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December 2, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
New Video: Industry Leaders Convene at AutoConference LA
U.S. News: Take Away the CFPB's Keys
Five-Year Highway Bill Proposed, with Higher Auto Fines
New Car Sales November 2015: Hyundai, Kia Report Strongest Sales Growth While Ford F-150 Has Record Month
DOT's Foxx Convenes 15 Auto Executives to Discuss Safety Issues
Early-Bird Registration Discount for NADA Convention Ends Dec. 4
Top Stories
New Video: Industry Leaders Convene at AutoConference LA



More than 300 industry executives attended AutoConference LA, which preceded press days at the Los Angeles Auto Show. The keynote speakers were Bill Fay, Toyota division group vice president and general manager at Toyota Motor Sales U.S.A., and Scott Keogh, president of Audi of America; as well as Bill Fox, NADA chairman; Finbarr O’Neill, J.D. Power president; and Peter Welch, NADA president.

"I especially want to thank our Toyota dealers who joined here today," Fay said at the half-day conference, which was presented by NADA and J.D. Power. "They've made Toyota the No. 1 retail brand in California for 15 consecutive years."

Other speakers included Steven Szakaly, NADA chief economist; John Humphrey, senior vice president of the global automotive practice at J.D. Power; Alexi Venneri, CEO of Digital Air Strike; AutoNation’s Marc Cannon and Famous Rhodes; and Steve Lind, president of Kelley Blue Book and others. Click here to watch the video.

For more information about future conferences and sponsorship opportunities, contact Albert Gallegos with NADA Industry Affairs at agallegos@nada.org or call 703.821.4612.
Source: NADA
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U.S. News: Take Away the CFPB's Keys
By Peter Roff

The Consumer Protection Bureau's plans for auto loans show just how out of control it is.

If all you knew about Mr. Brown was his surname, sex and zip code, do you think you could tell if he was black or white? The Consumer Financial Protection Bureau thinks it can – which is just one more reason it should be abolished. The regulatory frenzy that accompanied President Barack Obama's first two years in office produced an awful lot of bad law, the worst perhaps being the massive Dodd-Frank legislation that was supposed to fix what was wrong on Wall Street and with the big banks. It didn't. If anything it made things worse, especially through the establishment of the badly misnamed Consumer Financial Protection Bureau, which is supposed to protect borrowers from predatory lenders but is instead driving up the cost of borrowing money for everybody without doing anything to appreciably reduce the risk to anybody.

The CFPB, when it's not busy taking advice from the same so-called consumer non-profits that helped engineer the housing bubble with their sub-prime lending schemes, now wants to stop auto dealers from being able to give loan discounts to car buyers on the grounds that they have up to now been doing it in a discriminatory fashion. Going through the dealer provides an opportunity to save some money on the back end. The dealership has a software system that in seconds can float a customer's credit application to dozens of lenders. And dealers usually have access to better rates than an individual consumer can get on their own because of the volume of business they do and because they have access to more lenders than you or I typically have. Sometimes they can even tap into promotional financing through a manufacturer -- think Ford Finance or Honda Motor Credit – which the local bank can't touch. This means that dealership rates are usually better -- even though dealers are compensated by lenders for arranging the financing.

The CFPB wants the discounting practice to stop because it believes it creates a risk to fair credit. It says, in theory, that the folks with higher credit scores are the ones getting discounts – which one might expect – but also that a disproportionate share of those people are white. In order to make its case, to provide the "evidence" that discrimination existed, the CFPB fell back on the practice of statistical modeling by matching last names with zip codes in order to make an educated guess about the race of someone attempting to finance the purchase of a new car.

Even the CFPB, while pushing Congress to change the law, recognized this was an absurd way to evaluate data, although it didn't tell anybody. It took The American Banker's publishing of internal CFPB memos that had at least one senior official suggesting the policy had been pursued though "there may be some risk of overestimating disparities" to bring that to light. Fortunately, the Congress is on the ball. The House passed a bill that smacked the CFPB hard, ordering it to ensure that a cost impact and other real studies are conducted before this kind of policy can take effect. It further ordered the implementation of a transparent process where the agency must share how it comes to these conclusions and take comments from those potentially affected by its regulatory proposals before it can act. Which isn't exactly radical despite what some critics of the legislation say; it just puts on the CFPB the same requirements already in place on the rest of the regulatory state and its agencies.
Source: U.S. News & World Report
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Five-Year Highway Bill Proposed, with Higher Auto Fines

Legislation also increases cap on rail accidents, makes way for improvements to auto safety recalls

With the latest highway spending patch set to expire Friday, U.S. House and Senate negotiators unveiled a five-year road and bridge bill that for the first time in years could reduce uncertainty for states and communities counting on federal infrastructure funds. The legislation — which would spend about $300 billion and be funded, in part, by an infusion in cash from a surplus maintained by the Federal Reserve — would also triple the cap on fines against automakers found to violate motor vehicle safety laws from $35 million to $105 million, and call for other improvements in the nation’s system of alerting drivers to safety recalls. The measure now goes to both chambers where it is expected to pass on up or down votes and be sent to President Barack Obama for his signature, which is expected even though his administration had asked for $400 million to be committed to a multiyear transportation bill. Besides the increased cap on auto safety violations — a proposal which gained traction in the wake of recalls, including one at General Motors for a faulty ignition switch which resulted in at least 124 deaths — the legislation included several other provisions involving auto safety, including one that restricts the renting of cars with open safety recalls.
Source: Detroit Free Press

Editor's note: Congress is expected to pass the House – Senate conference report on the transportation bill as early as this Saturday. The conference report would clarify that new requirements on rental cars (which include dealer loaners) would only apply to companies with an average of 35 or more vehicles. This negotiated language is a direct result of the House-passed amendment to help protect dealer loaners.

The Senate passed its transportation bill in July that would ground all recalled vehicles for dealer loaner fleets of five or more. The House-passed bill included an NADA-backed amendment that would limit the provision to rental car companies, not dealers. A small business modification was needed because the Senate bill was overbroad and designed for major rental car companies with large fleets.
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New Car Sales November 2015: Hyundai, Kia Report Strongest Sales Growth While Ford F-150 Has Record Month

Americans flocked to buy crossovers and SUVs in unprecedented numbers last month, helping to push annualized car sales above 18 million for the third consecutive month this year. U.S. vehicle sales are on track for their highest November volume since 2001. Hyundai, Kia and Nissan posted the strongest sales increases, while Toyota, Fiat Chrysler and General Motors eked out modest gains. Ford’s sales were flat despite record sales of its trucks and vans, while Honda’s sales dropped as consumers pivoted to more attractive utility vehicle offers from rivals. At the bottom: Volkswagen, whose longstanding challenges in the U.S. market were worsened by the scandal surrounding its so-called “clean diesel” cars. “There’s a lot of competition for manufacturers to push their sales numbers to the end of the year,” said Steven Szakaly, chief economist for the National Automobile Dealers Association. Carmakers tend to increase sales specials in the last months of the year in an effort to best one another in annual sales growth. “It would make sense to take advantage of any opportunity between Labor Day and the holidays.”
Source: International Business Times
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DOT's Foxx Convenes 15 Auto Executives to Discuss Safety Issues

Senior executives from 15 automakers met Tuesday with U.S. Transportation Secretary Anthony Foxx to discuss broad improvements to auto safety after several major defect crises have tarnished the industry’s reputation in recent years. In a statement, DOT Press Secretary Namrata Kolachalam called the meeting “very productive” and said the group would reconvene in January. Cybersecurity issues were also discussed, though specific possible safety and cybersecurity initiatives weren’t disclosed. The meeting, held at DOT headquarters in Washington, was called by Foxx to address his concern that “the public has lost faith in the auto industry’s commitment to safety,” Foxx said in a Nov. 3 letter inviting an executive to the summit obtained by Automotive News.
Source: Automotive News
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Early-Bird Registration Discount for NADA Convention Ends Dec. 4

For dealers and their managers planning to attend the 2016 NADA Convention & Expo in Las Vegas, this is the final week to receive the early-bird rate—a $100 discount from the onsite registration rate. Because of the Thanksgiving holiday, the early-bird discount rate was extended to Friday, December 4.

As one of the most popular destinations in the country for meetings and conventions, the popular hotels in Las Vegas are filling up quickly. The NADA convention, which runs from Thursday, March 31, through Sunday, April 3, will be held at the Las Vegas Convention Center.

Considered the “Automotive Industry Event of the Year,” the NADA convention includes keynote speakers and entertainers, dealer-manufacturer franchise meetings, new educational workshops for dealers and managers, hundreds of exhibitors on the expo floor showcasing the latest equipment, services and technologies for dealerships and numerous networking events.

Dealers and their managers who register by Friday, December 4, will receive the early-bird rate—a $100 discount from the onsite registration rate. For more information or to register, visit www.nadaconvention.org/register.
Source: NADA

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More Articles
 
Quotable
"If you want to argue discrimination, you should have to prove actual discrimination – not just submit a statistical model that is vulnerable to the "garbage in, garbage out" defect. Hopefully other regulatory agencies will get the message."

    -- Peter Roff, contributing editor at U.S. News & World Report, on how the CFPB needs to be more transparent and accountable when issuing auto finance guidance, Dec. 2

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