Washington Auto Show (WAS) organizers held the space draw for next year last week and it is now evident that the 2011 WAS will be a larger, more diverse show. The domestic OEMs, GM, Ford and Chrysler, boosted the square footage of their exhibits, taking all the space available on the top exhibition floor of the Walter E. Washington Convention Center and formed a "Detroit Three" grouping for the first time at the WAS. [FULL ARTICLE]

The Senate signed onto sweeping financial overhaul legislation yesterday, making the passage of Finance Reform by Congress official, and delivering to President Obama another "check off" on his ambitious public policy agenda. The House had already passed the bill before the July 4 recess. [FULL ARTICLE]

The odyssey that has been the long and circuitous route of Finance Reform in Congress, which first passed the House last November, is all but at an end with the Senate expected to follow the House in adopting the Conference Committee Report, thereby passing the legislation, perhaps as soon as next week. America’s dealers, who argued tenaciously and successfully to lawmakers that they didn’t belong in legislation directed at banks, ultimately prevailed by being affirmatively excluded from it. [FULL ARTICLE]

Attendees at the first joint MADA/VADA state dealer convention got a healthy dose of optimism about the future of the automobile business from an upbeat OEM leadership panel, headlined by Ford president and CEO Alan Mulally, who outlined a variety of steps taken by his company to resurge from the global recession and avoid Chapter 11 bankruptcy in 2009, which befell other domestic automakers. He pointed to Ford's new vehicle products as a "lineup that excites the consumer's imagination," while setting the pace on new vehicle innovation. Overall, Mulally saw the automobile industry, at large, gaining momentum over the next several years and being a positive force in the near term economic recovery. [FULL ARTICLE]

The nation's automobile dealers will not be subject to regulation under the proposed Consumer Finance Protection Bureau (CFPB) as part of Finance Reform legislation agreed to by House and Senate conferees this week. Instead, they may be subject to closer scrutiny by the Federal Trade Commission (FTC), which already oversees their financial activities under the Truth in Lending Regulations, Regulation M and other consumer protection rules. This extra measure of FTC regulatory oversight of dealers, now adopted by the conferees, is only triggered when the agency identifies consumer protection problems, at which point it can do rulemaking.
[FULL ARTICLE]

Franchised auto dealers will have to wait at least another week before they know whether F&I operations will be further regulated under Finance Reform legislation now being hammered out in a conference between the House and Senate. That reality became evident the minute the cameras began rolling on the televised proceeding and as those for and against Finance Reform staked out their positions in prickly exchanges that highlighted the large philosophical distance between them. [FULL ARTICLE]

The House/Senate conference to finalize Finance Reform legislation and whether dealership F&I operations will be subject to oversight by the proposed Consumer Financial Protection Bureau (CFPB) got underway on Thursday after House Speaker Nancy Pelosi (D-CA) named 10 members of the House Financial Services Committee to the conference committee. Among the conferees was Rep. Elijah Cummings (D), who represents Maryland's 7th District. [FULL ARTICLE]

House and Senate conferees are slated to begin the markup of final Finance Reform legislation next week, and WANADA dealer members and dealers around the country are hoping their hard fought grass roots effort to have dealer F&I operations excluded from the law pays off. As it now stands, the House version of the legislation excludes dealers and the Senate conferees are working under an "instruction motion," passed 60 to 30 in the Senate, to join the House in that position. "The bottom line is that the dealer position in Finance Reform right now is promising, but it ain't over till the fat lady sings," said Gerard Murphy of WANADA who has been in the midst of the legislative initiative. [FULL ARTICLE]

The next step in getting dealer F&I operations exempted from Finance Reform legislation will begin the first part of June when Senate and House conferees are expected to return to Washington and begin hammering out the differences between the bills passed by the Senate and House. As WANADA enthusiastically reported earlier this week, the Senate voted 60 to 30 to accept the Brownback "motion to instruct" Senate conferees to exempt dealers from Finance Reform so that the Senate input mirrors what came over from the House, which excluded dealers by amendment.
[FULL ARTICLE]

With the Washington fanfare at a fever pitch over the Senate's action last night, May 20, in passing the much debated and ballyhooed Finance Reform bill, the one lingering matter before the Senate sits down with the House in conference to merge the two bills, is none other than the exemption of automobile dealers from the Senate's version. The amendment to exempt dealers from SB. 3217, offered by Sen. Sam Brownback (R-Kan.) was set aside with all the other failed amendments. But in an eleventh hour effort to address Sen. Brownback and the auto industry's issue, Senate leadership agreed to schedule a vote on binding the Senate to exempt dealers when Senate conferees meet with House conferees to merge the bills next week. [FULL ARTICLE]

The vote on the Brownback amendment in the U.S. Senate that was expected this week has been put off until next week, which NADA's Legislative Office sees as a positive development and an indicator that dealers nationwide are reaching senators in the "eleventh hour" with the message that the Finance Reform bill in the Senate needs to exclude dealers as Brownback prescribes. NADA members are making headway on Brownback, despite formidable opposition such as that put forth by President Obama and the chairman of the Senate Banking Committee, Christopher Dodd (D-Conn.). [FULL ARTICLE]

President Obama jumped into the Finance Reform fray last week to ensure that the Republican alternative to the Democrat bill (S.3217) wasn’t successful. Obama and the Senate Democrats prevailed with the Republican measure going down to defeat by a vote of 61-38.
This is the situation, as amendments like the one offered by Republican Senator Brownback (Kan.) to exclude dealers from the bill go forward next week on the floor of the Senate. This brings the entirety of NADA’s extensively coordinated effort to pass the Brownback amendment down to the wire, meaning that the ongoing dealer grass roots effort to persuade senators on both sides of the aisle to sign on must remain vigilant. [FULL ARTICLE]

Senate Democrat and Republican leaders have agreed to start debate on S. 3217, the "Wall Street Reform" bill that would create a Bureau of Consumer Financial Protection (BCFP), a super-agency with new and unprecedented powers, which would likely limit or eliminate dealer-assisted financing. The BCFP is the centerpiece of Finance Reform supported by the Obama Administration and consumer groups who are attempting to give senators the impression that dealer-assisted financing requires federal regulation to protect car buyers. [FULL ARTICLE]

The White House reiterated this week that it opposes efforts by NADA to have franchise auto dealers exempted from oversight by the proposed consumer watchdog agency that is part of the administration’s Finance Reform package before Congress.
The statement was made by Diana Farrell, deputy director of the White House National Economic Council, who said loans made by auto dealers should be considered no different than those made by banks. Franchise auto dealers, of course, don’t make loans, but arrange them. [FULL ARTICLE]

With the same fervor that went into pushing Healthcare Reform through Congress, President Obama and his operatives have set their sights on Finance Reform legislation, which they have made clear to Congress should include the regulation of automobile dealers as "originators" of consumer loans. Obama has taken this position despite the fact that the House version of the legislation specifically and deliberately exempts dealers from Finance Reform that Congress has aimed at banks and other financial institutions that make consumer loans. [FULL ARTICLE]

As have been widely reported here and elsewhere over the past several months, legislation is moving through Congress to create a super federal agency known as the Bureau of Consumer Finance Protection (BCFP), which is designed to regulate consumer credit and finance transactions. Banks and finance companies are the object of this new level regulation. But in the course of the legislative ebb and flow, new car dealers are targeted for inclusion in the bill when the Senate takes it up, perhaps as soon as next week. This is a problem because a BCFP could severely restrict dealer assisted financing, or regulate it out of the business entirely!

 

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With the Senate likely to vote soon, on legislation that would create a Bureau of Consumer Financial Protection (BCFP), with authority to regulate auto lending and the regulatory prospect of restrictions on dealer-assisted financing, NADA is calling on dealers nationwide to contact their senators and ask for their support of an amendment by Sen. Sam Brownback (R-KS) to exempt dealers. [FULL ARTICLE]