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August 25, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Attorneys Wonder if CFPB Would Win in Court
Market Slump Casts Shadow Over How U.S. Sales will Finish August
GM Compensation Fund Completes Review with 124 Deaths
U.S. Agency Probes Jeep SUV Rollaway Complaints
Toyota Tests Potential Alternatives to Takata Airbag Inflators
Auto Supplier Mergers, Acquisitions Hit Record Level
Lexus Rises to No. 1 in Customer Satisfaction Study
CPR Manikins Donated to Tucker Center
Top Stories
Attorneys Wonder if CFPB Would Win in Court

A federal regulator has won lending- discrimination settlements against two automotive finance companies. More filings might follow.

A government financial regulator that won dealer-related discrimination settlements against two major automotive lenders may go after more. So says attorney Gerald Sachs, who once worked for the federal regulator, the Consumer Financial Protection Bureau. It was created as a result of the Dodd-Frank financial reform act of 2010. Calling the CFPB “resolute” and on a “crusade,” Sachs, who served in its enforcement unit and now is in private practice, says: “They feel their mission is to protect consumers, so they are not going to back off filings.” CFPB Director Richard Cordray “has not backed down from his people’s filings,” he says.

At issue is the so-called dealer-reserve system in which auto lenders allow dealers to increase loan rates by varying percentage points as payment for acting as middlemen between lenders and car buyers. The CFPB has criticized that practice, saying it causes unintended discriminations of certain minorities. The bureau says its claims are supported by an analysis using surnames and zip codes to determine alleged lending disparity. But the methodology of the analysis has come under fire. In its complaint filings, the bureau has cited lenders, not dealers, because it has direct oversight over the former but not the latter.

Some [Automotive Resource Network conference] attendees say the CFPB is squeezing settlements from targeted lenders, but lacks evidence that would stand up in court. “If they ever took anyone to court, they’d be clobbered,” Randy Hendrick, general counsel for DealerTrack, says of the bureau.
Source: WardsAuto
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Market Slump Casts Shadow Over How U.S. Sales will Finish August

Slumping stock markets could make it tough for dealerships to hit their August targets for U.S. new-vehicle sales, rattling consumers who might be on the fence about making a big purchase. The broad declines in U.S. equity markets on Monday also pushed shares of General Motors and Ford to 52-week lows before rebounding. The market turbulence is badly timed for dealerships, which can close as many as 40 percent of their new-vehicle deals in the last week of a month. August results already were expected to be hindered by the fact that sales made over the long Labor Day weekend will count toward September’s tally this year. U.S. sales over the Labor Day holiday weekend have been included in August results since 2012.
Source: Automotive News
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GM Compensation Fund Completes Review with 124 Deaths

The compensation fund for those hurt or killed as a result of defective ignition switches in General Motors Co. cars said Monday it approved a final injury claim in wrapping up a nearly year-long review of almost 4,400 claims tied to defective switches in 2.6 million recalled vehicles. The final tally was 124 deaths, nearly 10 times more than the 13 deaths GM executives reported as the controversy unfolded in 2014. The fund also approved claims for 17 serious injuries and 258 less-serious injuries. In total, the fund run by Washington lawyer Ken Feinberg approved less than 10 percent of all claims.
Source: The Detroit News
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U.S. Agency Probes Jeep SUV Rollaway Complaints

U.S. auto safety regulators are investigating complaints that some newer Jeep SUVs can roll away unexpectedly after drivers put them in park. The probe covers 408,000 Grand Cherokees from the 2014 and 2015 model years. The National Highway Traffic Safety Administration said it has received 14 complaints from drivers, including five crashes and three injuries. NHTSA posted documents about the investigation on Monday.
Source: Associated Press
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Toyota Tests Potential Alternatives to Takata Airbag Inflators

Toyota Motor Corp. said it is testing airbag inflators made by Autoliv and Nippon Kayaku as possible alternatives to potentially lethal parts supplied by Takata Corp. Toyota said it wanted to ensure the parts were compatible with its vehicles before using them. Inflators "are not like stationery, which can be simply swapped. We need to test them first and make sure they're safe," a Toyota spokeswoman said. Swedish supplier Autoliv already supplies parts to Honda Motor Co.
Source: Reuters
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Auto Supplier Mergers, Acquisitions Hit Record Level

A new report says auto supplier mergers will hit an all-time high this year, surpassing the previous high set in 2007. Auto suppliers face rising development costs and cost pressure from automakers, which places more pressure on them to consolidate. Rising auto sales also have given some auto suppliers enough cash to make big deals. PwC says in a new study released Monday that supplier mergers and acquisitions will likely top $48 billion in 2015, easily overtaking the previous high in 2007 of $35 billion (measured in transactions closed within the calendar year). Excluding the major deals — above $500 million — the number of deals will remain approximately the same at 200 and with about $100 million in transaction value.
Source: The Detroit News
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Lexus Rises to No. 1 in Customer Satisfaction Study

Lexus overtook Mercedes-Benz to come out on top in a recent U.S. customer satisfaction study while recalls and rising prices across the industry are driving down average new-vehicle customer satisfaction scores. Industrywide, customer satisfaction fell 3.7 percent to 79 on a 100-point scale, the American Customer Satisfaction Index found in this year’s Automobiles Report, released [Monday]. That’s the lowest level of customer satisfaction ACSI has reported since 2004. ACSI’s annual Automobiles Report is based on customer evaluations of recently purchased automobiles from the largest automakers in terms of market share, plus an aggregate of smaller nameplates.
Source: Automotive News
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CPR Manikins Donated to Tucker Center

A donation of four CPR training manikins will help Council Bluffs students learn how to save lives. Rhoden Auto Center recently donated the Baby Anne training kit to the Tucker Career and College Center as part of the National Automobile Dealers Charitable Foundation Program. “The donation will certainly benefit our health science students at the Tucker Center as we prepare them for their field of study and, ultimately, the possibility of saving lives when the situation dictates,” said Cyle Forney, the center’s principal. The National Automobile Dealers Charitable Foundation works with local dealers across the U.S. to provide CPR training manikins to hospitals, police departments, fire departments and schools. It has donated more than 4,600 manikins since the program began in 1975.
Source: The Daily NonPareil (Council Bluffs, Iowa)
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"If they ever took anyone to court, they’d be clobbered."

   -- Randy Hendrick, general counsel for DealerTrack, commenting on the CFPB, WardsAuto, Aug. 25

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