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January 27, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Forbes: U.S. Consumer Watchdog To Hand Out Money; Trouble Is, Who Gets It
Toyota Stays No. 1 Automaker, Sells 10.15M Vehicles in 2015
Major Changes Expected for Fiat Chryslerís 5-Year Plan
Bosch Probes Whether its Staff Helped VW's Emissions Rigging
RESCHEDULED: 'Increase Profit Through Smarter Advertising' Webinar
Top Stories
Forbes: U.S. Consumer Watchdog To Hand Out Money; Trouble Is, Who Gets It
By Jim Henry

The Consumer Financial Protection Bureau is having trouble giving away money. The latest controversy between the consumer watchdog agency and its mostly Republican critics in Congress involves an $80 million settlement Ally Financial Inc. paid back in late 2013. Ally paid the money, plus a civil penalty of $18 million, to settle charges from the CFPB and the U.S. Department of Justice that Ally allowed dealers to charge higher interest rates from minority auto loan customers. Ally settled, though the lender denied at the time that it tolerated discrimination, and that any discrimination had taken place. The CFPB said the $80 million would be used to reimburse an estimated 235,000 borrowers, who according to the feds were overcharged an average of $200 to $300 each, over the life of their loans.

Today’s controversy, involving the CFPB and the House Financial Services Committee, led by Chairman Jeb Hensarling (R-Texas), kicked in recently when the CFPB finally tried to start doling the money out, through an administrator. The central question is who, exactly, gets the money. Identifying minority borrowers is harder than it sounds. Unlike mortgage lenders, auto lenders aren’t allowed to collect racial or ethnic identities for their borrowers, so auto lenders can’t simply look it up on the customer’s loan documents. To identify discrimination, the CFPB uses customer names, and census data for where they live, to assign a statistical probability whether a particular customer belongs to a minority group. Other regulators, and for that matter the lenders themselves, use similar methods. The CFPB’s critics argue that’s not precise enough.

In the case of the Ally Financial settlement, the CFPB sent forms last fall to borrowers it identified as likely to belong to minority groups, who got loans from Ally in the affected time period. In effect, the forms leave it up to the recipients themselves to say whether they belong to a minority group. Last week, the Republican majority staff for the House Financial Services Committee published a scathing report citing what report says are internal CFPB documents. The report says the CFPB purposely chose a lower standard for certifying minority borrowers, to try and reach the greatest number possible, even though as a result, a greater number of unqualified borrowers would also receive money. Hensarling wrote to U.S. Attorney Loretta Lynch, saying the CFPB’s approach “invites fraud on a massive scale.” Rather, Hensarling said borrowers should have to verify their eligibility to receive the money, “in writing under penalty of perjury.”
Source: Forbes
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Toyota Stays No. 1 Automaker, Sells 10.15M Vehicles in 2015

Toyota Motor Corp. said Wednesday it sold 10.151 million vehicles in 2015, retaining its status as the world's top-selling automaker for the fourth straight year. The sales figure compared with 2015 sales of 9.93 million vehicles for Volkswagen AG and 9.8 million for General Motors. Toyota, which makes the Prius hybrid, Camry sedan and Lexus luxury models, has forecast sales at 10.114 million vehicles in 2016. Its actual sales in 2015 beat its forecast for sales of 10.098 million vehicles. Volkswagen AG, which overtook Toyota in sales in the first half of the year, suffered in the second half from an emissions cheating scandal involving diesel cars.
Source: Associated Press

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Major Changes Expected for Fiat Chryslerís 5-Year Plan

Fiat Chrysler Automobiles NV CEO Sergio Marchionne will unveil a revised master plan on Wednesday that is expected to reshape the automaker’s vehicle portfolio and significantly shift manufacturing operations in the United States. Industry experts from the Motor City and Wall Street to Italy expect the altered 2014-2018 plan to concentrate more heavily on Fiat Chrysler’s thriving Jeep brand and North American operations, while lowering expectations for the renaissance of Italian luxury brand Alfa Romeo and emerging markets such as Brazil.
Source: The Detroit News

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Bosch Probes Whether its Staff Helped VW's Emissions Rigging

Robert Bosch is carrying out an internal probe to investigate whether any of its staff were involved in Volkswagen's rigging of emissions tests, the supplier's CEO, Volkmar Denner, said. However, VW bears the responsibility for its emissions-cheating scandal and not suppliers or diesel technology, Denner said at a press briefing at the supplier's headquarters on Tuesday. Bosch said in September that it supplied control components for VW engines implicated in emissions rigging. Prosecutors in the U.S. and Germany are looking into whether the partsmaker helped VW to cheat on emissions tests.
Source: Automotive News

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RESCHEDULED: 'Increase Profit Through Smarter Advertising' Webinar

Today's NADA webinar has been rescheduled for Wednesday, Feb. 10 at 1 p.m. ET. The webinar -- "Increase Profit Through Smarter Advertising" -- will discuss how to how to attract high quality, profitable sales leads. Presenter Adam Armbruster, senior partner at ESA & Company, will show examples of successful dealerships and how attendees can create a customized growth plan for their business. Click here to register.
Source: NADA
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Quotable
The CFPB's approach "invites fraud on a massive scale."

   
-- House Financial Services Committee Chairman Jeb Hensarling (R-Texas), on the CFPB's method of distributing Ally Financial's $80M settlement, Forbes, Jan. 26

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