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NADA Headlines (May 24, 2010)

NADA: Senate Vote Today Must Send Strong, Bipartisan Message to Keep Auto Financing Affordable

WASHINGTON – With a vote on the Brownback motion scheduled for 5 p.m. (eastern) today, NADA is urging dealers and their employees to make a last push to encourage senators to keep auto financing affordable and accessible for car buyers. “Today’s Senate vote must send a very strong and bipartisan message that additional rules and regulations will only make it harder and more expensive for people to finance a car,” said David Regan, NADA vice president for Legislative Affairs. “Senators must hear from their dealers back home that the Brownback motion is the pro-consumer option.” Regan added that the motion preserves existing consumer protections that effectively police dealer-assisted financing and that dealers should remind senators that all auto loans and all auto finance sources will be regulated under the financial services reform bill. “The stakes couldn't be higher for consumers and Main Street businesses, which had nothing to do with the financial meltdown,” Regan said. To overcome strong opposition from the White House and the Department of Defense, NADA's Legislative Office is encouraging dealerships to redouble their efforts in the final hours prior to the vote. Senators can be reached by phone through the Capitol switchboard at (202) 224-3121. More information can be found at www.NADA.org/Brownback.

Opinion: Spare Dealers from Senate Bill

Struggling auto dealerships shouldn't be punished in Senate's push to regulate finance industry

With vehicle sales still wobbly, dealers and consumers don't need the financing of auto purchases to become more complex or uncertain. Yet provisions in the Senate finance industry reform bill could lead to that result. Senators should vote Monday to carve dealers out of the bill. Auto loans were not the cause of the financial meltdown experienced over the last two years -- home loans were. The National Auto Dealers Association observes that the default rate on auto loans has held steady for the last couple of years while home loan defaults have spiraled upward. The auto industry and its dealers are struggling as it is. They shouldn't have to cope with a complex new layer of regulation that is directed at a different segment of the finance industry -- the one that actually did cause the financial meltdown of 2008. Read more from The Detroit News.

Editor's note: This was the lead editorial from The Detroit News in the Sunday edition published jointly with the Detroit Free Press.

As Financial Overhaul Takes Shape, It's Crunch Time for Lobbyists

Banking and business lobbyists prepared a last-ditch effort Friday to scale back ambitious new regulations governing the financial industry, hoping to sway congressional leaders who are putting the finishing touches on the legislation. Only a handful of key differences exist between the bill passed by the Senate on Thursday and an earlier version approved by the House, leaving opponents little time to push for changes. One fight involves auto dealers, which the House bill largely exempts from oversight by the new consumer agency. Facing strong opposition from the Obama administration, they were unable to get a vote on such an exemption in the Senate. But on Monday, the Senate is expected to approve a motion instructing its members of the conference committee to add the exemption. The motion is non-binding, but it would add pressure to include the exemption in the final bill. Auto dealers nationwide will be calling their local senators this weekend pushing for the exemption, said Bailey Wood, a spokesman for the National Automobile Dealers Assn. "We're still going to kick it into overdrive because there is very strong White House opposition to this," he said. "We have to convince senators it is better to side with Main Street small businesses that had nothing to do with the financial crisis instead of the White House." Read more from the Los Angeles Times.

Auto Dealers Fight Additional Federal Regulation

As Congress starts crafting a final version of the financial overhaul bill, one major issue seems a long way from Wall Street: Whether auto dealerships should be exempted from oversight by a consumer protection agency that would be created by the legislation. "That’s the biggest remaining issue between the two bills," Representative Barney Frank, Democrat of Massachusetts, said yesterday. The House version of the bill includes an exemption for auto dealerships, added last fall by Republican John Campbell of California. There is no such language in the Senate bill. The National Automobile Dealers Association said the industry should not face additional regulation because it did not cause the financial crisis that created the need for drastic reforms. “To throw us under the bus along with these Wall Street practices is insane," said Robert O’Koniewski, executive vice president of the Massachusetts State Auto Dealers Association. “We’re not part of the problem." Read more from The Boston Globe.

Washington Needs a Lesson in Car 101

Optimism usually grows on trees for dealers. But what's happening in Washington these days has even the most optimistic dealers doubting the system. At an American International Automobile Dealers Association's event here last week, a different "O" word surfaced more than once: Obama. Just a year after the administration saved Chrysler and General Motors, there is growing concern that the president is letting the usual suspects hammer away at dealers, this time using the context of financial reform legislation aimed at Wall Street. The president's recent statements and the subsequent back-and-forth over an amendment to protect dealers, proposed by Sen. Sam Brownback, R-Kan., added fuel to the fire. Read more from Automotive News.