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Inside this issue
Consumer Bureau Said to Warn Banks of Auto Lending Suits
Regulation Overload Would Test Einstein
Auto Industry Worried FCC Decision to Open Wi-Fi Spectrum Could Hinder Technology
North America LV Production Up 6.6% in January
Amid New Car Boom, Used Cars Are Gold
Group Estimates 150,000 Vehicles Damaged By Sandy in NY
Louisiana's Bob Israel Elected Chairman of Automotive Trade Association Executives
Dealers, Auto Makers Keen on 'Crowdfunding'
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Consumer Bureau Said to Warn Banks of Auto Lending Suits

The U.S. Consumer Financial Protection Bureau has told at least four banks that it may sue them over vehicle loans and interest-rate markups by auto dealers that appear discriminatory, according to three people briefed on the matter. At least four banks received letters from the CFPB last week giving them 15 days to provide an explanation, said the people, who asked not to be identified because the plans aren't public. The letters indicate the bureau believes the banks may have violated the Equal Credit Opportunity Act, a 1974 law that bars discrimination in lending. Auto lending has been an area of growing revenue for banks. As the economy has improved, new loan originations have been on the rise, reaching $85.8 billion in the third quarter of 2012, according to the Federal Reserve.
Source: Businessweek

NADA Statement: Dealers are committed to ensuring that all categories of consumers are protected and treated fairly. And, as NADA demonstrated during the FTC Roundtable process, dealer-assisted financing provides overwhelming consumer benefits in the marketplace today, including access to affordable credit for millions of Americans who do not have traditional banking relationships. It is essential to note that the rumored allegations referenced in the article do NOT involve intentional discrimination in auto finance, but instead are based on unintentional (and unproven) conduct under the disputed “disparate impact” theory of liability. This theory, which bases findings of discrimination solely on an after-the-fact analysis of financing rates offered to consumers, requires a highly sophisticated statistical methodology which fully accounts for the wide variety of factors that affect those rates. However, the report contains no indication as to the nature of any specific findings in this regard by the CFPB, the specific statistical methodology it may have relied upon or the extent to which that methodology has been subject to appropriate and vigorous third party review.

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Regulation Overload Would Test Einstein

Federal regulations on auto finance are on the short list of things for dealers to worry about in 2013, according to a recent panel of National Automobile Dealers Association leaders. “The biggest thing is regulations. If you sit and look at the number of regulations you have to contend with, it's mind-boggling. Einstein probably couldn't deal with it,” said Forrest McConnell III, NADA vice chairman for 2013. The NADA vice chairman typically becomes the chairman the following year.
Source: Automotive News

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Auto Industry Worried FCC Decision to Open Wi-Fi Spectrum Could Hinder Technology

The Federal Communications Commission is moving ahead with a proposal that would allow the use of part of the wireless spectrum for Wi-Fi that had been reserved for future vehicle-to-vehicle technology. Automakers are worried the decision, which won't be final until next year, could hinder the technology that could prevent thousands of road deaths. The FCC voted unanimously Wednesday to open additional spectrum for unlicensed Wi-Fi devices within the 5.9 GHz band, the platform for connected vehicle technology.
Source: The Detroit News

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North America LV Production Up 6.6% in January

North American auto makers produced 1,297,318 light vehicles in January, up 6.6% from year-ago. The total includes 604,739 cars and 692,579 light trucks. U.S. LV output totaled 872,426 units in January, up 8.3% from like-2012.
Source: WardsAuto

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Amid New Car Boom, Used Cars Are Gold

Fewer Late Model Cars Send Prices Higher; Dealer Cruises Internet for Trade-Ins

A few weeks ago, Justin Severson put an ad on Craigslist to sell his 13-year old Honda, and within a few minutes an eager and unexpected buyer was on the phone—a local auto dealer named Doug Waikem. The dealer "gave me a fair price and it was handled within a few days," said the 31-year-old Uniontown, Ohio, resident. The transaction illustrates a trend rippling through the rebounding U.S. auto market: used cars are so scarce that retailers like Mr. Waikem are scrambling to find suitable vehicles—and paying top dollar when they do. The shortage of used cars stems from the deep plunge in new-car sales between 2008 and 2010, and the virtual disappearance of new-car leases during the financial crisis. As a result, three-year-old cars are now hard to find and even older models are holding their value. The scarcity has pushed up used car prices, often to the point that consumers who finance a purchase with subsidized interest rates can get brand new vehicles for about the same as a monthly payment required for a late-model used car. National Automobile Dealers Association senior economist Paul Taylor expects new vehicle sales this year to rise by more than one million over 2012, to about 15.5 million cars and light trucks. Many people have held on to older cars and now simply have to buy new one. Easier access to credit and the shortage of affordable used vehicles is boosted new-car demand, too, Mr. Taylor said.
Source: The Wall Street Journal

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Group Estimates 150,000 Vehicles Damaged By Sandy in NY

Superstorm Sandy damaged 20,000 more cars and trucks in New York State than originally thought, an insurance industry group is reporting Thursday. New York motorists have so far reported an estimated 150,000 vehicles damaged by floodwaters, falling trees and other storm effects, says the National Insurance Crime Bureau of Des Plaines, Ill. The previous estimate was 130,000, and the group says the total could go even higher. In all 15 states and the District of Columbia affected by the Oct. 29 storm, the group now estimates a total of 250,500 vehicles were damaged. The National Automobile Dealers Association has warned that some of those cars find their way onto the used-car market with clean -- though illegal -- titles, showing no evidence of flood damage.
Source: Newsday

Related Story:

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Louisiana's Bob Israel Elected Chairman of Automotive Trade Association Executives

The Automotive Trade Association Executives has elected Robert C. Israel as chairman for 2013. The ATAEs represent the executives of 115 state and metropolitan new-car and -truck dealer associations in the U.S. and Canada. “I am honored to have been selected by my peers to lead this dynamic organization. I am eager to follow the footsteps of so many close friends who have served before me,” Israel said. “The partnership of ATAE and the National Automobile Dealers Association has proved its worth time after time as we responded to challenges and changes, and I am sure under the leadership of Peter Welch, the new president of NADA, we will do so in the future.”
Source: NADAFrontPage.com

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Dealers, Auto Makers Keen on 'Crowdfunding'

Dealers and auto makers are turning to new ways to raise money for worthy causes. They are using “crowdfunding” that relies on a blend of social media, traditional fundraising and special test-drive events. It involves getting prospective customers involved in exciting ways, from Internet guessing games to fitness events to country-music concerts. Several auto makers are on board, including Ford, Hyundai, Kia and Chrysler. Ford and Lincoln dealers team up with local nonprofit organizations of their choosing and schedule test drive, fundraising activities during a crowd-generating event such as a 5-K run, school functions and sports game. Here's how it works: A community group or school uses platforms such as Facebook, Twitter, Four-Square, along with posters, flyers and old-fashioned phone calls to generate crowds. The sponsoring dealer provides an array of vehicles for test drives at the event and brings a laptop computer to register participants. For every valid test drive, Ford pays $20, cutting a check for up to $6,000 per event.
Source: WardsAuto

Related Story:

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Quotable
"It’s mind-boggling. Einstein probably couldn’t deal with it."

    -- NADA Vice Chairman Forrest McConnell, commenting on the excessive number of regulations auto dealers have to deal with, Automotive News, Feb. 20


  

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