The update below was prepared by WANADA’s NADA Director Geoff Pohanka as part of a regular series to keep the membership informed about what is happening on the national stage and within the halls of NADA. WANADA thanks Mr. Pohanka, currently NADA’s Vice-Chairman, for these regular insights and his continued efforts on behalf of all dealers.
Earlier this month, I participated in a virtual update for NADA Board members. 2022 Chairman Mike Alford and NADA President and CEO Mike Stanton are committed to ensuring good communication between NADA and its member-dealers. And a big part of that is keeping the Board briefed on key issues throughout the year so we can share that information with the dealers we represent. This most recent Board update occurred at roughly the midpoint between the March Board meeting, and the upcoming June Board meeting in California.
The three main topics covered in this update were: efforts to secure LIFO relief; regulation of dealer-assisted financing and F&I products; and the launch of the brand-new nada.org website.
Efforts to Secure LIFO Relief
- Despite broad bipartisan congressional support for the Treasury Department to use its existing authority to allow LIFO relief to businesses if a “major foreign trade interruption” makes inventory replacement difficult, Treasury has declined as it believes it needs additional legislative authority. As such, NADA’s efforts have shifted to securing LIFO relief through legislation that can pass both chambers and be signed by the President.
- On April 4, Reps. Dan Kildee (D-Mich.) and Jodey Arrington (R-Texas) introduced the “Supply Chain Disruptions Relief Act” (R. 7382) which explicitly provides Treasury such legislative authority. On April 28, Sens. Sherrod Brown (D-Ohio) and Tim Scott (R-S.C.) introduced S. 4105, a Senate companion bill. Cosponsors need to be added to the bill to demonstrate bipartisan support, and NADA is working with Directors, ATAEs and dealers in a targeted fashion to secure additional cosponsors.
- The 92 House Members and 52 Senators who signed letters to Treasury Secretary Janet Yellen supporting LIFO relief for dealers are excellent prospects for potential cosponsors. Stand-alone tax bills are rarely enacted, so generating significant numbers of cosponsors is necessary to encourage Congressional leadership to attach the bill to a broader legislative package that is likely to pass.
Regulation of Dealer-Assisted Financing and F&I Products
- A recent major consent order underscores the FTC’s intention to hold dealer leadership—as well as the dealership entities themselves—responsible for alleged unlawful behavior, and it further highlights the need for dealers to conduct robust training on and oversight of all aspects of their sale and finance operations.
- As part of the terms of the settlement, the dealership group must establish a comprehensive fair lending program that, among other components, requires the dealership in retail installment sale contracts involving dealer participation to (i) establish a standard dealer participation rate (SDPR) below a certain threshold that will be charged to all consumers, and (ii) only deviate below the SDPR for certain defined reasons that are recorded and approved by the dealership’s fair credit compliance officer. This program is very similar to the optionalNADA/NAMAD/AIADA Fair Credit Compliance Policy and Program.
- As a reminder, NADA offers multiple products to assist dealers in this area, including the optional NADA/NAMAD/AIADA Fair Credit Compliance Policy and Program referenced above and the optional NADA/NAMAD/AIADA Model Dealership Voluntary Protection Products Policy, which provides guidance and a policy template to help promote compliance with the selection, sale, and administration of VPPs that are offered to consumers. Dealers should carefully review these products with an attorney who is familiar with federal, state, and local law governing fair credit and VPPs as well as their dealership operations to determine appropriate compliance measures to adopt for their dealership.
The Launch of the Brand-New NADA.org Website
- Just last week, NADA completed the launch of its new flagship website (org), featuring a one-stop auto retail news hub for the dealership community (nadaheadlines.org).
- This is not your average trade association site. It will be updated around the clock with news and content spanning education, public policy, videos, blog posts and graphics showcasing all the work that we all do on a day-to-day basis.
- NADA’s vision is to have NADA Headlines be the homepage for every dealer principal and dealership employee in the United States – a hub where everyone who works in and around auto retail can get everything they need to effectively run their dealerships or departments; including breaking news, best practices, education and more.
- Please bookmark NADAheadlines.org as a favorite in the browser of your choice and join our community by returning often.
NADA’s next full Board meeting is scheduled for June 7-8, and I look forward to providing you with another update following that meeting.
Sincerely, NADA Director Geoff PohankaDownload Bulletin PDF