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March 21, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
IBD Editorial: Senate Crafts Bill To Stop Obama Witch Hunt Against Auto Lenders
Another Bill and CFPB Clash with House Lawmakers
Toyota Dealers Get CPO Leasing
California to Implement Income Cap on Green Car Rebates
Who's Showing What at the New York Auto Show
Top Stories
IBD Editorial: Senate Crafts Bill To Stop Obama Witch Hunt Against Auto Lenders

Regulation: The Senate has introduced a bill forcing Obama’s consumer watchdog agency to withdraw its abusive policy of eliminating consumer discounts on auto loans in the name of fighting lending discrimination. It can’t come soon enough. Introduced by Senate Banking Committee member Sen. Jerry Moran, R-Kan., S. 2663, the “Reforming CFPB Indirect Auto Financing Guidance Act,” matches bipartisan legislation introduced in the House by Reps. Frank Guinta, R-N.H., and Ed Perlmutter, D-Colo.

It was in the House where the head of the Consumer Financial Protection Bureau happened to be fending off angry questions about the policy. CFPB chief Richard Cordray testified before the House Financial Services Committee that he and his race-baiting prosecutors will nonetheless forge ahead with using “disparate impact” statistics to prove discrimination by auto lenders, even though lawmakers pointed out that disparate impact is not cognizable under the Equal Credit Opportunity Act. They also noted his jihad on the car finance industry will cost some consumers nearly $600 on a typical new-car loan.

Both Republicans and Democrats complain that CFPB is overstepping its mandate under the Dodd-Frank Act in going after the auto finance industry and its dealers. The agency is using a liberal legal theory known as disparate impact to literally make up charges of lending discrimination against some of the biggest players in the $900 billion auto finance industry, including Ally Financial, Honda, Fifth Third Bank and Toyota. Several other banks are under investigation in CFPB’s witch hunt.

Internal agency documents reveal that the “statistical evidence” prosecutors claim show car lenders and dealers marking up loan prices for minorities vs. whites failed to control for non-discriminatory factors, such as credit history, trade-ins, down payments and rate-shopping. What’s more, CFPB couldn’t ID a single alleged victim of racism, and had to fabricate hundreds of thousands of victims in order to mail remuneration checks, many of which went out to non-minority borrowers.

High-level agency memos also reveal the real agenda behind the crusade: restructuring the entire industry by forcing it to move to flat-rate financing, regardless of credit risks. Removing competitive financing would not only hurt industry profits, but also consumers with good credit who shop for the lowest interest rates.

“Every consumer deserves access to competitive financing and great rates when they buy a new car or truck, but the CFPB’s misguided policy of eliminating consumer discounts on auto loans is making financing more expensive and harming many of the very people the agency is trying to help,” National Automobile Dealers Association President Peter Welch said.

Even Democrats see this as wrong, including members of the Congressional Black Caucus. Many have crossed the aisle to vote for bills not only ending the disparate-impact enforcement policy, but reforming the CFPB and reining in its rogue director. One of them would create a commission to check Cordray’s power, while another would appoint an inspector general to audit the cases that his diversity cops are bringing against lenders. Both bills recently passed the House with overwhelming bipartisan support.

Seeing the heat turned up, the White House argues Republicans are trying to “tie the CFPB in knots” and “gut consumer protections,” while ignoring growing support for reforms from fellow Democrats. Of course, this ignores reform support from leaders in Obama’s own party, who see it’s Obama and his race-mongers who are hurting consumers.

With their meritless discrimination cases, they’re jacking up the cost of car loans for average Americans — including minorities with good credit. And with their bogus payouts to phantom victims, they’re also denying auto industry workers, many of whom are minorities, tens of millions of dollars in pay raises and bonuses.
Source: Investor's Business Daily

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Another Bill and CFPB Clash with House Lawmakers

Vehicle financing continued to be one of the more bandied about topics on Capitol Hill in recent days. First, a member of the U.S. Senate introduced legislation to bring what the National Automobile Dealers Association called “transparency and accountability” to the Consumer Financial Protection Bureau's regulation of the auto finance market. Then during a hearing lasting more than three hours, CFPB director Richard Corday asserted that Rep. Jeb Hensarling, chairman of the U.S. House Financial Services Committee had the matter “exactly backwards” when the two individuals clashed again over the agency’s investigation and $80 million enforcement action against Ally Financial more than two years ago.

During a six-minute exchange that can be seen in the video, Hensarling peppered Cordray about internal CFPB documents the committee used to generate multiple reports about how the bureau handled the investigation involving Ally. The Texas Republican also tried to use a review of salary figures of various CFPB staff members to question Cordray about the validity of disparate impact, a legal theory the bureau has used not only against Ally but other large players in the auto finance market.

Sen. Jerry Moran, a Kansas Republican and member of the Senate Banking, Housing and Urban Affairs Committee, introduced S. 2663, which is dubbed the “Reforming CFPB Indirect Auto Financing Guidance Act.” The measure would require the CFPB to withdraw what NADA described as the “flawed guidance” that attempts to eliminate a dealer's ability to discount auto financing for consumers.

NADA added that the legislation also requires the minimal safeguards the agency failed to follow, such as public participation and transparency. Nothing in the bill would restrict the CFPB’s ability to enforce fair credit laws in auto financing, according to the association.

The dealer group added that the bill is identical to legislation introduced by Reps. Frank Guinta, a New Hampshire Republican, and Ed Perlmutter, a Colorado Democrat, which passed in the House last November by an overwhelmingly bipartisan vote of 332-96. The Guinta-Perlmutter bill (H.R. 1737) won the support of 244 Republicans and 88 Democrats.

“Every consumer deserves access to competitive financing and great rates when they buy a new car or truck, but the CFPB’s misguided policy of eliminating consumer discounts on auto loans is making financing more expensive and harming many of the very people the agency is trying to help,” NADA president Peter Welch said. “Fortunately for consumers, there is strong bipartisan support in Congress for protecting consumers’ rights and consumer savings by repealing the CFPB’s flawed guidance, and we commend Senator Moran for his leadership on this issue,” Welch added.
Source: SubPrime Auto Finance News

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Toyota Dealers Get CPO Leasing

Toyota Division is offering leasing as an option to consumers who want to get behind the wheel of its certified used cars and trucks -- just in time for an expected doubling in the number of Toyota and Scion off-lease vehicles that will return to the market. In January, Toyota Division began rolling out its certified leasing program in Northeast markets, where leasing is popular and off-lease volume is plentiful. The national rollout will continue as individual regions get their dealers trained, said Tom DeLuise, national Toyota certified and rent-a-car sales and operations manager at Toyota Motor Sales U.S.A.
Source: Automotive News

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California to Implement Income Cap on Green Car Rebates

California’s rebate program for electric vehicles will soon cut off higher-income green car buyers. The program is implementing an income cap starting on March 29, the Sacramento Bee reported Saturday. Single tax filers who earn $250,000 will not qualify for rebates on plug-in hybrid electric vehicles and battery electric vehicles. The income cap rises to $340,000 for head-of-household filers and $500,000 for joint filers. The changes come as critics have accused the rebate program of being a subsidy for the rich.
Source: The Associated Press

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Who's Showing What at the New York Auto Show

You don't think of New York City as a place to cut loose with a supercar - but the city's auto show seems to draw buyers of those ultraperformance marvels. Makers ranging from Audi to Nissan to Mercedes-Benz to bespoke maker Spyker will show high-powered offerings at Javits Center. Several other brands will be making statements. Hyundai's new Genesis luxury brand offers a concept, Toyota will show the Prius Plug-in and Subaru brings the next-generation Impreza.
Source: Automotive News

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      "Every consumer deserves access to competitive financing and great rates when they buy a new car or truck, but the CFPB’s misguided policy of eliminating consumer discounts on auto loans is making financing more expensive and harming many of the very people the agency is trying to help."

          -- NADA President Peter Welch, Investor's Business Daily, March 18

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