View Web Version

SPONSORED BY
 
NADA.org
February 22, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
How CFPB's Auto Enforcement Actions Are Disrupting the Industry
Bank CEO Reveals How Obama Administration Shook Him Down
Automotive News: Agreed: Reform is Urgent
Takata May Be Forced to Recall Up to 90 Million More Airbag Inflators in U.S.
Volkswagen Asked by EPA to Make Electric Cars in U.S., Report Says
ALERT: Be Aware of Misleading Email Solicitations That Include NADA Logo
Volvo Plans To Be First Automaker To Go Fully 'Keyless'
Top Stories
How CFPB's Auto Enforcement Actions Are Disrupting the Industry

The Consumer Financial Protection Bureau's use of enforcement actions to try and make broad changes to the auto lending market is fragmenting the industry further and potentially limiting a consumer's ability to negotiate for a lower interest rate. The agency has so far cited a handful of indirect auto lenders for unintentional discrimination under the controversial legal theory of disparate impact. It has forced Toyota Motor Credit Corp., American Honda Finance Corp. and Fifth Third Bank to pay restitution and limit the extent to which a partnering auto dealer can raise interest rates on loans as a means of compensation. But there are key differences in each of these agreements that are making it harder for the CFPB to make systemwide changes. "This is what happens when using rulemaking though enforcement actions. There are disparities and loopholes which allow for incongruity of the law," said Isaac Boltansky, a policy analyst at Compass Point Research & Trading. "The problem with managing a market through enforcement actions and not broader rulemaking is that you have a disparate regulatory impact predicated off of a disparate market impact. There's definitely a degree of irony to it."

One of the biggest differences can be seen between the Honda agreement, which was signed in the summer of last year, and Toyota's, which came just two weeks ago. The CFPB is crediting Toyota with taking a more positive approach. But auto lending industry representatives said it's a problem that two of the biggest players in the market are effectively operating under different guidelines.

"Not only does the CFPB's latest sue-and-settle scheme only further confuse the regulatory landscape, it calls into question whether the CFPB is operating outside the limits that were imposed on its authority by Congress, which is sure to prompt additional congressional oversight," said Jared Allen, a spokesman at the National Automobile Dealers Association. "We already know that this campaign to eliminate auto loan discounts is costing consumers money, harming the very people the agency is trying to help by making credit less affordable across the board, and proving to be an unreliable and ineffective approach to addressing fair credit risk in auto lending."
Source: American Banker

Share: LinkedIn Twitter Facebook

[back to top]

Bank CEO Reveals How Obama Administration Shook Him Down

The former CEO of Ally Financial Inc. says the Obama administration abused its power by holding the bank’s business hostage in order to coerce a record settlement of “trumped-up” racism charges and push profit-killing new regulations on the entire auto-lending industry. The huge $100 million deal has spooked several other major lenders into resolving similar race-bias charges and offering below-market rates to minorities for car loans. Michael A. Carpenter, who helmed Detroit-based Ally from 2009 to 2015, complained in an exclusive interview that Obama’s powerful consumer watchdog agency threatened to derail the bank’s efforts to obtain key regulatory approvals if it didn’t agree to settle the allegations out of court. “To be strong-armed by a regulator was inappropriate to say the least,” he said. “They absolutely knew they had tremendous leverage over us.” Since the 2013 deal, the Consumer Financial Protection Bureau has accused the industry’s biggest lenders of ripping off black and other minority customers by charging them higher interest rates than whites.

But Carpenter says there’s no merit to the accusations. He suggests they’re merely a means to a political end: forcing car dealers to abandon discretionary pricing and equalizing credit outcomes, regardless of borrower creditworthiness. He warns moving to flat-rate financing, as the administration wants, would limit the industry’s ability to make a profit and cover risk and would be like “signing our own death warrant.”
Source: The New York Post

Share: LinkedIn Twitter Facebook

[back to top]

Automotive News: Agreed: Reform is Urgent

The Feb. 15 editorial, "Dealers should rally around an overhaul of the recall system" urged dealers to lobby Congress and U.S. regulators to rework auto recall rules. Automotive News called for distinguishing between urgent safety-related recalls and minor technical flaws and barring dealer resale only of used vehicles with dangerous unfixed recalls. In fact, that is the position of the National Automobile Dealers Association. Automotive News and NADA agree on the need to reform recall rules and the need for auto dealers to avoid selling vehicles known to be unsafe. We mischaracterized the situation by saying dealers have been "simply opposing rules requiring all recalled vehicles to be fixed before they are resold."
Source: Automotive News

Share: LinkedIn Twitter Facebook

[back to top]

Takata May Be Forced to Recall Up to 90 Million More Airbag Inflators in U.S.

U.S. auto safety regulators are examining whether an additional 70 million to 90 million Takata Corp. airbag inflators should be recalled because they may endanger drivers, according to a person with knowledge of the matter. That would nearly quadruple the 29 million inflators recalled so far and linked to nine deaths in the U.S.
Source: Reuters

Related Story:


Share: LinkedIn Twitter Facebook

[back to top]

Volkswagen Asked by EPA to Make Electric Cars in U.S., Report Says

U.S. authorities have asked Volkswagen to build electric vehicles in the United States as a way of making up for its rigging of emission tests, the German newspaper Welt am Sonntag reported. The paper said the U.S. Environmental Protection Agency was asking VW to produce electric vehicles at its plant in Chattanooga, Tenn., and to help build a network of charging stations for electric vehicles. Some of Volkswagen's cars already have electric or hybrid motors. It was not clear from the Welt am Sonntag report whether the EPA was asking VW to produce new models or existing ones. The EPA is currently in talks with VW with the aim of agreeing on a fix for diesel vehicles that emit up to 40 times U.S. legal pollution limits.
Source: Reuters

Share: LinkedIn Twitter Facebook

[back to top]

ALERT: Be Aware of Misleading Email Solicitations That Include NADA Logo

A company called Fixed Performance has sent dealers an email that includes the NADA logo and advertises a “Special NADA Offer.” Please be advised that this company has no NADA affiliation. NADA has asked the company to stop their unauthorized use of the NADA logo and to stop any misleading references to NADA in their advertising.
Source: NADA Legal Affairs

[back to top]

Volvo Plans To Be First Automaker To Go Fully 'Keyless'

Volvo just announced a move that should come as welcome news to those who habitually misplace their car keys. That’s because it wants to be the first automaker to eschew physical keys and/or a remote key fob altogether, perhaps as early as 2017. In their place the company would offer new-vehicle owners access to their autos via a smartphone app and Bluetooth wireless technology; they’d also be able to open the trunk and start the car remotely as well. Using an app to unlock one’s car is not exactly a new idea, but other automakers employ it as a secondary, and not primary avenue for access. For technophobes and others married to the status quo, Volvo says it will continue to offer a physical key fob to customers who request it.
Source: Forbes

Share: LinkedIn Twitter Facebook

[back to top]

More Articles
 
Quotable
"We already know that this campaign to eliminate auto loan discounts is costing consumers money, harming the very people the agency is trying to help by making credit less affordable across the board, and proving to be an unreliable and ineffective approach to addressing fair credit risk in auto lending."

   --- NADA Spokesman Jared Allen, commenting on the CFPB's use of enforcement actions to try and make broad changes to the auto lending market, American Banker, Feb. 19


Sponsored by

NADA Market Beat

New-Car Sales Off to a Roaring Start
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
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 .