Tag Archive | "Donald Trump"

Business Leaders Cautiously Optimistic About Trump, Economic, Auto Sales


ALPHARETTA, Ga. — Twenty senior industry leaders expressed cautious optimism about the economy and the automotive retail industry in White Clarke Group’s annual U.S. Auto and Equipment Survey.

The chief executive officers, directors, chairmen and president surveyed by the technology firm were optimistic about new-vehicle sales, which are on the decline but should remain among the highest on record in 2017. What has them cautious is President Donald Trump, whose communication style has them wondering if his administration can deliver on its pro-business campaign promises.

“As a result, business is falling back into cautious and hesitant state,” said Pacific Rim Capital CEO David Mirsky, noting the economic outlook was favorable following the November election. “The coarseness of our President’s communication style hasn’t helped. Even though most businesses agree with a lot of what Mr. Trump wants to do, we don’t like the way he has operated so far.”

According to the National Automobile Dealers Association, new-vehicle sales should end the year at 17.1 million units. During the first six months of 2017, the report noted, 8.4 million new cars and light trucks were sold. That’s down 2.2% from the year-ago period. Despite the decline in vehicle purchases, economic experts remain optimistic about the market.

One of the reasons is the $1.1 trillion auto finance market, which has fueled the industry’s rebound from the financial crash and recession of 2008-2009. Since then, U.S. light vehicle sales have delivered seven consecutive annual gains — the longest upward streak in decades, with sales peaking at 17.55 million new-vehicle registrations in 2016.

The concern, however, is affordability. According to Experian, the average finance amount for a new vehicle reached a record $30,621 in 2016, while the average finance amount for used also achieved new peaks at $19,329 per car. And in order to lower monthly payments, consumers are extending loan terms. In the fourth quarter of 2016, for instance, the 73- to 84-month term band rose 29% from the prior-year period.

“With the average loan amount for new and used vehicles hitting all-time highs, we are seeing the need for affordability drive consumer purchasing behavior,” said Melinda Zabritski, senior director of automotive finance for Experian Automotive. “Our latest research shows an $11,000 gap between the average loan amount on a new and used vehicle — the widest we have ever seen.”

Then there are hurricanes Harvey and Irma, which market analysts are still assessing but are believed to have damaged up to 1 million vehicles — 300,000 to 500,000 in the Houston area alone. This, analysts said in the report, could lead to a substantial increase in demand for new vehicles. It may also help with the oversupply problem in the used-vehicle space, which remains robust.

As for the U.S. economy, the report noted it grew at an annualized rate of 2.6% during the second quarter, with some financial institutions, such as Goldman Sachs, estimating it grew 3%. On the global stage, the International Monetary Fund and the Organization for Economic Cooperation and Development predicted that the global economy will expand by 3.5% this year.

The report also looked at regulatory threats, specifically those posed by the Consumer Financial Protection Bureau. Since opening its doors in 2011, the regulator, which oversees banks, credit card companies, and lenders, has returned about $12 billion in restitution to almost 30 million Americans. If Trump delivers on his promise of less regulation, however, the bureau faces a reduced role in 2018, the report noted.

The report touched on several other topics, including the impact of mobility on ownership models, the equipment finance market, new technology, and the impact of rising interest rates. However, most economic outlooks seemed to rest on the ability of a Republican White House and Republican Congress to deliver on their pro-business promises.

“It’s becoming clearer now that there is dysfunction in the White House and the Republican Party is fractured, so all early attempts to pass meaningful economic legislation have failed,” said Adam Warner, president of Key Equipment Finance. “Business confidence has eroded and will likely continue to be challenged in 2018.”

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Trump Administration Streamlines Self-Driving Guidelines


U.S. Transportation Secretary Elaine Chao released a new set of voluntary federal guidelines for autonomous vehicles on Sept. 12 — a move the Trump administration said will make federal regulatory processes “more nimble to help match the pace of private sector innovation.”

The guidance, which replaces Obama administration policy released a year ago, provides a voluntary framework for manufacturers and other stakeholders as autonomous vehicle technologies continue to evolve for testing and deployment. The guidelines will not be enforced, but autonomous vehicles found to have a defect will be subject to safety recall like other vehicles.

The released document also “revises unnecessary design elements from the safety self-assessment” found in the previous guidelines, the National Highway Traffic Safety Administration said in a released statement. The Obama administration’s policy included vehicle performance guidance that used a 15-point safety assessment system.

The new guidelines do, however, recommend that all design decisions be tested, validated and verified as individual subsystems and as part of the entire vehicle architecture. Manufacturers are “encouraged to document the entire process: all actions, changes, design choices, analyses, associated testing, and data should be traceable and transparent,” the document said.

The guidance addresses a range of subjects, including crash avoidance, human-machine interface, validation methods, vehicle cybersecurity, post-crash automated driving system behavior, data recording, consumer education, and the role of state governments.

“The new Guidance supports further development of this important new technology, which has the potential to change the way we travel and how we deliver goods and services,” Chao said. “The safe deployment of automated vehicle technologies means we can look forward to a future with fewer traffic fatalities and increased mobility for all Americans.”

Chao unveiled the policy guidelines during a press conference at an autonomous vehicle testing facility in Ann Arbor, Mich. They will be updated again next year to keep pace with innovation. NHTSA is part of the Department of Transportation.

The new NHTSA guidance drew both praise and criticism.

“We fully support the new guidance which is extremely well thought out, clarifying, and in alignment with the collaborative approach at the American Center for Mobility,” said John Maddox, CEO of the American Center for Mobility. “I believe that issuing guidance rather than specific regulation is most certainly the best approach, especially as the development of these technologies is rapidly evolving.”

But Consumers Union, the policy and mobilization division of Consumer Reports, viewed NHTSA’s revised policy as a means for the federal agency to weaken oversight of automated vehicles.

“This is a clear step backward for consumer safety that sends a troubling message about the Transportation Department’s priorities under the new administration,” said David Friedman, director of cars and product policy and analysis for Consumers Union. “On the same day that the NTSB announced Tesla’s Autopilot system played a ‘major role’ in a May 2016 fatal crash, Secretary Chao indicated that the Department will go easy on automakers, and that it will expect them to do less to verify the safety of emerging automated vehicle systems.”

Friedman served as NHTSA deputy administrator and as acting administrator during part of the Obama administration.

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President Trump Orders Review of Dodd-Frank


WASHINGTON, D.C. — President Donald Trump took his first step toward making good on his promise to dismantle the Dodd-Frank Wall Street Reform and Consumer Protection Act, signing on Friday an executive order directing the secretary of the Treasury to review the 2010 financial oversight law.

The order directs the Treasury secretary to consult with members of regulatory agencies and the Dodd-Frank-created Financial Stability Oversight Council and report back to the president within 120 days (and periodically thereafter). The report, and all subsequent reports, will identify any laws and regulations that inhibit federal regulation of the U.S. financial system.

“Today we’re signing core principles for regulating the United States financial system,” Trump said after signing the order. “It doesn’t get much bigger than this, right?”

The core principles his order lays out include regulations that “empower Americans to make independent financial decisions”; prevent taxpayer-funded bailouts; foster economic growth; enable American companies to be competitive in domestic and foreign markets; advance American interests in international financial regulatory negotiations; and “restore public accountability within federal financial regulatory framework.”

“The Dodd-Frank Act is a disastrous policy that’s hindering our markets, reducing the availability of credit, and crippling our economy’s ability to grow and create jobs,” said White House Press Secretary Sean Spicer during a press briefing. “Perhaps worst of all, despite all of its overreaching, Dodd-Frank did not address the causes of the financial crisis, something we all know must be done.”

Enacted in response to the Great Recession, the Dodd-Frank Act created new regulations along with several new government enforcement agencies, including the Consumer Financial Protection Bureau (CFPB). While Trump’s order isn’t expected to have an immediate impact, it does set the stage for Trump to fulfill his campaign promise to repeal and replace the act. The likely replacement bill is the Financial CHOICE Act of 2016, which was introduced last year by Rep. Jeb Hensarling (R-Texas). It stands for “Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs.”

“I’m very pleased that President Trump signed this executive action, which closely mirrors provisions that are found in the Financial CHOICE Act to end Wall Street bailouts, end ‘too big to fail,’ and end top-down regulations that make it harder for our economy to grow and for hardworking Americans to achieve financial independence,” said Hensarling. “Dodd-Frank failed to keep its promises, but President Trump is following through on his promise to the American people to dismantle Dodd-Frank. Republicans are eager to work with the president to end and replace the Dodd-Frank mistake …”

Repealing Dodd-Frank, however, doesn’t necessarily mean the CFPB will be eliminated, as it exists independent of the law that created it. However, regulatory insiders say passage of the Financial CHOICE Act could weaken the bureau. A federal appellate court also ruled the bureau’s single-director structure unconstitutional this past October, giving the president the power to remove Director Richard Cordray at will. The CFPB is appealing that decision.

Asked during Friday’s  press briefing if the administration planned to keep Cordray, Spicer said he didn’t have an announcement on the bureau. “That’s an area that we need to work with Congress on,” he said.

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Senate Republicans Introduce CFPB-Restructuring Bill


WASHINGTON, D.C. — U.S. Senator Deb Fischer (R-Neb.) reintroduced on Jan. 11 legislation aimed at replacing the director of the Consumer Financial Protection Bureau with a five-member bipartisan board. The bill was introduced just as Congressional Democrats and state regulators pledged to defend the bureau against attacks from the Trump administration.

This is the third time Fischer has introduced a CFPB-restructuring bill; the Republican lawmaker having introduced similar legislation during each of the previous two congressional sessions. This time, Fischer introduced her bill — S. 105, or the Consumer Financial Protection Board Act — less than four months after a three- judge panel of the U.S. Court of Appeals ruled the bureau’s leadership structure unconstitutional and vacated its $109 million fine against mortgage lender PHH Corp.

“For years, the bad decisions made by a single director at the CFPB have kept families locked out of economic opportunity,” Fischer stated in her press release announcing the bill, which sits in the Senate Committee on Banking, Housing and Urban Affairs. “My bill would prevent this misconduct by divesting the authority from one director to a five-member bipartisan board. This much-needed structural adjustment would bring accountability to the bureau and give more Americans a chance to build their own businesses and provide for their families.”

Under S. 105, each board member would be appointed by the president and confirmed by the Senate. The president would also appoint one of the five members to serve as chairperson of the board, which would consist of no more than three members from the same political party. Each board member would serve staggered five-year terms.

If passed, the legislation, which lists Senators John Barrasso (R-Wyo.) and Ron Johnson (R-Wisc.) as cosponsors, would take effect once the Senate confirms three members.

Replacing the single CFPB director with a committee is also part of legislation Republicans in the House of Representatives introduced last September. That bill, also known as the Financial CHOICE Act of 2016, would also repeal and replace the Dodd-Frank Wall Street Reform Act, as well as repeal the CFPB’s March 2013 guidance on dealer participation.

Senators Charles Schumer (D-N.Y.), Sherrod Brown (D-Ohio), and Elizabeth Warren (D-Mass) threw their support behind CFPB Director Richard Cordray and his agency during a Jan. 17 press call. Rumors have circulated around Washington D.C., that President Donald Trump and his administration plan to fire the director and abandon the legal defense of the agency in its appeal of the federal appellate court’s October 2016 ruling. The Senate Democrats claim Cordray’s firing would go against Trump’s promise to keep Wall Street accountable.

Sen. Brown and Rep. Maxine Waters (D-Calif.) then filed on Jan. 23 a motion to intervene in the bureau’s appeal. Seventeen attorneys generals followed suit the same day.

The attorneys general from Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Mississippi, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington, and the District Columbia are seeking to defend the constitutionality of the bureau. They argue that the federal appellate court’s ruling, if permitted to stand, would undermine the power of state attorneys general to effectively protect consumers against abuse in the consumer finance industry, as well as “significantly lessen the ability of the CFPB to withstand political pressure and act effectively and independently of the president.”

The regulators also argue that it’s critical they intervene in the case because President Trump has expressed strong opposition to the Dodd-Frank reforms that created the CFPB. “The CFPB is the cop on the beat, protecting Main Street from Wall Street misconduct,” said Attorney General George Jepsen, who led the group of regulators in their filing of the motion. “It was structured by Congress to be a powerful and independent agency that would protect consumers from the abuses of Wall Street, banks, and other large financial institutions. That mission is still critical to consumers today. However, the Trump Administration has said it intends to weaken the CFPB.

“That calls into question whether the new administration will adequately defend the CFPB and the American public it protects.”

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