Tag Archive | "NADA"

House Approves Resolution to Repeal CFPB’s Dealer Participation Guidance


WASHINGTON, D.C. — The U.S House approved on Tuesday its version of the resolution of disapproval of the Consumer Financial Protection Bureau’s dealer participation guidance. The resolution now heads to President Trump’s desk, where it is expected to be signed.

The 234-175 vote was cast largely along party lines, although 11 Democrats crossed the aisle to approve the resolution. One Republican, Ileana Ros-Lehtinen of Florida, voted against the resolution, which, when signed by President Trump, will bring an end to the automotive retail and finance industry’s five-year effort to get the bureau’s controversial March 2013 guidance rescinded.

“This vote indicates that American consumers have spoken to their elected representatives to say they want competitive pricing on vehicle loans,” said Chris Stinebert, president and CEO of the American Financial Services Association, in a statement issued by the lender trade group. “We are an industry that competes for consumers’ trust as well as their business while helping them acquire vehicles that support their transportation needs.”

The vote comes less than a month after the U.S. Senate voted 51-47 to approve its version of the resolution and five months after the Government Accountability Office (GAO) said Congress has the power under the Congressional Review Act (CRA) to repeal the bureau’s dealer participation guidance.

Under the CRA, both houses must approve resolutions of disapproval by a simple majority and receive the president’s signature to kill a regulation. When the latter happens to S.J. Res. 57, which was introduced in March by Sen. Jerry Moran (R-Kansas), it’ll mark the first time the CRA has been used on a rule that has been in effect for several years. And once repealed, the CRA prohibits the reissuance of a rule in substantially the same form unless authorized by Congress.

The CFPB alleged in its five-page fair lending guidance that bank policies which allow auto dealers to mark up interest rates on retail installment sale transactions as compensation for services rendered create a significant risk of unintentional, disparate impact discrimination. It also warned lenders active in the indirect auto finance channel that they would be held liable for unlawful, discriminatory markups.

The bulletin goes on to state that lenders operating in the indirect auto finance channel “should take steps to ensure that they are operating in compliance with the [Equal Credit Opportunity Act] and Regulation B as applied to dealer markup and compensation policies.” It then listed a variety of steps and tools they could employ to address the bureau’s stated fair lending risks, including “eliminating dealer discretion to markup buy rates and fairly compensate dealers using another mechanism, such as a flat fee per transaction, that does not result in discrimination.”

Auto industry trade groups have argued that the bureau used its guidance to indirectly regulate the activities of dealers, which are mostly exempt from the bureau’s oversight under the Dodd-Frank Act. They also claimed the bureau was aware its methodology for determining disparate impact and potential harm to protected classes was flawed and prone to overestimation, yet pushed forward with claims of discrimination that resulted in enforcement actions that imposed millions of dollars in fines on auto finance sources, including Ally Financial.

The guidance also caused several finance sources, including BB&T and BMO Harris, to switch to a flat-fee compensation model. BB&T switched back to a dealer spread compensation plan earlier this year, while BMO switched to a three-tiered flat-rate model last summer.

The guidance was also behind consent orders the CFPB entered into with Fifth Third Bank, Toyota Motor Credit Corp., and American Honda Finance Corp regarding their dealer markup policies. As a result of those orders, the bank and two captives agreed to lower their markup caps to 1.25% and 1%. Fifth Third’s consent order, however, is set to expire this September, while Toyota Motor Credit’s and Honda Finance’s consent orders are set to expire in February 2019 and July 2020, respectively. The three finance sources yet to say whether they’ll return to a dealer participation model when they do.

“There’s no question that this is a rule masquerading as guidance. The CFPB never submitted the guidance to the GAO. They could have done so. Had they done so the 60-day clock would have run, we wouldn’t be here,” David Regan, executive vice president of legislative affairs for the National Automobile Dealers Association (NADA), said last week during a press briefing. “They chose not to submit that to Congress because they did not want the additional exposure to public notice and comment. Within just a few weeks of the guidance being issued in March of 2013, the congressional inquiries started pouring in asking very specific questions about the methodology that we now know was flawed. And yet, the agency repeatedly refused to respond to these questions.”

Congress has attempted to kill the bureau’s guidance through the legislative route. In November 2015, the House of Representatives approved the Reforming CFPB Indirect Auto Finance Guidance Act by a 332-96 vote. The bill, however, was not acted upon by the Senate before the end of the 114th Congress.

Last March, Sen. Toomey asked the GAO whether the CFPB’s guidance on dealer participation falls under the CRA. The agency delivered its answer this past December, writing in a letter to Toomey that it did.

When it initially issued its guidance, the bureau argued that because it had no legal effect on regulated entities, the CRA does not apply. The GAO, however, stated in its response to Toomey’s request that the bulletin “fits squarely within the Supreme Court’s definition of a statement of policy,” because it provides information on the manner in which the bureau planned to exercise its discretionary enforcement power.

And according to the GAO, the CRA “establishes special expedited procedures under which Congress may pass a joint resolution of disapproval that, if enacted into law, overturns the rule.” In a statement posted on its website just after the GAO delivered its answer, Sen. Toomey said he intended “to do everything in my power” to repeal the bureau’s guidance under the CRA.

“The joint resolution is a measured response to the CFPB’s attempt to avoid congressional scrutiny by issuing ‘guidance’ that imposed a new policy without necessary procedural safeguards,” said Peter Welch, president and CEO of the NADA, in a statement issued following the House vote. “Enactment of S.J.Res. 57 will help ensure every consumer’s right to get a discounted loan in the showroom.

“Every customer deserves to be treated honestly and fairly when purchasing or financing a car or truck, and there is no room for discrimination of any kind, period,” he continued. “We continue to encourage all local dealerships to take up NADA’s voluntary fair credit compliance program, which is based on a U.S. Department of Justice model. It helps eliminate fair credit risk in auto lending while ensuring a competitive marketplace.”

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Stanton Returns to the NADA as COO


TYSONS, Va. — Michael J. Stanton Jr. has returned to the National Automobile Dealers Association (NADA) as senior vice president and chief operating officer, the trade group announced today.

Stanton will work across the organization on strategic and operational issues and the development of new business opportunities. He will oversee the information technology and economics and data analytics departments, as well as NADA’s affinity programs.

“I am excited to be back at NADA and have the opportunity to enhance existing relationships and develop new ones to support franchised new-car and -truck dealerships and our industry,” Stanton said.

Prior to rejoining the NADA, Stanton served as vice president and general manager of J.D. Power’s Vehicle Valuation Practice. Formerly known as the NADA Used Car Guide, the service was acquired by J.D. Power in 2015.

Before the acquisition, Stanton served as vice president and COO of the NADA Used Car Guide. He also served as the association’s executive director of industry affairs. Before that, he was the national sales manager for the NADA Used Car Guide.

Prior to joining the NADA, Stanton worked for two auto manufacturers, primarily assisting dealers with their sales and service operations. He received a bachelor’s degree in political science from James Madison University and earned a master’s degree in business administration from Virginia Tech. Stanton currently resides in Washington, D.C., with his family.

“Mike is a proven NADA leader who will add bench strength to our team,” said NADA President and CEO Peter Welch. “He has worked many years gaining vast experience and building key relationships and partnerships throughout the automobile industry and beyond.”

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ADESA Auction at NADA Convention Raises $94,423 for Canine Companions


NEW ORLEANS – An ADESA auction at the NADA Convention and Expo today raised $94,423 for the NADA Foundation, which supports Canine Companions for Independence.
Retired Army Sgt. Steve Blackman and his service dog, Gottlieb, attended the auction today to represent Canine Companions.
“My life has completely changed. No longer do I wake every morning wondering what the day is going to bring and if I can make it through it because I have [Gottlieb],” said Blackman, who suffered a traumatic brain injury in service. “I know my family doesn’t have to worry about me anymore. I can go out and do things and leave the house because I have him. Canine Companions has made this possible for veterans and so many other people with disabilities. It gives us our independence back.”
Robert Bassam, founder of Easterns Automotive Group in Sterling, Va., placed the first winning bid of $39,000 for a 2015 Polaris Utility Task Vehicle (UTV). He then donated the UTV back to ADESA to be re-auctioned.
The second winning bid of $26,000 was made by Joe Verde, president of Joe Verde Group in San Juan Capistrano, Calif., and longtime supporter of Canine Companions. He also donated the vehicle back for re-auction.
Bassam’s son, Joel Bassam, director of marketing for Easterns Automotive Group, placed the final winning bid of $28,000.
Attendees gathered at the ADESA booth during the auction made $1,423 in cash donations to bring the final contribution to $94,423.
“We asked dealers and attendees to bid high in honor of the 100th anniversary of NADA. They responded by generously opening their hearts and wallets to help support two amazing organizations,” said Stéphane St-Hilaire, ADESA president and CEO. “The NADA Foundation and Canine Companions work to change the lives of veterans and children with disabilities every day. ADESA is very proud to once again play a leading role in supporting these great causes.”
ADESA auctions over the past six NADA conventions have raised more than $334,400 for the NADA Foundation’s Frank E. McCarthy Memorial Fund, in whose name the Canine Companions donation is made. McCarthy was NADA chief executive from 1968 to 2001.

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NADA Chairman Mark Scarpelli Announces New Initiative, Pledges Total Support of Auto Dealers


NEW ORLEANS – In his first official speech as 2017 chairman of the National Automobile Dealers Association, Mark Scarpelli on Saturday unveiled a new initiative designed to help local dealerships showcase all the benefits they bring to their millions of customers, the 1.1 million dealerships employees in the U.S., and to countless communities across the nation.

The initiative – MyDealership.org – utilizes videos, social media platforms and PSAs to communicate the significant benefits of a strong and vibrant franchised dealership network.

“There are five hallmarks of any local dealership in America today: We are local; We are modern; We are diverse; We save people money; And we create great jobs,” Scarpelli told the audience at the NADA Convention and Expo in New Orleans on Jan. 28, 2017.

“But MyDealership.org doesn’t come from the perspective of dealers,” said Scarpelli, explaining what makes MyDealership.org so unique. “It comes from the perspective of our customers, who benefit through lower prices on sales, financing and service. When local dealerships compete against each other, customers win.”

“It comes from the perspective of dealership staff, who benefit from gainful employment at all levels, with opportunities for advancement. Did you know that local dealerships employ more than 1 million people nationwide?” he asked.

“And it comes from the perspective of local community leaders, who benefit when local businesses like ours plant roots, contribute to the tax base and give back to local community. “

Scarpelli stressed that the bottom line is the auto industry is “a people business, no matter what. Period.”

“It starts with the people we employ,” he said. “The ones who sometimes get in at 6 a.m. and don’t leave until 9 p.m. or even later. It starts with the customers we see, walking through our doors and then coming back when they need help over the life of the car. And it starts with all of us: Dealers who have pledged our lives and our livelihoods to this business – come hell or high water.”

Scarpelli said the new initiative is just the next step for an industry that for more than 100 years has been the conduit to reliable and affordable personal transportation for American consumers from all walks of life.

“Auto dealers carried the privilege and burden of answering one question: How could we sell an automobile to everyone? We knew from the beginning that this engine with four rubber tires wasn’t a luxury or even a fad: It was a necessity, and it was here to stay,” he said, noting the founding of NADA, which is now celebrating its 100th birthday. “So when the government proposed a luxury tax on automobiles in 1917, NADA was born. This was just the first of countless examples where we stood up to protect not only ourselves, but our customers, and to keep cars affordable. Ours was an association at the forefront of helping dealers do the job of selling and servicing cars to the people who wanted them, whether blue or white-collared.”

In closing, Scarpelli made the standing-room-only audience a promise: “I will be your gatekeeper for this great industry. When I sit across the table from a member of Congress, I’ll show them how we save our customers money in the finance process, not cost them. When I’m on the phone with federal regulators, I’ll tell them that our job is to serve American consumers, not ourselves. When I meet with the manufacturers, I will encourage them to enact programs which help you, not strain you. And I will do my best to make sure that I hear from you, and you hear from me. Because the most important part of our relationship over the course of this year is communication.”

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NADA Celebrates Its 100-Year Anniversary


NEW ORLEANS (Jan. 26, 2017) – The National Automobile Dealers Association (NADA) is celebrating its 100th anniversary this year. Festivities for the centennial begin at the 2017 NADA Convention and Expo in New Orleans starting on Thursday, January 26.

“It’s not every day that a national trade association reaches its 100-year anniversary, yet NADA is still as strong and relevant as the day it was founded,” said 2016 NADA Chairman Jeff Carlson.

“NADA’s 100th mission for 100 years has been to represent local dealerships and our customers in Washington, D.C., with a goal of keeping personal transportation affordable for everyone,” added Carlson, president of Glenwood Springs Ford and Glenwood Springs Subaru in Glenwood Springs, Colo., and co-owner of Summit Ford in Silverthorne, Colo. “It’s an honor to serve such a respected group.”

For the past 15 years, more than 90 percent of all new-car and -truck dealerships in the United States have been NADA members. Few, if any, other associations have sustained those membership numbers, Carlson added.

Founded in 1917, NADA formed when a group of local dealers set out to fight a new effort by Congress to levy a luxury tax on new automobiles. Thirty dealers from state and local associations traveled to Washington, D.C., and set up base at the Willard Hotel.

By convincing Congress that cars were not luxury items as they were classified, but instead were vital to the economy, the group prevented total factory conversion to wartime work and succeeded in reducing a proposed 5 percent luxury tax to 3 percent.

The incident was the first of many chapters where local dealerships fought to keep new vehicles affordable for their customers.

“Local dealers argued in 1917 that cars are a necessity of American life, not a luxury item,” said 2017 NADA Chairman Mark Scarpelli, whose term as chairman coincides with the beginning of a new White House administration and Congress in the nation’s capital. “NADA was formed to make sure that entrepreneurs could open local dealerships and provide affordable cars and transportation to farmers, factory workers and people from all walks of life.”

Scarpelli, president of Raymond Chevrolet and Raymond Kia in Antioch and co-owner of Ray Chevrolet and Ray Chrysler-Jeep-Dodge-Ram in Fox Lake, Ill., officially becomes chairman of NADA during the 2017 NADA convention on Saturday, January 28. 

Scarpelli’s top priorities for 2017 include advocating on legislative and regulatory issues in Washington, D.C., promoting the consumer benefits of local dealerships, meeting with auto manufacturer executives, and getting the next generation of dealers involved in their trade associations and on Capitol Hill.

“We’re advocating for clarity with the new administration and Congress, whether it’s related to auto financing, new tax proposals, vehicle recall policy or fuel economy rules,” Scarpelli said. “We’re concerned about vehicle affordability for consumers, period. We have to make sure we keep our customers top of mind when dealing with all of these issues.”

NADA’s public policy initiatives are aimed at protecting consumers from overreaching federal regulations and unintended consequences.

NADA’s centennial festivities begin at the 2017 NADA convention, which runs from Jan. 26-29 in New Orleans. More than 23,000 dealers and auto industry professionals are expected to attend over the four-day event. NADA kicks off yearlong commemorative events beginning with NADA100 Carnival in New Orleans on Thursday, January 26.

Automotive News, on January 23, published an entire issue dedicated to NADA’s 100th Anniversary, featuring interviews with many of the most prominent figures in the automotive industry. Click here for the special edition

WardsAuto also published a NADA 100 special edition. Click here for the issue.

In addition to the convention, NADA has produced a NADA100 documentary and commemorative issue of its Convention Magazine, which was completely redesigned for the special occasion and includes a timeline of NADA, dealer and other auto-industry milestones. The documentary, magazine and other information highlighting the association over the years are available at nada.org/nada100. NADA also will be celebrating its 100th anniversary throughout the year with digital media initiatives, in speeches and at other industry events.

LINK: https://www.nada.org/NADA_Turns_100/

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Spireon Unveils Kahu at NADA 2017


IRVINE, Calif. — Spireon Inc., the leader in aftermarket telematics solutions for risk management and business optimization, will introduce its latest connected car solution – Kahu™ – at the National Automobile Dealers Association (NADA) Convention & Expo in New Orleans. Kahu is designed for dealers, providing streamlined lot management while delivering a new finance and insurance (F&I) profit center by offering consumers a modern location tracking and stolen vehicle recovery service. Additionally, Kahu empowers dealers to grow service retention with car buyers by providing accurate vehicle data for proactive maintenance reminders that can improve vehicle health and keep vehicles within warranty.

“New car dealer margins have been flat for several years, driving a need to create new revenue and profit opportunities,” said Kevin Weiss, CEO at Spireon. “Connected cars are changing the industry, but dealers are receiving little value from this shift. Kahu changes that dynamic, giving dealers the tools they need before, during and after the sale to grow profits and benefit from the connected car revolution.”

Kahu includes an aftermarket GPS device and mobile apps for both dealers and their customers. The solution provides these features and benefits to dealers:

· Lot Management — Dealers can easily manage inventory, track specific vehicle location, and see low battery indicators using a mobile phone or tablet, streamlining operations and creating a better buying experience for consumers. Virtual geofences and after-hours alerts allow dealers to identify and recover stolen vehicles within minutes.

· F&I Profit Center — Kahu offers dealers a high value add-on for consumers who seek peace of mind with a next generation vehicle recovery service and an arsenal of easy-to-use mobile features. From 24/7 vehicle location visibility, so consumers can track their vehicle and family at all times, to smart alerts for speeding and low battery, Kahu is an attractive add-on that safeguards consumers while driving dealer profit.
· Customer Loyalty — Kahu uses GPS-based mileage tracking to improve the accuracy of service reminders and increase service retention. Consumers benefit by being able to maximize warranty protection and ensure recommended service intervals are maintained.

“Our partnership with Spireon has paid for itself tenfold,” stated Spireon customer Jon Hansen, General Sales Manager, Burien Nissan. “Being able to offer a product that I find value in to our customers and making it a revenue generator for the dealership is really big for us. I would absolutely recommend Spireon to other dealerships.”

Spireon’s aftermarket GPS devices are installed on more than 3.5 million vehicles and offered by 14,000 dealerships across North America. With Kahu, car dealers and consumers now have access to state-of-the-art mobile location services, which protect their vehicle assets and can lead to reduced insurance premiums.

Kahu is already installed with a select group of early adopter customers, and will be generally available in the second quarter of 2017.

To learn more about Kahu at NADA please visit Spireon’s booth, #4309 in Hall E, or schedule a meeting at http://www.spireon.com/nada2017/.

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