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December 10, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Wall Street Journal Editorial: The Consumer Bureau Cover-Up
VW Chairman: Main Challenge is to Win Back Trust
Fiat Chrysler to Pay $70 Million U.S. Auto Safety Fine, Report Says
Captives See Share of New Loans Rise on Subvented Financing
Toyota, Honda Models Top Insurance Institute's Safest-Car List; VW is 3rd
Check It Off the List: Simple Reminders for Your Dealership's Smooth 2015 Year-End
Top Stories
Wall Street Journal Editorial: The Consumer Bureau Cover-Up

The feds knew their data showing racial bias was false but sued anyway.

Congressman David Scott recently lambasted the Consumer Financial Protection Bureau for its “deceitful” auto-loan regulation based on “shamefully flawed” information. Now it looks like the Georgia Democrat was being kind.

The Republican staff of the House Financial Services Committee has released a trove of documents showing that bureau officials knew their information was flawed and even deliberated on ways to prevent people outside the bureau from learning how flawed it was.

The bureau has been guessing the race and ethnicity of car-loan borrowers based on their last names and addresses—and then suing banks whenever it looks like the people the government guesses are white seem to be getting a better deal than the people it guesses are minorities. This largely fact-free prosecutorial method is the reason a bipartisan House supermajority recently voted to roll back the bureau’s auto-loan rules.

The vote occurred before the release of the House committee report, which shows that the regulators were guessing and knew that they weren’t even making good guesses. A May 2013 draft of a memo for bureau Director Richard Cordray prepared by bureau staff including Assistant Director Patrice Ficklin reported they had “reason to believe that our proxy is less accurate in identifying the race/ethnicity of particular individuals than some proprietary proxy methods that use nonpublic data.”

A draft version of the memo also noted that if the bureau never publicly released the details of how it was guessing the race of borrowers, “our internal methodological deliberations will not be discoverable.” In other words, the law-abiding taxpayers getting sued by the bureau would not be able to learn how bogus its discrimination claims were.
Source: The Wall Street Journal

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VW Chairman: Main Challenge is to Win Back Trust

Embattled German automaker Volkswagen said Thursday it was making "good progress" with its emissions investigations and is working hard to win back the trust of customers and shareholders. Supervisory board members gathered in Wolfsburg, Germany, to review the findings of an internal probe. VW said that it had widened its investigations to deal with the diesel emissions scandal as well as claims that it had also understated CO2 levels in its products.
Source: CNBC

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Fiat Chrysler to Pay $70 Million U.S. Auto Safety Fine, Report Says

Fiat Chrysler Automobiles has agreed to pay $70 million in fines to resolve a U.S. investigation that it failed to disclose vehicle crash death and injury reports, sources told Reuters. The settlement is expected to be announced by the National Highway Traffic Safety Administration as early as Thursday.
Source: Reuters
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Captives See Share of New Loans Rise on Subvented Financing

Captive finance companies’ share of the new-vehicle loan market continues to rise, thanks to subvented loans and cash incentives from their automaker parents. Captives financed 51.62 percent of all new-vehicle loan originations in the third quarter, up from 50.18 percent a year earlier, Experian data show. That also marked a sharp jump from 36.83 percent in the third quarter of 2011. For new-vehicle loans and leases combined, captives’ share reached 64.5 percent during the third quarter of this year, J.D. Power data show. That’s up 11 percentage points from the third quarter of 2011.
Source: Automotive News
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Toyota, Honda Models Top Insurance Institute's Safest-Car List; VW is 3rd

Toyota Motor Corp., Honda Motor Co. and Volkswagen AG had the most models rated among the safest U.S. vehicles in a year-end review by the Insurance Institute for Highway Safety. Toyota led the industry with nine models on the institute’s list, followed by Honda with eight and VW with seven. Fiat Chrysler Automobiles had the only U.S.-made car on the list, the Chrysler 200 midsize sedan. A total of 48 car and SUVs got the institute’s safest car designation of “top safety pick plus.”
Source: Bloomberg
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Check It Off the List: Simple Reminders for Your Dealership's Smooth 2015 Year-End

Is the thought of a chaotic year-end getting you down? Sometimes a simple set of reminders that brings you back to the basics can be the cornerstone to successfully closing your calendar year. There’s no question that it’s that time – when the fourth quarter arrives and the reality of everything you and your dealership personnel need to complete while ringing in the New Year starts to sink in. Fortunately there are a variety of items in your control that, if approached punctually and methodically, can help deconstruct an otherwise cumbersome process. Through proper planning, you can simplify your year-end responsibilities into one-by-one “check it off the list” tasks that will not only make your life easier, but may even save you and your dealership dollars. Click here for the “Top 10 List” of tax and audit review items.
Source: Dixon Hughes Goodman LLP
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Quotable
"Good enough for government work? Remember, [the CFPB’s] fraud was used not only to smear the reputations of law-abiding businesses but also to seek hundreds of millions of dollars in settlements."

    -- A Wall Street Journal editorial criticizing the Consumer Financial Protection Bureau's methodology and data in determining alleged racial bias in auto lending, The Wall Street Journal, Dec. 9  

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