currently following Treasury's directive to liquidate its business in an orderly fashion," said Kenneth Feinberg, the Treasury's special master overseeing pay for top executives at the seven firms that received government bailouts. "Chrysler Financial is currently pursuing a successful wind down of its operations by Dec. 31, 2011," Feinberg states in a document to Chrysler Financial dated Thursday. Cerberus Capital Management LP officials, however, said they were unaware of any liquidation orders and that closing isn't part of their business plan. "We state (the planned liquidation) as the current aspiration, not a plan that is set in stone, and we drew that conclusion from the company's submissions and our discussions," said a Treasury official who asked not to be identified.
Source: The Detroit News

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NADA Marketplace
Experient, Inc. is NADA's Official Housing Bureau for the 2010 Convention in Orlando

NADA has made arrangements with Experient, Inc. to book hotel rooms for the upcoming NADA Convention & Expo in Orlando. NADA has NOT authorized any other organization or company to make hotel reservations for the convention. E-mails, phone calls or other communications from “Expo Marketing” or “Expo Housing” or any other third party are not being sent by NADA or on behalf of NADA. To register and reserve a hotel room for the convention, visit www.nada.org/convention.
Source: NADA Newswire

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Reminder: Red Flags Enforcement to Begin on November 1

The FTC's "Red Flags Rule" became effective Jan. 1, 2008, and after several delays, the FTC will begin enforcing the Red Flags Rule against all entities subject to the enforcement authority of the FTC, including all auto dealers on Nov. 1, 2009. Many dealers have already implemented their Red Flags programs, but those who have not should review the NADA Guide "A Dealer Guide To The Red Flags and Address Discrepancy Rules: Protecting Against Identity Theft." Dealers should ensure compliance no later than Nov. 1, 2009 with all aspects of the Red Flags Rule, including the drafting and implementation of a written Identity Theft Prevention Program tailored to their dealership operations. Visit the sites below for more information:

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New Webinar Oct. 28 to Address Dealers' Commercial Credit Issues

NADA will present a webinar on Wednesday, Oct. 28 from 1-3 p.m. EDT, designed to suggest possible near term-solutions to current dealership commercial credit issues. A panel of representatives from the Small Business Administration (SBA), a dealership trade association, and the commercial lending community, as well as an automotive finance consultant, will review current credit concerns and how the SBA’s dealer floorplan (DFP) loan guarantee pilot program, among other solutions, can help.

While the webinar’s emphasis will be on floorplan lending, other credit lines, including real estate loans, are expected to be discussed. Special attention will be paid to SBA’s 7(a) loan guarantee programs, including DFP loans. This webinar is offered at a special reduced rate of $125. For more information or to register for “Credit in Crisis: Dealership Commercial Credit Concerns and Possible Solutions,” visit www.nada.org/seminars or call (800) 248-6232, ext. 7222#.
Source: NADA Newswire

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Quotable
 
"While the California Air Resources Board has a long history addressing mobile source criteria and hazardous pollution, incorporation of its greenhouse gas rules is neither practically necessary nor legally appropriate for a well-designed single, national fuel economy and greenhouse gas program."

   
-- Forrest McConnell, chairman of NADA’s regulatory affairs committee, told NHTSA and EPA officials today at a hearing in New York that "a single, national standard is essential and must set only feasible and affordable mandates," NADA Newswire, Oct. 23
Video Highlights
 

Crisis Timeline: NADA in High Gear (NADA-TV)


Media Coverage: The Tragedy of Dealer Closings (NADA-TV)



NADA's New Buy Now Campaign


 Senate Testimony on Floorplan Loans (NADA-TV) 
 NADA Tackles Industry Crisis (NADA-TV) 
NADA on the Front Lines  (NADA-TV)

Click here for more video reports.
2010 Convention
 
 

Did you know?

Orlando is rated No. 2 out of the top 200 event destinations, attracting more than 4 million attendees for conventions and meetings each year. So why not plan a family vacation before or after the NADA convention? Convention delegates can purchase discounted tickets to nearly 100 attractions, such as SeaWorld, Universal Orlando, Walt Disney World, Kennedy Space Center and more. Click here for details.

Be in the know
at the NADA convention Feb. 13-15.

 
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