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Inside this issue
NADA Requests CFPB Memo Outlining "Goal" of Limiting Dealer Discretion
FCC Releases 'Omnibus' TCPA Ruling and Order
Second Company Probed for Air Bag Inflator Malfunctions
How Junk Cars Can Slip through the Cracks
General Motors to Announce Big Expansion of Texas SUV Plant
Gen Y Just Behind X in Financial Stability, Earnings
M-B Dealers Donate $100k for S.C. Scholarship Fund
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
NADA Requests CFPB Memo Outlining "Goal" of Limiting Dealer Discretion

The National Automobile Dealers Association (NADA) on Monday asked the Consumer Financial Protection Bureau (CFPB) to make public an agency memo that appears to plainly undermine the Bureau's long-standing claims that it is not targeting auto dealers through enforcement actions. The request was made under the Freedom of Information Act (FOIA) and signed by NADA Chief Regulatory Counsel Paul Metrey.

According to a June 30, 2015, article in American Banker, three senior CFPB officials sent CFPB Director Richard Cordray a memo outlining how a proposed settlement with American Honda Finance Corp. would further the agency's "goal" of "significant[ly] limiting dealer discretion."

Dealer discretion is the amount of an auto loan the dealer is able to discount at the retail level for a customer. Since this type of discounting begins and ends at the dealership, any targeting of dealer discretion is tantamount to regulating what actions a dealer is permitted or not permitted to take.

"If true, the statements made by senior CFPB officials in this memo directly contradict repeated statements, including testimony before Congress, from Director Cordray that he is aware and respectful of his Congressional mandate not to regulate dealers," said NADA President Peter Welch. "Consumers benefit tremendously from dealer discounts, so they deserve to know if these discounts are in danger of being unjustly and unfairly eliminated by overzealous Washington regulators."

A copy of NADA's letter to CFPB's Chief FOIA Officer is available here.
Source: NADA
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FCC Releases 'Omnibus' TCPA Ruling and Order

The FCC released its final omnibus ruling and order related to numerous petitions seeking clarification of the rules under the Telephone Consumer Protection Act (TCPA). As NADA noted when the FCC voted to approve the proposals, these rulings will affect a number of areas related to “autodialed” and pre-recorded telephone calls. Among the changes that could affect dealers is an interpretation of the critical term “automatic telephone dialing system” in the TCPA so as to encompass any technology with the capacity to dial random or sequential numbers. This interpretation and several others in the order could require changes in dealers’ telephone and text messaging practices. Dealers should review those practices and the systems used to make calls and send text messages in light of these changes, and should consult with counsel to ensure compliance with the new rulings.
Source: NADA Regulatory Affairs
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Second Company Probed for Air Bag Inflator Malfunctions

The problem of exploding air bags could be widening beyond Japanese manufacturer Takata Corp. U.S. safety regulators are investigating inflators made by ARC Automotive Inc. that went into about 420,000 older Fiat Chrysler Town and Country minivans and another 70,000 Kia Optima midsize sedans. The probe, revealed in documents posted Tuesday by the National Highway Traffic Safety Administration, comes just weeks after Takata agreed to recall 33.8 million inflators in the U.S. in the largest automotive recall in American history. At least eight people have been killed worldwide by flying shrapnel from Takata inflators, and more than 100 injured.
Source: Associated Press
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How Junk Cars Can Slip through the Cracks

Not all states fully participate in federal electronic database

In May, 7,000 to 10,000 vehicles that were covered by insurance were soaked by floodwaters that hit Texas. And that's not including the countless cars and trucks that were uninsured. That is according to the National Insurance Crime Bureau, citing data from Copart, a salvage auction company. Historically, about half the vehicles damaged by floods are resold, some to unsuspecting buyers, Carfax Inc. estimates. The good news is that the federal vehicle electronic title-checking system, the National Motor Vehicle Title Information System, is firmly in place. Under the auspices of U.S. Department of Justice, the system's goal is to cut down on title fraud, which includes keeping unsuspecting consumers and dealers from being hosed by unscrupulous people selling dried-out salvage and junk cars and trucks. The bad news is that all states don't fully participate in the electronic system. Forty-four state motor vehicle titling agencies contribute vehicle title data to the system. Only 38 make inquiries before issuing new titles, according to the system's website, vehiclehistory.gov. "Anytime you have a number of states not fully participating, you create some weakness in the system," said Jim Moors, director of franchising and state law at the National Automobile Dealers Association.
Source: Automotive News
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General Motors to Announce Big Expansion of Texas SUV Plant

General Motors will announce Tuesday that it's spending more than $1 billion on a huge expansion of its SUV factory in Arlington, Texas. The company wouldn't comment on specifics of the investment, but it has scheduled a news conference for 1 p.m. Central Time at the factory. Cathy Clegg, GM's manufacturing and labor relations chief, and United Auto Workers Vice President Cindy Estrada, who handles negotiations with GM, are among those scheduled to attend. Demand for GM's full-size SUVs has been so strong that the plant can't make them fast enough. The Arlington factory has about 3,800 hourly workers on three shifts making the Chevrolet Tahoe and Suburban, GMC Yukon and the Cadillac Escalade. The plant has basically been running flat-out for the past two years, and additional hiring is expected.
Source: Associated Press
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Gen Y Just Behind X in Financial Stability, Earnings

Members of both age groups came of age during economic downturns

Although Millennials show slightly less economic stability and earn less money than Generation X, they typically borrow less than their immediate elders. That’s according to a report from FactorTrust, a provider of “under-banked” consumer data, analytics and credit scoring – much of it from non-traditional sources. Millennials, or Generation Y, 18 to 34, now make up the largest and most diverse generation in the U.S. population, and account for 33% of FactorTrust’s database of under-banked consumers. The group’s tendency to borrow less could in part stem from student-loan debts many Millennials carry, FactorTrust says. It cites an average college-related debt of $29,400.
Source: WardsAuto
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M-B Dealers Donate $100k for S.C. Scholarship Fund

The Mercedes-Benz Dealers of America board, along with a dealer in Charleston, S.C., is donating $100,000 to establish a scholarship fund for the families of the nine men and women killed in the mass shooting at a historic black church in Charleston last month. Tommy Baker, a long-time Mercedes-Benz dealer and owner of Baker Motor Company of Charleston, requested that the Mercedes-Benz dealer board earmark the remaining balance of its charitable fund, $91,469.55, to establish the scholarship fund. The board unanimously agreed to the donation, and Baker kicked in an additional $8,503.45 to bring the fund’s total to $100,000.
Source: Automotive News
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Quotable
"Consumers benefit tremendously from dealer discounts, so they deserve to know if these discounts are in danger of being unjustly and unfairly eliminated by overzealous Washington regulators."

    -- NADA President Peter Welch, commenting on the CFPB's stated “goal” of significantly limiting dealer discretion, NADA, July 14

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