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October 1, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Dealers: U.S., Fifth Third Settlement Over Lending Bias to Curb Consumer Savings
Before CFPB Crackdown, How About Some Guidance?
REMINDER: 'Do-Not-Call' Registration Requirement; FTC Announces No Increase in Registration Fees for FY 2016
The Other Victims of the Volkswagen Scandal: Dealers
Illegal VW Diesel Emission Systems May Require Two Solutions
Jaguar Land Rover Committed to Offering Diesels in U.S.
Fisker Automotive Reveals New Name And Logo
Top Stories
Dealers: U.S., Fifth Third Settlement Over Lending Bias to Curb Consumer Savings

National dealer associations are criticizing the government’s settlement with Fifth Third Bancorp over alleged discriminatory auto lending practices, claiming dealers who work with the bank will now be limited in offering consumers competitive interest rates on auto loans. As part of the settlement, Fifth Third agreed to limit dealer reserve to 1.25 percent above its wholesale buy rate on an auto loan. Previously it had allowed dealerships up to 2.5 percent in reserve. Dealers have long maintained that the reserve allows them the flexibility to offer rate discounts on auto loans.

As a result of the settlement, “consumers will lose as much as 1.25 percent of available savings on their loans,” the National Automobile Dealers Association, National Association of Minority Automobile Dealers and the American International Automobile Dealers Association said in a joint statement on Tuesday.

In the dealer groups’ statement on Tuesday, NAMAD President Damon Lester pointed to the Fair Credit Compliance Policy & Program developed by the three groups as a “viable solution to both protect consumers and provide fairness to dealers.” The Fair Credit Compliance Program recommends dealerships adopt a set method for determining the amount of compensation they earn for arranging customer financing.
Source: Automotive News

Editor's note: Click here to download the NADA/NAMAD/AIADA Fair Credit Compliance Policy & Program.
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Before CFPB Crackdown, How About Some Guidance?

Before the Consumer Financial Protection Bureau cracks down on auto lenders, it should offer guidance on what its dealer reserve standards are. The American Honda Finance Corp. settlement and recent Fifth Third Bancorp settlement with the CFPB and U.S. Department of Justice have the same dealer reserve limitations: a cap of 1.25 percent for loans lasting 60 months or fewer and 1 percent for loan terms longer than 60 months. But shouldn’t auto lenders be aware of what the CFPB is going for before hearing about their competitors’ settlements? During the CFPB’s semiannual reporting session to the U.S. House Financial Services Committee held on Tuesday, Rep. Sean Duffy, R-Wis., told CFPB Director Richard Cordray that it is important for regulators to outline clear auto lending rules.
Source: Automotive News
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REMINDER: 'Do-Not-Call' Registration Requirement; FTC Announces No Increase in Registration Fees for FY 2016

Before making any telemarketing call (or having one made on your behalf), you generally must ensure that the number called is not contained on the National “Do-Not-Call” (DNC) registry. As a reminder, any dealer seeking to access the DNC registry must first register with the Federal Trade Commission and, if applicable, must annually pay the associated fees. The FTC announced that the DNC annual registration fee will remain the same for FY 2016. The cost for each area code of data will remain $60, and the maximum amount that will be charged to any single entity for accessing area codes of data will continue to be $16,482. Dealers who wish to have access to only five or fewer registered area codes from the DNC registry are exempt from the fee requirement (but must still register with the FTC). Dealerships that register six or more area codes must pay the fee when they renew their current subscription accounts. Click here for more information.
Source: FTC

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The Other Victims of the Volkswagen Scandal: Dealers

The recent Volkswagen scandal has not only angered many of its customers, it is also threatening the prospects of hundreds of dealerships around the country that are anxious to learn how to fix diesel cars that intentionally thwart emissions tests. And it is happening at a delicate time for Volkswagen and its 650 dealers in the United States, where sales have slumped in recent years while the domestic car market rebounded. For several years, American dealers complained to Volkswagen that it was offering the wrong cars for the domestic market and that its prices were too high compared with its rivals. But the appointment last year of a new German top executive in the United States, along with a major commitment to build a new sport utility vehicle for the American market by next year, had raised hope among dealers that they could turn their fortunes around. Instead, the dealers are on the front line of a controversy that has tarnished the carmaker’s reputation and could undermine sales.
Source: The New York Times
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Illegal VW Diesel Emission Systems May Require Two Solutions

Volkswagen AG 's promise to fix pollution control systems on about 11 million diesel vehicles will involve changes to software, and possibly hardware, that could leave owners with cars that deliver diminished fuel economy and performance or require more maintenance, experts said Tuesday. The German automaker's new chief executive, Matthias Mueller, said Tuesday VW customers would need to have those diesel cars "refitted." The company did not specify what the refitting might entail. Some analysts have said the job could cost more than $6.5 billion.
Source: Reuters

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Jaguar Land Rover Committed to Offering Diesels in U.S.

The timing is terrible, but Jaguar Land Rover North America has begun selling its first diesel-equipped vehicles in the U.S. and has no plans to change its strategy of rolling out the engine choice across its lineup over the next few years, said CEO Joe Eberhardt. The Range Rover and the Range Rover Sport went on sale in the U.S. with a optional diesel engine two weeks ago -- the day the story broke that Volkswagen has been cheating on its emissions testing, which allowed the sale of vehicles that spew 40 times more pollutants than the legal limit.
Source: Detroit Free Press

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Fisker Automotive Reveals New Name And Logo

Fisker Automotive and Technology Group announced a name change today to Karma Automotive. The company also launched its new website, including a video that reveals its new logo at karmaautomotive.com. "With new ownership, a new management team, and a new production site, all here in California, it was time to communicate change," said James Taylor, Karma's Chief Marketing Officer. "Karma" was chosen because it is relevant to both the old and new brands, while providing an aspirational message which embodies the company's purpose.
Source: Reuters
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Quotable
The NADA/NAMAD/AIADA Fair Credit Compliance Policy & Program is a "viable solution to both protect consumers and provide fairness to dealers."

   --- NAMAD President Damon Lester, in a statement criticizing the CFPB’s settlement with Fifth Third Bancorp over allegations of disparate-impact discrimination, Automotive News, Sept. 30

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