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Inside this issue
IBD: Congress Steps in to Save Auto Lenders
Senate Passes Bill Raising Automaker Fines to $105 Million
North America Leads Fiat Chrysler to 69% Profit Surge
EPA Strengthens Underground Storage Tank Requirements
BMW Drivers Get Paid $1,000 to Delay Charging i3 Electric Cars
Top Stories
IBD: Congress Steps in to Save Auto Lenders

Regulation: Congress just took a big step to end the Obama regime's illegal efforts to stampede auto lenders and dealers into adopting flat rates and fees on loans, which would deny car buyers millions in savings from discounts. In a bipartisan 47-10 vote, the House Financial Services Committee this week passed a bill to repeal faulty new guidelines that the Consumer Financial Protection Bureau slapped on the industry to prevent alleged discrimination in lending.

The CFPB assumes, without any proof to back it up, that loan pricing leads to "discrimination against minorities" — even though the terms of car loans are determined by objective, colorblind factors such as consumers' creditworthiness and willingness to shop around for deals. Under the Dodd-Frank Act that created it, the CFPB has no legislative mandate to regulate auto dealers. Its overreaching and its bullying of dealers has upset even Democrats, many of whom have to answer to franchised car dealers in their districts.

NADA argues that the CFPB's proxy methodology to determine alleged unintentional discrimination overestimates the African-American population by 41%. Equally flawed is its method for controlling for non-racial variables in comparing loan outcomes. It simply doesn't do that job. H.R. 1737, which has attracted 126 co-sponsors, now moves to the House floor for a final vote. If it's taken up in the Senate, the legislation could lead to a tough — and poetic — showdown between the president and his own party.
Source: Investor's Business Daily

Editor's note: The passage of H.R. 1737 was a major step forward for consumers and dealers and represents one of the first successful bipartisan efforts to push back against government overreach in the highly competitive auto lending market. Click here to see the committee vote. Please thank members of Congress who voted in favor of H.R. 1737.

NADA will continue its strong grassroots advocacy for CFPB reform on behalf of dealers and will press to have H.R. 1737 considered by the full House later this year. Dealers should keep building congressional support for this measure, particularly while Congress is home for the August recess. Click
here for a list of H.R. 1737 cosponsors. Click here for NADA's issue brief, and visit www.nada.org/cfpb for more information.
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Senate Passes Bill Raising Automaker Fines to $105 Million

The U.S. Senate passed legislation that will triple the maximum fines automakers pay for violations of motor-vehicle safety laws yet bypassed other measures sought by consumer groups. The new $105 million cap was part of a six-year surface transportation policy bill the Senate voted on Thursday. The measure also prohibits the rental of cars with unrepaired safety defects and proposes that dealers run a recall check when customers come in for routine service.

Senator John Thune, the Republican chairman of the Senate Commerce, Science and Transportation Committee, said the bill would advance auto safety, and incorporated changes suggested by Democrats, including increased funding for defect investigations at the National Highway Traffic Safety Administration. The final vote on the surface transportation bill was 65-34. The measure still must be approved by the House of Representatives and signed by the president before it would become law.
Source: Bloomberg

Editor's note: With Senate work on the multi year transportation bill completed, NADA is pleased that the Senate-passed bill does not include the Blumenthal used-car amendment to ground used cars under open recall. As action on a longer transportation bill moves to the House, NADA will remain vigilant working to defeat any Blumenthal-type amendment, since it would instantly diminish the value of millions of customer trade-ins while not guaranteeing that a single recalled vehicle gets fixed.

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North America Leads Fiat Chrysler to 69% Profit Surge

In the wake of unprecedented government fines and sanctions, Fiat Chrysler Automobiles NV on Thursday beat Wall Street expectations and reported second-quarter earnings of 333 million euros ($372.6 million). The 69 percent increase from a year ago is despite an 81 million euro ($90.6 million) charge related to a record $105 million agreement in connection to a government investigation into safety problems in 23 recall campaigns involving more than 11 million vehicles. North America led Fiat Chrysler’s results for the second quarter, with an operating profit of 1.3 billion euros ($1.5 billion).
Source: The Detroit News

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EPA Strengthens Underground Storage Tank Requirements

Effective October 13, 2015, a new U.S. Environmental Protection Agency (EPA) rule sets updated requirements for underground storage tanks (USTs) aimed at improving leak prevention and detection. EPA's actions should also serve to promote tank regulation uniformity across the U.S., close regulatory gaps, update technologies and incorporate the secondary containment and operator training requirements required by the Energy Policy Act of 2005. EPA's new rules preserve prior exclusions for lift cylinders and wastewater tanks. 
 
NADA recognizes that the majority of dealerships have removed unnecessary USTs and have replaced any remaining USTs with upgraded tanks and piping. EPA guidance on its rules is found here, and NADA intends to revise its A Dealer Guide to Underground Storage Tanks to reflect EPA's new rules. Questions or concerns can be directed to regulatoryaffairs@nada.org or 703.821.7040.  
Source: NADA Regulatory Affairs
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BMW Drivers Get Paid $1,000 to Delay Charging i3 Electric Cars

In a new pilot program, a California utility is paying drivers of BMW electric cars to delay charging their vehicles when the power grid is under pressure. One hundred owners of BMW AG’s i3 hatchback receive $1,000 upfront to participate in Pacific Gas & Electric Co.’s 18-month trial, which starts this week and is confined to the San Francisco Bay Area. The PG&E-BMW pilot is one of myriad experiments under way worldwide as utilities try to anticipate what will happen if (or when) millions of electric vehicles pour onto city streets and highways. Power companies see both challenge and promise.
Source: Bloomberg
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Quotable
“We are in execution mode.”

   
-- Fiat Chrysler CEO Sergio Marchionne, commenting on the automaker's 69% increase in profit from a year ago, The Detroit News, July 30 

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