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March 16, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Driverless Car Rollout Seen Stalling Without Nationwide Rules
Looking Ahead: What the Auto Lending Industry Can Expect from the CFPB in 2016
BMW CEO Pushes Electric Cars, Relies on Luxury Models for Funds
Fiat Chrysler Gains Access to Billions in Cash
VW Missing Out on European Car Boom
NADA Convention: Dealership Workforce Study Participants Will Receive Three Complimentary Reports
Top Stories
Driverless Car Rollout Seen Stalling Without Nationwide Rules

A patchwork of state laws governing the operation of self-driving cars threatens to stall their development, supporters told lawmakers as U.S. senators began consideration of a national standard for robotic vehicles. “It’s absolutely critical that we have uniform rules across the country,” Senator Gary Peters, a Michigan Democrat, said in an interview. “These are vehicles that will be on interstate highways and going across state lines. If you have a patchwork of state regulations, it will slow down the process, add confusion and ultimately, I don’t think will add to safety or the advancement of these technologies.”

By taking the wheel from error-prone humans, driverless cars are expected to dramatically reduce road deaths, which rose to 38,300 in the U.S. last year from 32,675 in 2014, Peters said. In a hearing [Tuesday] before the Senate Commerce Committee, officials from Google, General Motors Co. and other companies developing driverless cars said they need national standards to deploy robot cars quickly and safely. And they found a receptive audience among the senators on the committee.
Source: Bloomberg

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Looking Ahead: What the Auto Lending Industry Can Expect from the CFPB in 2016

The CFPB's critics are getting louder, arbitration clauses are spending some time on the chopping block, and credit reporting continues to garner more and more attention. These are all things we can expect to focus on this year as the auto lending industry continues its power struggle with the CFPB.

Senate passing "Reforming CFPB Indirect Auto Financing Guidance Act" (H.R. 1737)

All signs point to the Senate passing the Reforming CFPB Indirect Auto Financing Guidance Act (H.R. 1737) this year. Currently, the Act is in the Senate and has not been taken up for a vote yet, but several industry leaders are estimating as many as 60 votes in its favor. Last November, the House passed the Act with a resounding 392-96 vote. The Act aims to curtail the CFPB's attempts to regulate purportedly discriminatory auto lending practices. According to the CFPB, auto lenders are charging minorities a higher markup on products than similarly situated white borrowers. Auto dealers and lenders, however, have questioned the methodology used by the CFPB to reach this conclusion, and the Act is the auto industry's attempt to obtain more transparency from the CFPB.

Although President Obama will likely veto the Act if it passes in the Senate, there is a high probability that the Act will get passed by a Congressional override. If nothing else, the strong bipartisan support for the Act is a powerful indictment on the CFPB's forays into the auto lending space so far. We are likely to see stronger, louder outcry from the auto lending industry regarding the CFPB's attempts to issue guidance in 2016.

Continued Criticism Regarding the CFPB's Methodology

In January 2016, the Republican staff of the House's Committee on Financial Services issued a report finding that the CFPB improperly issued settlement checks to white consumers in connection with the 2014 Ally Financial settlement. (In the 2014 CFPB/DOJ joint enforcement action against Ally, Ally was ordered to pay $80 million in damages to a large class of claimants for its "discriminatory pricing system." There, the CFPB found that Ally charged minorities higher markups on auto loans than their white counterparts.) The House Committee is the latest in a long line of critics of the CFPB's data mining processes, particularly in connection with its research regarding disparate impact on minorities.
Source: Baker Donelson

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BMW CEO Pushes Electric Cars, Relies on Luxury Models for Funds

BMW AG Chief Executive Officer Harald Krueger vowed to push the carmaker deeper into the market for electric cars and accelerate the introduction of self-driving features, while broadening the range of lucrative luxury models that will help fund his strategy. Krueger laid out the plan in his first major review since becoming CEO last year. Novelties include the introduction of more sport utility vehicles, including the full-sized X7, as well as more versions of high-end models like the new 7-Series flagship sedan, Krueger said Wednesday in Munich, where the company is based. A decade after taking the top spot in the global luxury-car market, BMW is at a crossroads.
Source: Bloomberg

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Fiat Chrysler Gains Access to Billions in Cash

Fiat Chrysler Automobiles NV closed on a deal with creditors to gain access to 2.5 billion euros ($2.8 billion) under its North American-based operations known as FCA US, formerly Chrysler Group LLC. The actions announced on Tuesday include amendments to term loans and a $2 billion prepayment. They allow the parent company full access to the subsidiary’s cash, lifting restrictions that have been in place since May 2011. Fiat Chrysler CEO Sergio Marchionne for some time now has said that the automaker intended to pay off the debt of FCA US as soon as possible to lift the restrictions that also limited payment of dividends by FCA US “for the benefit of the rest of the FCA Group.”
Source: The Detroit News

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VW Missing Out on European Car Boom

Volkswagen, penalized down by its emissions scandal, continues to miss out on the booming European car market. The European carmakers' association, ACEA, said Wednesday that February sales in Europe accelerated by 14.3 percent, but VW brand deliveries nudged up just 4.4 percent. VW group sales, boosted by Audi and Skoda, grew by 8 percent, as market share eroded to 23.9 percent.
Source: Associated Press

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NADA Convention: Dealership Workforce Study Participants Will Receive Three Complimentary Reports

Sign up at the NADA Pavilion (Booth 501C) or at Registration at the convention in Las Vegas.

Dealers that enroll in the 2016 Dealership Workforce Study at the NADA Convention and Expo in Las Vegas – and complete a questionnaire and submit their payroll records by April 29, 2016 – will receive the full 2015 trends report as well as the 2016 report at no charge (an $800 value). In addition to Automotive Retail: National & Regional Trends in Compensation, Benefits & Retention, participants will receive a customized report, Compensation, Benefits, Retention: How Your Dealership Compares, at no cost. The trends report is packed with useful information on competitive pay, benefits and work schedules so that dealerships can attract new hires and retain talented employees. The customized report, which is only available to participants, provides dealers with comparison data to see how they stack up against their peers nationally, regionally and by state as well as by brand. Last year, more than 290,000 payroll records were submitted. To participate, visit www.nadaworkforcestudy.com. For questions, send an email to WorkforceStudy@nada.org or call 800.557.6232.
Source: NADA Dealership Operations

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