View Web Version

SPONSORED BY
 
NADA.org
February 8, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Obama Bullied Bank to Pay Racial Settlement Without Proof
The Rogue Regulator
Volkswagen to Offer Generous Compensation for U.S. Customers
VW Dealership Valuations Slide; Some Smell Opportunity
Recalled Cars Create a Costly Problem for U.S. Auto Dealers
Premium Brands Face Challenges as Incentives Rise and Trucks Rule the Day
Ford to More Than Double Mexico Production Capacity in 2018
Top Stories
Obama Bullied Bank to Pay Racial Settlement Without Proof

Newly uncovered internal memos reveal the Obama administration knowingly exaggerated charges of racial discrimination in probes of Ally Bank and other defendants in the $900 billion car-lending business as part of a “racial justice” campaign that’s looking more like a massive government extortion and shakedown operation. So far, Obama’s Consumer Financial Protection Bureau has reached more than $220 million in settlements with several auto lenders since the agency launched its anti-discrimination crusade against the industry in 2013. Several other banks are under active investigation. That’s despite the fact that the CFPB had no actual complaints of racial discrimination — it was all just based on half-baked statistics.

A confidential 23-page internal report detailing CFPB’s strategy for going after lenders shows why these companies are forking over millions of dollars in restitution and fines to the government despite denying any wrongdoing. The high-level memo, sent by top CFPB civil-rights prosecutors to the bureau’s director and revealed by a House committee, admits their methods for proving discrimination were seriously flawed from the start and had little chance of holding up in court. Yet they figured they could muscle Ally, as well as future defendants, with threats and intimidation.
Source: New York Post

Share: LinkedIn Twitter Facebook

[back to top]

The Rogue Regulator

The CFPB's unfair, deceptive, and abusive activities.

A last-minute amendment to Dodd-Frank explicitly barred the CFPB from regulating or suing car dealers, … But Elizabeth Warren— whose advocacy for the consumer agency led to her becoming its first leader and then a United States senator — has never accepted this defeat. Nor have the lawyers she recruited to run the bureau, who launched a campaign to regulate car dealers shortly after the agency's birth.

[F]air treatment of financial service providers is not the mission of the CFPB, a consumer advocacy organization masquerading as a federal regulator. In March 2013, the bureau bypassed the administrative rulemaking process by issuing "guidance" that contained the thinly veiled threat of expensive discrimination lawsuits against finance companies that continued to "allow" dealers the "discretion" to negotiate retail interest rates with their own customers. The industry brushed off the guidance's advice to adopt fixed pricing; the CFPB sought to make good on its threat...

The CFPB was, and continues to be, deceptive about its proxy methodology's precision. In internal memoranda, agency lawyers described the model as "less accurate in identifying the race/ethnicity of particular individuals" than other available methods. To prevent independent analysis of the model, the CFPB refused, for almost two years, to reveal its mathematical formulas and testing data. Finally, under pressure from the Department of Justice, the CFPB released some, but not all, details of the methodology...

The revelations of the CFPB's unfair, deceptive, and abusive activities have created such outrage that a bill to stop the bureau's assault on auto lenders easily passed in the House, with significant Democratic support. In the Senate the legislation may survive Elizabeth Warren's fervent opposition. The episode could even result in the CFPB being restructured as a bipartisan commission, exposing the regulator's operations to some much-needed sunlight.
Source: The Weekly Standard

Share: LinkedIn Twitter Facebook

[back to top]

Volkswagen to Offer Generous Compensation for U.S. Customers

Volkswagen will offer generous compensation packages to the roughly 600,000 U.S. owners of diesel vehicles whose emissions are over the legal limit, the head of its claims fund told a German paper. The German car maker has still not decided whether vehicle owners will be offered cash, car buy-backs, repairs or replacement cars, Kenneth Feinberg told the Frankfurter Allgemeine Sonntagszeitung.
Source: Reuters

Share: LinkedIn Twitter Facebook

[back to top]

VW Dealership Valuations Slide; Some Smell Opportunity

Volkswagen's diesel scandal has dinged the company's sales, profits and image. Now, as the scandal enters its sixth month with few signs of a resolution, the effects are trickling down to the value of its U.S. dealerships. Dealer buy-sell experts say Volkswagen's sagging sales, worsened by the sales freeze on new diesel models, are dragging down dealerships' earnings and their blue sky values, the intangible value of a store beyond its physical assets.
Source: Automotive News

Share: LinkedIn Twitter Facebook

[back to top]

Recalled Cars Create a Costly Problem for U.S. Auto Dealers

Honda Motor Co's order that its U.S. dealers stop selling some 2.2 million of the automakers' most popular models is compounding financial and regulatory headaches for car dealers stuck with millions of vehicles that have potentially hazardous air bags or other safety defects. With the recalls affecting Honda vehicles dating back several years, used-car dealers are facing increased pressure. It is legal under federal law to sell used cars with unrepaired safety defects that are subject to recall, but dealers that operate under franchises with manufacturers could be violating those agreements. It is illegal to sell new cars that are subject to a recall under federal law.
Source: Reuters

Share: LinkedIn Twitter Facebook

[back to top]

Premium Brands Face Challenges as Incentives Rise and Trucks Rule the Day

As 2016 gets rolling, luxury auto sales are slowing, incentives are rising and trucks are dominating. Though U.S. luxury-brand sales dropped 3.5 percent in January, many luxury-brand executives forecast sales increases for the segment in 2016. But they expect growth will slow even as incentives rise.
Source: Automotive News

Share: LinkedIn Twitter Facebook

[back to top]

Ford to More Than Double Mexico Production Capacity in 2018

Auto maker will build new plant in Mexico, expand existing factory

Ford Motor Co. will build a new assembly plant in Mexico and sharply increase factory output from that country, representing the latest shift of investment abroad by a Detroit auto maker following the signing of a costly new labor deal. The No. 2 light-vehicle seller in the U.S. plans to add 500,000 units of annual Mexican capacity starting in 2018, more than double what it built in 2015, according to people briefed on the plan. The plan mirrors General Motors Co. ’s $5 billion investment to double Mexican capacity by 2018. Ford will build a new assembly complex in San Luis Potosí, and expand an existing factory near Mexico City. The moves will make room for several models, including a yet-to-be-disclosed hybrid vehicle that is described as a Toyota “Prius fighter,” and will allow Ford to focus its U.S. factories on higher-profit trucks and sport-utility vehicles.
Source: The Wall Street Journal

Share: LinkedIn Twitter Facebook

[back to top]

More Articles
     
    Quotable
    "[CFPB chief Richard Cordray] had no idea how many actual victims there were because their whole case rested entirely on statistical estimations they admitted internally were inaccurate."

        -- A senior staffer for the House Financial Services Committee, commenting on newly uncovered internal memos that reveal the Obama administration knowingly exaggerated charges of racial discrimination in probes of Ally Bank, New York Post, Feb. 7

    Sponsored by

    NADA Market Beat
     
    New-Car Sales Set Record in 2015
    Videos

    Consumers Benefit When Dealers Discount Rates


    Register Today for the 2016 NADA Convention in Las Vegas
      


    Dealer Financing Benefits Car Buyers


    NADA University Online: The Next Generation 
      


    Get the Facts: The Benefits of Franchised Auto Dealers

    NADA Webinars
    All webinars will be held at 1 p.m. ET unless otherwise noted.

    Feb. 10: Increase Profit Through Smarter Advertising

    NADA members can view past webinars on-demand at no charge at NADA University Online. Member must create an NADA account before viewing.

    NADA Foundation News
    NADA Foundation Presents Grants to Wesley College

    NADA Foundation Presents Grants to Wheeling Jesuit University

     
    Search Back Issues | Unsubscribe | Subscribe | Manage your subscription | email us
    NADA For more information on NADA, visit www.nada.org or contact NADA, 8400 Westpark Drive, McLean, VA 22102. This email may contain an advertisement of NADA products and services. Any opinions or statements contained herein do not necessarily reflect the views of NADA. Factual errors are the responsibility of the listed publication. If you are a franchised new-car or -truck dealer and would like to become a member of NADA, please visit the Join NADA section of www.nada.org. Questions or comments concerning NADA Headlines content may be directed to publicaffairs@nada.org .