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Inside this issue
Senators Raise Concerns About CFPB Auto Fair Lending Guidance
Truck, SUV Demand Lifts U.S. Auto Makers in October
Bleeding Reserves Today, When We'll Need Them Tomorrow
Editorial: A Better Marketplace
Flashback Feature: 'This is Your Life'
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Senators Raise Concerns About CFPB Auto Fair Lending Guidance

A bipartisan group of 22 U.S. Senators –11 Republicans and 11 Democrats–sent a letter to the CFPB raising concerns about the fair lending auto finance bulletin issued by the CFPB this past March. In particular, the Senators question the CFPB's efforts to “eliminate or severely limit” dealer finance charge participation “through a ‘disparate impact’ theory of liability under the Equal Credit Opportunity Act” based on the CFPB's perception that “permitting negotiation over a consumer's interest rate” creates a significant risk of discriminatory pricing disparities. In the letter, the Senators observe that dealer finance charge participation “frequently results in consumers obtaining a lower cost of credit than is otherwise available to them” and state that the CFPB “has yet to explain its basis” for its assertion that “ ‘disparate impact’ discrimination is present in the indirect auto financing market.” They also state that the CFPB has not released “the complete statistical methodology it employs for determining whether disparate impact is present in an auto lender's portfolio and the extent to which it considered how the practical effect of its guidance will affect competition in the auto loan marketplace.” In the letter, the Senators request complete details on such methodology and ask the CFPB to describe whether and to what extent it did a cost-benefit analysis into how flat fees would affect the cost of credit for consumers.
Source: CFPB Monitor
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Truck, SUV Demand Lifts U.S. Auto Makers in October

Gains show U.S. consumers willing to make big purchases despite government shutdown

U.S car shoppers brushed off Washington's fiscal battles last month and, emboldened by steady gas prices, bought more trucks and sport-utility vehicles and boosted the Detroit Three auto makers over their rivals. General Motors Co. led the way with a 16% year-over-year increase followed by Ford Motor Co. with 14% and Chrysler Group LLC at 11%. Their gains outpaced those of Japanese rivals Toyota Motor Corp. and Honda Motor Co., which mostly sell cars. Sales fell 18% at Volkswagen AG, which doesn't sell pickups in the U.S. "We have seen a shift from cars in general over the last few months to the small-utility segment," said Ford Vice President John Felice. "It has been a near-term trend for about the past quarter." The latest results underscored the importance of stable gas prices and low interest rates to the auto industry's recovery.
Source: The Wall Street Journal
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Bleeding Reserves Today, When We'll Need Them Tomorrow

Everybody is focusing on the positive aspects of October U.S. auto sales. Car execs and analysts are busy praising consumer “resilience” and mooning over a 10 percent sales gain. And everybody ignores the obvious: October sales ain't what they could have been without the partial government shutdown and specter of a federal debt default. I get it. Auto sales are just collateral damage in a bigger fight. Nobody in the auto industry gains any friends by pointing out that political warfare is bad for business. Better to praise consumers for overcoming their fears. So we choose to see the positive. Like galloping through a canyon in some old Western and hearing gunfire. It's that “Hey, I'm not dead” instant before adding “but my horse is bleeding and limping.”

No matter whom you blame, this constant budget battle -- this never-ending mess -- creates uncertainty. Enough to hurt the economy in general, and auto sales in particular. It's a continual drag: Sometimes just a bit, sometimes worse. In an industry as cyclical as the car biz, we need to be socking it away now in the good times to be able to weather the bad times. The political drama bleeds reserves we'll eventually need. It won't change until voters demand a functioning government. Until then, let's all be grateful that car buyers are so resilient.
Source: Automotive News
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Editorial: A Better Marketplace

Auto auctions are rapidly evolving, and new technology is fundamentally reshaping the used-vehicle marketplace. The latest wrinkle is listing vehicles on multiple online sales platforms with simultaneous bidding across all of them. Auction houses Manheim and ADESA and Ally Financial let sellers list on two or all three of their online platforms. So far, the process is limited. Bidding starts on all platforms but only until one platform gets a bid that matches the reserve, the minimum acceptable to the seller. Then bidding continues only on that platform and the others are locked out. Sellers want the bidding to continue everywhere to maximize their take. Sooner or later, that seems likely. Indeed, the used-vehicle marketplace is being dramatically altered. The old model of physical auctions at fixed places has already changed to accommodate more players and the availability of more information. Sellers want the best prices. Buyers want wider access and more choices. Both want lower operating costs. The end result will be a more efficient market that will better serve buyers, sellers and their retail customers.
Source: Automotive News
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Flashback Feature: 'This is Your Life'
By Annette Sykora

It was very surreal. We met early that morning at NADA to go over my testimony. I remember one of the NADA executives turning to me and saying: "You know you've lived this, this is your life, just tell the story." So when it was my turn, that is what I felt I was able to do. I got to tell the dealers' story and tell the committee members about the dealer base and the millions of people we employ across the country. So although it had been a long, hard, stressful day waiting for our turn, it was the easiest thing I had ever done to tell that story because I have had the good fortune to know and meet so many dealers across the country. I knew firsthand the kind of people that I was representing and the money and the time and the efforts that they give back to their communities. So telling their story was a real honor for me.
Source: Automotive News

Editor's note: Texas dealer Annette Sykora was chairman of the National Automobile Dealers Association in 2008. She testified at the congressional hearings in which the Detroit 3 CEOs faced hostile questioning.

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Quotable
"I knew firsthand the kind of people [dealers] that I was representing and the money and the time and the efforts that they give back to their communities. So telling their story was a real honor for me."

   --- Annette Sykora, Texas new-car dealer and 2008 NADA chairman, commenting on her experience testifying during the congressional hearings with the Detroit 3 CEOs, Automotive News, Nov. 4

NADA Market Beat
Auto Sales Subdued for September
Chairman's Column
NADA Endorses Hiring Our Heroes Program
Videos

  NADA Chairman Speaks to Detroit Auto Press (NADA-TV)
NADA Webinars
(All webinars begin at 1 p.m. ET. Click webinar title to register.) 

- Nov. 6: Buy-Sell Transaction Tips and Tricks

- Nov. 13: U.S. Car Sales – The Year in Review and a Look Ahead

- Nov. 20: DMS Access Concerns (Part II)

For more information about the webinars, click here.

NADA Foundation News
Ambassador Spotlight: Richard Kull Promoted Charitable Giving through the NADA Foundation
 
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