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January 11, 2018 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Murky Military Lending Act Requirements Leave Industry Scrambling
Military Members Deserve Fast Resolution on Lending
NADA Video: Volvo USA's New President/CEO Meets with All 300 U.S. Dealers
Toyota Plant Puts Foreign Car Makers on Path to Pass Detroit in U.S. Production
VW Brand Accelerates Push to be EV Leader with New e-Mobility Division
Ford to Reveal 2018 Mustang Bullitt at Detroit Auto Show
NADA Seminar: Advanced Parts Management Held Feb. 19-23 in Tysons, Va.
Top Stories
Murky Military Lending Act Requirements Leave Industry Scrambling

The Department of Defense's latest interpretation of the Military Lending Act, published last month, includes a murky set of rules that could retroactively put dealers and lenders in regulatory jeopardy, attorneys, compliance experts and industry trade associations say.
 
Under the latest interpretation, if a vehicle finance contract for active military members or their dependents includes financing for credit-related products or services, such as guaranteed asset protection or other types of credit insurance, or provides cash-out financing, the creditor, which would be the dealership or lender, must comply with the act. Although the interpretation was published in December, the Defense Department says it has been in effect since the rule was amended Oct. 3, 2016.

Trade associations are urging the Defense Department to reconsider this interpretation and re-evaluate its effect on active duty military members and the auto finance industry.
 
"We met with the Department of Defense, explained to them how very concerned we are, particularly with the retroactive nature of this interpretive regulation," Bill Himpler, executive vice president of AFSA, told Automotive News.
 
AFSA is hopeful that the department "will revisit this issue in relatively short order and will make some sort of accommodations that either restore the overall exemption for vehicle finance or at a minimum retract part of the rule and put it out for notice and comment," Himpler said. "It's a much more complex issue than they first believed."
 
NADA spokesman Jared Allen said the dealer group is working with multiple federal agencies and members of Congress to address the issue and encouraging dealers to be diligent. "NADA is urging all dealers who sell to members of the military to immediately review this new DOD interpretation of federal law and consult with their legal counsel to determine whether to continue offering certain credit related products, such as GAP insurance, to military customers," he said.
Source: Automotive News

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Military Members Deserve Fast Resolution on Lending

Dealers and lenders are facing significant challenges following the Department of Defense's latest interpretation of the Military Lending Act, but until the DOD clarifies the interpretation, an act that was designed to protect service members may actually be hurting them.
 
Because of murkiness in the act's changes and its retroactive nature, some lenders and dealers are refusing to sell or fund guaranteed asset protection to members of the military and their dependents. Others are refusing to work with the military altogether until the Defense Department clarifies its interpretation.
 
Military members should have the same opportunities to purchase protection products as civilians, but with an unclear interpretation of the Military Lending Act that could be damaging to dealers and lenders, they don't.

Dealers and lenders are understandably trying to protect their businesses until the Department of Defense clarifies its interpretation. But in the meantime, service members and their dependents are the real victims here.
 
Some sources are hopeful that the department will address the issue this month, but others predict a resolution during the second quarter at the earliest.
 
Not only for the sake of dealers and lenders, but for members of the military, let's hope clarification comes soon.
Source: Automotive News

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NADA Video: Volvo USA's New President/CEO Meets with All 300 U.S. Dealers

Shortly after being named as Volvo Cars USA’s new president and CEO, Anders Gustafsson made an ambitious plan to meet with all 300 of the Swedish automaker’s U.S. dealers in one week. The meetings were intended to forge stronger partnerships with dealerships, while creating a forum to discuss the launch of a new subscription service: Care by Volvo. Care by Volvo is described as the next step in redefining how people use cars; “it provides all of the benefits of ownership with none of the administrative hassle ... and 100 percent of the relationship with the driver or consumer is going to be handled by the dealers,” said Gustafsson, at AutoConference LA hosted by NADA and J.D. Power last November.
Source: NADA Blog

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Toyota Plant Puts Foreign Car Makers on Path to Pass Detroit in U.S. Production

Japanese companies seeking to bulk up market share while Detroit putting profits over volume

Toyota Motor Corp.’s announcement Wednesday of Alabama as the home for a shared factory with Mazda Motor Corp. highlights a major shift in U.S. vehicle manufacturing: Foreign auto companies soon will build more cars and trucks in America than the Detroit giants. In the first quarter of 2018, foreign makers are expected to produce 1.4 million vehicles in the U.S., WardsAuto.com projects, equaling their American rivals for the first time. That’s a leap from the same period last year, when foreign companies trailed Detroit auto makers by more than 100,000 vehicles, or roughly 10%.
Source: The Wall Street Journal

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VW Brand Accelerates Push to be EV Leader with New e-Mobility Division

Volkswagen brand is creating an e-mobility division as it seeks to be the leader in mass-market electric cars. The division will be headed by company veteran Thomas Ulbrich, who moves to the role from his post as the brand's production chief, VW said in a statement.
Source: Automotive News

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Ford to Reveal 2018 Mustang Bullitt at Detroit Auto Show

Ford is planning a surprise reveal of a special edition, high-performance Mustang Bullitt GT at next week's Detroit auto show, Automotive News has learned. The Bullitt will be unveiled as a 2018 model, a source said, timed for the 50th anniversary of the eponymous Steve McQueen movie that made the car an icon among enthusiasts.
Source: Automotive News

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NADA Seminar: Advanced Parts Management Held Feb. 19-23 in Tysons, Va.

NADA's Advanced Parts Management week-long seminar will be held from Feb. 19-23, 2018, at NADA headquarters in Tysons, Va. NADA instructor Mark Michalski will teach participants how to take their parts department to the next level by improving inventory integrity. Attendees will learn and discuss important topics like parts turn, fill-rate and ways to improve business operations, as well as analyze and discuss their dealership’s performance. Participants will walk away with the tools to make significant process improvements. The key areas covered include Perfecting the Mix, Profit-Centering, Know the Customer Needs, Personnel Techniques, Deep Dive into DMS, Case Study and SWOT Analysis, and Headache Relief – Best Practices. Click here to register. Seating is limited.
Source: NADA

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Quotable
"We're still hopeful that we can convince the Department of Defense that this is the wrong approach. We think it's unconstitutional to create a penalty retroactively. The Constitution allows businesses to know what is prescribed conduct."

    -- Tim Meenan, executive director of the Guaranteed Asset Protection Alliance, commenting on DOD’s interpretation of the Military Lending Act, Automotive News, Jan. 10

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