View Web Version

SPONSORED BY
 
NADA.org
July 29, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
nada.orgAdvocacyAffiliates | Convention | Jobs | Programs | Publications | Services | Training

Inside this issue
House Committee Passes Bipartisan Bill to Repeal CFPB's Flawed Guidance on Auto Lending
Auto Associations Oppose Potential Used-Car Recall Amendment
Congressional Subcommittee Holds Hearing on DOL 'White Collar' Proposal
Fiat Chrysler Settlement Raises Questions for Dealers, Drivers
GM, Ford, Flourish Out of the Limelight
Average Age of Cars on U.S. Roads Breaks Record
Top Stories
House Committee Passes Bipartisan Bill to Repeal CFPB's Flawed Guidance on Auto Lending

NADA fully supports the nation’s fair lending laws and the commitment of federal agencies to ensure fairness in the marketplace.

Today, a U.S. House committee passed H.R. 1737, a bipartisan bill to repeal the Consumer Financial Protection Bureau’s (CFPB) flawed 2013 guidance designed to pressure lending institutions into eliminating auto financing discounts for car buyers.  

The bill, introduced by Reps. Frank Guinta (R-N.H.) and Ed Perlmutter (D-Colo.) and passed in committee by a vote of 47 to 10, which included 13 Democrats. It currently has 126 co-sponsors in the full House, which includes 70 Republicans and 56 Democrats.
 
“Discrimination in any form cannot be tolerated, and new-car dealers fully support the nation’s fair lending laws and the commitment of federal agencies to ensure fairness,” said Peter Welch, president of NADA. “But the CFPB’s policy of eliminating the ability of a consumer to get a discounted auto loan will restrict access to credit and hurt all consumers.”

“Congressmen Guinta and Perlmutter have shown great bipartisan leadership to repeal the CFPB’s flawed guidance on indirect auto financing and protect the right of consumers to find the best credit possible when purchasing their vehicles,” added Welch. “Consumers have the right to find the best loan possible when purchasing a vehicle, the right to negotiate and the right to seek a better deal – and Washington shouldn’t try to deny that right,” Welch added.

Rather than create new regulations, NADA, the National Association of Minority Auto Dealers and the American International Automobile Dealers Association have issued a compliance program for dealers that would address fair credit risks in the automotive marketplace. The program, which is based on an existing U.S. Department of Justice model, is superior to the CFPB’s approach, as it addresses fair credit risk without decreasing competition and harming consumers.

 
 
A study by Charles River Associates, commissioned by the American Financial Services Association, found that the CFPB’s proxy methodology to determine alleged unintentional discrimination overestimates the African-American population by 41 percent. The CFPB’s own “white paper” on this subject also revealed errors as high as 20 percent in estimating an individual’s ethnicity.
 
H.R. 1737 would produce a more informed process by requiring the CFPB to study the consumer impact of its policy to eliminate consumer discounts in dealer showrooms, mandating public input and transparency, as well as ensuring the bureau works in consultation with other government agencies that Congress vested with regulatory authority.
 
The CFPB’s guidance is urging auto lenders to move away from discountable compensation for auto dealers who arrange credit for their customers, and instead compensate dealers with non-negotiable payments like flat fees. If adopted by lenders, the policy would mean that consumers would no longer be able to negotiate a lower rate on credit with their dealer for their purchase. For millions of consumers, this would reduce access to lower interest rates on their auto loans.

Click here for NADA’s letter to House members to support H.R. 1737. For more information, visit www.nada.org/cfpb.

NADA represents more than 16,000 new-car and -truck dealerships, with about 32,000 domestic and international franchises.
Source: NADA

[back to top]

Auto Associations Oppose Potential Used-Car Recall Amendment

The National Automobile Dealers Association announced its fierce opposition of an amendment potentially headed for the Senate floor this week that would prohibit the retail sale of used vehicles with an open recall. The NADA as well as the American International Automobile Dealers Association and the National Association of Minority Automobile Dealers sent a joint letter to their senators on Monday to urge them to vote against the proposed amendment. According to the NADA, the amendment in question was officially filed by Sen. Richard Blumenthal (D-Conn.) and may come to the Senate floor for a vote as part of the transportation bill being voted on this Thursday. In the letter, the three organizations argued that the proposed legislation would “instantly diminish the value of millions of customer trade-ins while not guaranteeing that a single recalled vehicle gets fixed.”
Source: Auto Remarketing

Editor's note: The latest substitute for the Senate transportation bill does not include the Blumenthal used car amendment. However, negotiations continue behind closed doors. As the Senate starts to wrap up work on the bill in the next couple of days, NADA remains vigilant on this important issue. Dealers should continue to urge a "No" vote on the controversial Blumenthal amendment, explaining that it would instantly diminish the value of millions of customer trade-ins while not guaranteeing that a single recalled vehicle gets fixed.
Share: LinkedIn Twitter Facebook

[back to top]

Congressional Subcommittee Holds Hearing on DOL 'White Collar' Proposal

At a hearing on July 23, Chairman Tim Walberg (R-Mich.) of the House Workforce Protections Subcommittee called the Department of Labor’s (DOL) “white collar” overtime proposal “misguided.” The proposed rule, issued earlier this year, is aimed at reducing the ability of employers to exempt salaried workers from overtime. Chairman Walberg urged the administration to strive for a more balanced approach to strengthening employee safeguards.

NADA is evaluating the proposal’s potential impacts on dealerships and their employees.  The administration’s proposal would more than double the salary test threshold and would index that threshold to increase automatically over time. DOL is also considering changes to the duties tests for executive, administrative and professional employees. 

NADA has signed on to a coalition letter from the Partnership to Protect Workplace Opportunity to the leadership on the Subcommittee on Workforce Protections raising concerns related to the proposal. Click here to read the letter.
Source: NADA
Share: LinkedIn Twitter Facebook

[back to top]

Fiat Chrysler Settlement Raises Questions for Dealers, Drivers

After years of massive recalls by the auto industry, car dealerships and drivers are now trying to navigate the nation's largest-ever vehicle buyback by Fiat Chrysler. The Italian-American automaker could be required to lay out hundreds of millions of dollars to get potentially defective Ram pickups, Dodge and Chrysler SUVs, and older Jeeps off the road under a deal with safety regulators to settle claims that the company mishandled nearly two dozen recalls. Dealers and customers are awaiting more details from Fiat Chrysler on how the program will work. At least 30 Chrysler, Jeep and Dodge dealers in Maryland are preparing to field questions and concerns from customers, and for any fallout for their business. "This is significantly different than just a normal recall," said Peter Kitzmiller, president of the Maryland Automobile Dealers Association. Dealers "don't have any more specifics than anybody else yet."
Source: The Baltimore Sun

Related Stories:


Share: LinkedIn Twitter Facebook

[back to top]

GM, Ford, Flourish Out of the Limelight

As rivals battle for sales crown, U.S. car makers reap benefit of focusing on bottom line

A sharp earnings acceleration by the top U.S. auto makers through June is overshadowing Volkswagen AG ’s sweet success in finally capturing the global sales crown from Toyota Motor Corp. Rising U.S. demand for pickup trucks and sport-utility vehicles, spurred by lower gasoline prices, is propelling domestic margins at General Motors Co. and Ford Motor Co. to levels more typical of German luxury car makers. The wind is at Detroit’s back after its contraction last decade. Where the U.S. companies once were more focused on sales crowns, pumping out higher volumes at razor-thin margins, they now are flourishing by focusing on what customers want to buy.
Source: The Wall Street Journal

Related Stories:


Share: LinkedIn Twitter Facebook

[back to top]

Average Age of Cars on U.S. Roads Breaks Record

Improvements in vehicle quality have made cars more reliable, so consumers are less likely to scrap their vehicles when they buy new ones.

The average age of vehicles on the road in the U.S. is rising, even as consumers snap up more new vehicles -- a paradox attributable to substantial increases in reliability. The typical car on the road in the U.S. is a record-high 11.5 years old, according to a new IHS Automotive survey. Yet Americans are buying cars at an annualized rate of more than 17 million vehicles, marking a high not seen since before the Great Recession. How are vehicles getting older, while Americans are buying newer cars, too? Simple. Consumers are buying new vehicles at a faster pace and are less likely to scrap old cars that are still running fine. Know anyone who bought a new car and kept their old one in the driveway? That's what happened here.
Source: USA Today
Share: LinkedIn Twitter Facebook

[back to top]

More Articles
 
Quotable
"Discrimination in any form cannot be tolerated, and new-car dealers fully support the nation's fair lending laws and the commitment of federal agencies to ensure fairness. But the CFPB’s policy of eliminating the ability of a consumer to get a discounted auto loan will restrict access to credit and hurt all consumers."

   
-- NADA President Peter Welch, in a news release commenting on passage of H.R. 1737 today by a House committee vote of 47 to 10. 

Sponsored by

NADA Market Beat
NADA Raises 2015 Sales Forecast to 17.2 Million Light Vehicles
Chairman's Message
Commentary: NADA Refocuses on Core Services
Videos

NADA University Online: The Next Generation 
(NADA-TV)


Get the Facts: The Benefits of Franchised Auto Dealers


NADA Foundation: On the Go(Pro) with Canine Companions

 

Sponsored by


NADA Webinars
NADA members can view past webinars on-demand at no charge at NADA University Online. Member must create NADA account before viewing.
NADA Foundation News
Pacific Lutheran University Receives NADA Foundation Grants
 
 
Search Back Issues | Unsubscribe | Subscribe | Manage your subscription | email us
NADA For more information on NADA, visit www.nada.org or contact NADA, 8400 Westpark Drive, McLean, VA 22102. This email may contain an advertisement of NADA products and services. Any opinions or statements contained herein do not necessarily reflect the views of NADA. Factual errors are the responsibility of the listed publication. If you are a franchised new-car or -truck dealer and would like to become a member of NADA, please visit the Join NADA section of www.nada.org. Questions or comments concerning NADA Headlines content may be directed to publicaffairs@nada.org .