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Inside this issue
Bipartisan Repeal of CFPB Guidance on Auto Lending Passes Key Committee
GM's Barra Promises Answers This Time When She Testifies Before Congress
NHTSA Investigates 1.1 Million Vehicles for Air Bag Problems
Hyundai's Hydrogen Fuel-Cell Car Makes U.S. Debut
Ford's Lincoln Looks to MKC as Next Step to Revival
Market Strength Pushes NADA Used Price Index to Record High
Incentive Spending Expected to Remain High Through Summer
Honda Sets Stage for Big Push into Music-Driven Marketing
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Bipartisan Repeal of CFPB Guidance on Auto Lending Passes Key Committee

Dealers urged to build co-sponsors on the Bureau Guidance Transparency Act (H.R. 4811)

In a rare show of bipartisan cooperation, the House Financial Services Committee sought to turn back an effort by the Consumer Financial Protection Bureau (CFPB) to eliminate dealers' flexibility to discount the interest rate offered to car and truck buyers.

The National Automobile Dealers Association (NADA), a vocal advocate for the legislation, applauded the committee's action. H.R. 4811, introduced by Rep. Marlin Stutzman, R-Ind., rescinds the bureau's 2013 auto finance guidance and injects transparency and safeguards into the guidance-writing process.

“If the CFPB had the benefit of the public's perspective before issuing its auto lending guidance, it would have learned that its changes would likely hike car buyers' monthly payments and limit access to credit, especially for the marginally creditworthy,” said Ivette Rivera, NADA's vice president of Legislative Affairs.
 
“The CFPB has repeatedly chosen to issue guidance in lieu of following a formal rule making process unlike their counterparts at other federal agencies. Notice and opportunity for public comment are critical in the development of good public policy,” the Financial Services Roundtable said in a letter to the committee prior to the vote.

The Guidance Transparency Act bill passed the committee on a bipartisan vote of 35 to 24 with Democratic Reps. Joyce Beatty (Ohio), Steven Horsford (Nev.) and David Scott (Ga.) supporting the bill.

Though the bill rescinds the 2013 auto finance guidance, the CFPB can reissue it but only with greater transparency and public review.

Joining NADA, the Alliance of Automobile Manufacturers, the American International Automobile Dealers Association (AIADA), American Financial Services Association (AFSA), Recreation Vehicle Industry Association (RVIA), and the Recreation Vehicle Dealers Association (RVDA) sent a letter of support to the committee for the Guidance Transparency Act prior to the vote.

Rivera called on dealers to build support for H.R. 4811.

“Dealers are strongly urged to call their House members to ask them to cosponsor the Guidance Transparency Act (H.R. 4811). Strong bipartisan support is critical for the next step in the process, which is a vote by the full House,” Rivera said.
Source: NADA Legislative Affairs

Editor's note: Dealers are urged to call their Representative to ask them to co-sponsor H.R. 4811, the Guidance Transparency Act. Congress can be reached through the Capitol Switchboard at 202-225-3121. To see how the committee members voted click here. For more information, including an issue brief, visit: www.NADA.org/cfpb.
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GM's Barra Promises Answers This Time When She Testifies Before Congress

General Motors CEO Mary Barra will return to Capitol Hill for the next round of hearings on the company's ignition switch recall. The announcement came the same day that GM's victims compensation adviser said a planned compensation fund won't include owners of cars who claim the vehicles are worth less because of the recall. Barra will testify before a subcommittee of the House Energy and Commerce Committee at 10 a.m. Wednesday, a spokeswoman said. Also testifying is Anton Valukas, the lead author of the internal report into GM's failure to recall 2.6 million Cobalts and other cars for more than a decade. GM spokesman Greg Martin said, “Ms. Barra wants to return to Congress and update the House Energy and Commerce Committee members on the actions GM is taking in response to the ignition switch recall.
Source: The Detroit News

Editor's note: For more information on the GM recall, go to www.gmignitionupdate.com or www.safercar.gov.

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NHTSA Investigates 1.1 Million Vehicles for Air Bag Problems

Federal safety officials said Wednesday they are investigating 1.1 million vehicles from five major automakers for problems with air bags that were produced by the same parts company. The National Highway Traffic Safety Administration said its investigation is prompted by six incidents involving 2002-06 vehicles with air bag modules supplied by Takata in which the air bag ruptured during deployment. In April 2013, six automakers recalled 3.4 million vehicles worldwide for air bags built by Japanese air bag firm Takata that could catch fire or send metal fragments flying. Last year's recall, including more than 1 million in the U.S., was blamed on a single faulty part in air bags built a decade ago in Washington State. NHTSA is opening an investigation to collect additional information from the supplier and vehicle manufacturers to better understand the cause and scope of the potential safety defect and ensure that all affected vehicles are recalled,” the safety agency said in a statement.
Source: The Detroit News
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Hyundai's Hydrogen Fuel-Cell Car Makes U.S. Debut

A Southern California motorist drove off the lot of a Hyundai Motor Co. dealership on Tuesday in a zero-emissions car touted by the automaker as marking the commercial debut of mass-produced hydrogen fuel-cell vehicles in the United States. State energy and air-quality officials hailed the occasion in Tustin, California, about 35 miles (56 km) southeast of Los Angeles, as a milestone in efforts to curb tailpipe pollution that accounts for about a third of California's greenhouse gas emissions. In a ceremony at Tustin Hyundai, dealer principal John Patterson handed the keys for the new Tucson fuel cell-powered crossover vehicle to its first U.S. customer, Timothy Bush, who is leasing the car for $499 a month plus a $2,999 down payment. As an added incentive for early adopters, the three-year, 36,000-mile lease term also come with unlimited free hydrogen refueling and free maintenance service at any of one of three participating dealerships in Southern California. With a driving range of 265 miles for each fill-up and minimal cold-weather effects, the vehicle compares favorably to plug-in battery electric cars. Refueling takes about 10 minutes.
Source: Reuters
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Ford's Lincoln Looks to MKC as Next Step to Revival

Looks like a Lincoln. Is quiet like a Lincoln. Powerful like a Lincoln. So is it a Lincoln? Yes, but ... it remains hard to put out of your mind that the new Lincoln MKC shares its basic structure with the still competent, but cheaper, Ford Escape. The MKC is an all-new model and a key part of Ford's effort to revive the Lincoln premium brand. It's Lincoln's entry for the hot — and very profitable — small, luxury crossover segment. As such, it will compete worldwide against the likes of Audi Q5, BMW X3, Mercedes-Benz GLK, Land Rover Evoque and the Acura RLX, the segment leader in the U.S.
Source: USA Today
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Market Strength Pushes NADA Used Price Index to Record High

Tax season market strength wasn't done with the auction in May — wholesale prices remained elevated for the third straight month. And according to NADA's latest Guidelines report, strong seasonal demand served to lift NADA's used-vehicle price index to a new high of 126.8. This is 0.5 percent better than the previous record set just a month earlier. NADA reported wholesale prices over the first five months of 2014 are considerably stronger than what was seen last year, with prices year-to-date sitting 2.9 percent higher than they were through May 2013.
Source: Auto Remarketing
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Incentive Spending Expected to Remain High Through Summer

Though incentive levels remained essentially flat in May, spending still came in at the second highest rate seen this year. That's according to Cars.com data, as the site reported on Wednesday that overall incentive spending in May came in at approximately $2,680 per vehicle. NADA Used Car Guide also reported on incentive spending this week, noting that spending incentive spending remained essentially flat in May, growing by just 0.3 percent on an annual basis to an average of $2,673 per unit, according to Autodata Corp.
Source: Auto Remarketing
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Honda Sets Stage for Big Push into Music-Driven Marketing

American Honda wants its MTV. Its very own MTV. The automaker is launching a major music-focused marketing effort to attract younger buyers who increasingly consume media online and on demand. At the heart of the initiative is a new music channel on YouTube.com, called the Honda Stage, where Honda will publish hundreds of videos of live music performances from a variety of artists.
Source: Automotive News
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Quotable

"If the CFPB had the benefit of the public's perspective before issuing its auto lending guidance, it would have learned that its changes would likely hike car buyers' monthly payments and limit access to credit, especially for the marginally creditworthy." 

   
-- Ivette Rivera, NADA's vice president of Legislative Affairs, commenting on H.R. 4811, a bill to repeal auto guidance from the CFPB, NADAFrontPage.com, June 12

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