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November 19, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Bipartisan CFPB Transparency Bill Passes House Overwhelmingly
U.S. House Passes Bill Revoking CFPB Auto Lending Guidance
CFPB Under Congressional Pressure And Increased Scrutiny
Blue Dogs Back Maintaining Affordable Auto Credit for Consumers
Ally Financial Honors 2016 TIME Dealer of the Year Nominees
Top Stories
Bipartisan CFPB Transparency Bill Passes House Overwhelmingly

Congress Rejects CFPB's Attempt to Eliminate Dealer Discounts in the Showroom

Democrats and Republicans joined forces in the U.S. House of Representatives on Wednesday to overwhelmingly pass legislation to protect consumers by bringing transparency and accountability to the Consumer Financial Protection Bureau's (CFPB) regulation of the auto finance market. H.R. 1737, the "Reforming CFPB Indirect Auto Financing Guidance Act," introduced by Reps. Frank Guinta (R-N.H.) and Ed Perlmutter (D-Colo.), passed on a 332-96 vote. 244 Republicans and 88 Democrats voted for the bill.

The Guinta-Perlmutter bill requires the Consumer Financial Protection Bureau (CFPB) to withdraw the flawed guidance that attempts to eliminate a dealer's ability to discount auto financing for consumers. The bill also requires the minimal safeguards the agency failed to follow, such as public participation and transparency. Nothing in the bill would restrict the CFPB's ability to enforce fair credit laws in auto financing. "The CFPB is clearly trying to eliminate a consumer's ability to receive a discount on credit in the showroom. It is reasonable for Congress to ask for minimal due process to protect consumers," said NADA president Peter K. Welch.

Yesterday’s 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 full house vote roll call. 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 U.S. Senate. Dealers should keep building congressional support for this measure. Visit www.nada.org/cfpb for more information.
Source: NADA

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U.S. House Passes Bill Revoking CFPB Auto Lending Guidance

A bill that would limit the U.S. Consumer Financial Protection Bureau’s 2013 auto lending guidance passed the House of Representatives late Wednesday by a 332-96 vote. H.R. 1737 -- the Reforming CFPB Indirect Auto Financing Guidance Act -- would revoke 2013 auto lending guidance from the CFPB. The guidance suggests lenders should either impose limits on or eliminate dealerships’ ability to adjust, on a case-by-case basis, the amount of compensation they keep for arranging a consumer auto loan, a discretionary practice that the CFPB says can lead to discriminatory loan pricing. The bureau oversees lenders but not dealers. Eighty-eight Democrats joined 244 Republicans in voting for the bill. Republicans were unanimous in support of the bill, while Democrats comprised all 96 of the “nay” votes. One Republican and four Democrats did not vote.
Source: Automotive News
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CFPB Under Congressional Pressure And Increased Scrutiny

The last 24 hours have likely been less than thrilling for the CFPB.

The House of Representatives has passed a bill that would limit the U.S. Consumer Financial Protection Bureau’s 2013 auto lending guidance. That guidance notes that lenders either need to impose limits on or eliminate dealerships’ abilities to adjust, on a case-by-case basis, the amount of compensation they keep for arranging a consumer auto loan (known as a dealer reserve). Dealer reserves are legal, but the CFPB says they can lead to discriminatory loan pricing. The CFPB can only regulate the lenders, as dealers are explicitly outside its purview. H.R. 1737 — the Reforming CFPB Indirect Auto Financing Guidance Act — would basically revoke the guidance.

Congress argues that the rule is a backdoor attempt for the CFPB to grab power over auto lending that it was statutorily denied, as dealer reserves are put onto loans by auto dealers, not auto lenders. The CFPB has no power over auto dealers — such power is explicitly denied to it — and so the rules essentially use the CFPB’s ability to fine a lender to leverage the lender into pressuring the dealers to drop the reserves. The bill, however, has a long road to becoming law. It is unclear if the Senate will upvote the bill, and even if it does, President Obama will more likely than not veto it, since his opposition to it is well-known.
Source: pymnts
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Blue Dogs Back Maintaining Affordable Auto Credit for Consumers

The Blue Dog Coalition overwhelmingly supports H.R. 1737, the Reforming the CFBP Indirect Auto Financing Guidance Act. The bill seeks to fix a problematic Consumer Financial Protection Bureau (CFPB) policy that would make it difficult for auto dealers to discount interest rates for their customers. As most consumers obtain financing credit through their car dealers, this policy could decrease competition and increase costs, hurting, rather than helping, consumers. “To effectively stop discrimination in consumer lending, the Bureau needs to be transparent in its methodology and rulemaking,” Congressman David Scott (GA-13) said. “The vague and opaque process used to create the Bureau’s guidance fails to address a real problem of discrimination. This bill will empower the bureau to help real victims and keep future costs down for all borrowers.”
Source: Blue Dog Coalition
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Ally Financial Honors 2016 TIME Dealer of the Year Nominees

Ally Financial is pleased to announce that 50 U.S. auto dealers have been selected as nominees for the 2016 TIME Dealer of the Year award. Now in its 47th year, this prestigious and highly coveted honor recognizes the nation's most successful auto dealers who also demonstrate a long-standing commitment to community service. These nominees are part of a select group of dealers from across the country that will be honored at the National Automobile Dealers Association (NADA) Convention & Expo in Las Vegas on April 1, 2016. The announcement of this year's nominees was made by Meredith Long, publisher, TIME, and Tim Russi, president of auto finance at Ally.

"The TIME Dealer of the Year award nominees are business leaders and pillars of their communities, who have each given generously to support important charitable causes," said Russi. "Ally is proud to honor these dealers, recognize their commitment to local communities, and share their stories of making a difference." In its fifth year as exclusive sponsor, Ally will recognize the 2016 nominees and their community efforts by contributing $1,000 to each dealer's 501(c)3 charity of choice.
Source: Ally

Editor's note: For more information and to register for the 2016 NADA Convention & Expo in Las Vegas, visit www.nadaconvention.org.
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Quotable
"The CFPB's action will raise credit costs for consumers. We commend Congressmen Guinta and Perlmutter for working on a bipartisan basis to protect car buyers."

    -- NADA President Peter Welch, commenting on the U.S. House of Representatives passing H.R. 1737 yesterday, NADA, Nov. 18

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