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January 26, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
IBD: Obama Prosecutors Making Up Victims Of Car-Lending Bias
American Banker: CFPB's Auto Finance Push Hurts Consumers
Why Companies Increasingly Fight Back Against the CFPB
Automakers, Dealerships in Recovery Mode After Historic Snowstorm
VW's Mueller Calls for New Emissions Tests
Takata Shares Hit Seven-Year Low, as Air-Bag Recalls Grow
Cities Need to Plan More for Autonomous Vehicles
Top Stories
IBD: Obama Prosecutors Making Up Victims Of Car-Lending Bias

Shakedown: New smoking-gun documents reveal the assumptions Obama’s race bullies make about lending discrimination while sifting through auto loan data are even wilder than the ones they make against mortgage lenders. Internal Consumer Financial Protection Bureau and Department of Justice memos and PowerPoint presentations obtained by the House banking committee, which is investigating the agencies for egregious abuses of power, prove that the Obama regime has been guessing the identities of hundreds of thousands of alleged victims of discrimination.

In fact, in order to distribute an $80 million settlement against Ally Bank — the biggest on record for the auto industry — the administration is literally just making up victims to meet the number prosecutors announced in the settlement two years ago. The government has had to send out more than 400,000 queries to Ally borrowers asking them if they are black or Hispanic. It has no idea who, if anybody, was harmed. The documents also reveal that the regime is bypassing anti-fraud safeguards to achieve its political goal of showing racism in auto lending. The result is that thousands of payment checks are being cut to non-victims, many of whom aren’t even minorities.
Source: Investor's Business Daily
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American Banker: CFPB's Auto Finance Push Hurts Consumers
By Blair Evans

The way the Consumer Financial Protection Bureau is regulating the auto finance industry's relationships with dealers is simply wrong — both legally and ethically. It's also directly counterproductive to its goal of protecting consumers. Congress, in its occasional wisdom and, in no small part, as the result of lobbying by the nation's auto dealers, specifically carved dealers out of the CFPB's scope of oversight. This apparently did not sit well with the CFPB — which, in a thinly veiled end-around move, attempts to supervise auto dealers through the banks and nonbanks that offer financing to dealers. In effect, since it does not have the statutory authority to do so itself, the CFPB is forcing auto lenders to police dealers. The lenders must oversee how dealers mark up loans and assess whether there is any discrimination.

The CFPB's focus on dealer markups likely will raise financing costs. If markups were eliminated, as the agency suggests, dealers would try to replace that revenue, and the inescapable outcome is that consumers will continue to be the source of any new revenue. No doubt the increased cost of the aforementioned compliance programs will be passed on to consumers too. Frankly, the agency's actions assume ignorance on the part of consumers that is presumptuous and offensive. If the goal of the CFPB is indeed protection of consumers, it has failed miserably.
Source: American Banker
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Why Companies Increasingly Fight Back Against the CFPB

The Consumer Financial Protection Bureau is receiving more pushback than fellow financial regulators from companies it hits with enforcement orders, likely as a result of the stronger wording the agency uses to publicize the actions. An increasing number of companies that have been cited by the CFPB are either challenging the agency in court or through public statements, even after signing a consent agreement. That is in contrast to how banks and other companies usually respond to actions by the prudential regulators, where firms rarely get publicly combative after agreeing to an order.

Industry observers say the reasoning may be due to how the CFPB promotes its enforcement actions. The agency's press releases frequently use tough language and even expound on the allegations cited in the agreement. Many firms, particularly nonbanks that may never have been regulated before, aren't used to that kind of treatment.

"There's a feeling in the industry that the CFPB consent orders, complaints and press releases are too one-sided and don't acknowledge efforts by companies that have made an effort to fix the problems," said Lucy Morris, a partner at Hudson Cook and a former deputy enforcement director at the CFPB. "The other aspect of this is that the bureau is still new and is testing its authority and not everyone agrees with that. Even companies that settle don't always agree with the way the CFPB is using its authority."
Source: American Banker
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Automakers, Dealerships in Recovery Mode After Historic Snowstorm

Manufacturers, dealerships and others in the auto industry find themselves digging out after the weekend’s historic snowstorm that pummeled the eastern U.S. with as much as 3 feet of snow. Winter Storm Jonas, which the National Weather Service said produced as much as 1 to 3 feet of snow from Kentucky to New York and coastal flooding as far south as South Carolina and Arkansas, led to several manufacturing plant closures beginning Friday and slowed sales at dealerships in the affected areas.
Source: Automotive News
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VW's Mueller Calls for New Emissions Tests

Volkswagen Group CEO Matthias Mueller called for emissions tests in Europe to be reworked to close the gap between laboratory and real-world results, an issue brought to public attention by the German car manufacturer's cheating scandal. The automaker admitted in September to rigging 11 million vehicles worldwide so that they could pass official tests while emitting illegal amounts of pollution on the roads. A recall of 8.5 million affected cars in Europe will begin this week, Mueller said Monday at a company reception in Brussels. "The industrywide discrepancies between official test results and actual usage is no longer tolerable," Mueller said, according to a statement from VW. "We, the industry, need to take a new path."
Source: Bloomberg

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Takata Shares Hit Seven-Year Low, as Air-Bag Recalls Grow

Recalls of Takata-made air bags set to expand by five million vehicles

Takata Corp. shares on Monday hit their lowest level since 2009 after U.S. regulators said recalls involving Takata-made air bags would expand by about five million vehicles, triggering concern over wider recall costs. Takata is meeting with auto makers this week and they are likely to discuss its financial condition, including how to split recall-related costs that could climb into the billions of dollars, two people briefed on the matter said. Honda Motor Co. plans to attend a meeting on Friday during which Takata will describe its business plans, Honda spokesman Ben Nakamura said, declining to give further details. Takata said in a written statement Monday that it hasn’t made a decision on whether to seek financial aid from auto makers.
Source: The Wall Street Journal
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Cities Need to Plan More for Autonomous Vehicles

With technologists racing to get autonomous-driven vehicles on the road in 10 years or less, America's urban planners need to resolve a host of questions about how cities will respond to the future of transportation. A new report from the National League of Cities finds only 6% of U.S. cities have devoted planning resources to figuring out changes needed to accommodate self-driving vehicles. And only 3% have studied the impact of on-demand transport services like Uber and Lyft, which function as alternatives to traditional taxi services. Yet 50% of cities' plans include explicit recommendations for new highway construction — dealing with auto congestion in the traditional way of adding more roads, more lanes and more parking garages to the urban landscape.
Source: Detroit Free Press
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Quotable
"With their meritless discrimination cases, they are jacking up the cost of auto loans for average Americans — including minorities with good credit."

   
-- Investor's Business Daily, in an editorial on the CFPB's distribution of Ally's $80M settlement to non-minority borrowers, Jan. 25

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