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CFPB, NADA take center stage in Washington, D.C., in November

November 22, 2013
By Mark Scarpelli, Chicago Metro NADA Director
Richard Cordray, director of the Consumer Financial Protection Bureau, provided the agency’s semi-annual report to Congress in testimony to U.S. Senate Banking Committee on Nov. 12. During questioning from the Senators, Cordray admitted that the CFPB needs to provide more transparency on its methodology, but expressed concern about dealers setting auto loan rates.
“Like Congress, the NADA is still waiting for the CFBP to share the methodology it uses to determine that statistical discrimination exists in the auto lending,” said NADA President Peter Welch.
Welch stressed that many factors outside of race can impact an interest rate such as the amount financed, vehicle class, whether the car is new or used, the size of the down payment, term of the loan, time of the month and  automaker sales incentives, etc.
“Without understanding the bureau’s computer modeling there is no way to determine if the CFPB’s conclusions are reliable or come to a resolution that protects the affordability and accessibility that dealers can offer their customers today,” Welch said. 
Six of the 22 members on the Senate Banking Committee signed a letter to Cordray on Oct. 30 expressing concern about the CFPB’s guidance issued last March “that could curtail a pro-competitive feature of the indirect vehicle financing market and to request greater transparency for the bureau’s activity related to this matter.” They are Ranking Member Mike Crapo, R-Idaho; Kay Hagan, D-N.C.; Heidi Heitkamp, D-N.D.; Joe Manchin III, D-W.V.; Jerry Moran, R-Kan.; and David Vitter, R-La.
In March, the CFPB — without public comment or formal rulemaking — issued guidance that pressures lenders into compensating dealers arranging financing with flat fees and eliminating any discretion dealers have to “meet or beat” a competitor. Since then, the CFPB has refused to release any of its research that supports the need to force these changes in auto lending.
After multiple bipartisan requests from both the House and Senate, the CFPB admitted recently that there was no analysis performed as to how moving to flat fees will help or harm consumers.
“The NADA shares the CFPB’s goal of eradicating discrimination. There is no room for discrimination in the car business or any other business,” Welch said. “In the name of fair lending, the CFPB’s actions will eliminate a customer’s right to negotiate a better interest rate. That is akin to eliminating the ability to negotiate a lower sticker price on a car or truck.”  
Welch said consumers benefit from the current system of dealer-assisted financing because consumers can shop at more than 17,000 franchised new-car dealerships that have the ability to “meet or beat” interest rates offered by their competitors. “The current system yields credit that is widely available and competitively priced,” he said.
In other NADA news ...
• Dealers and their managers planning to attend the 2014 NADA Convention & Expo in New Orleans should register as soon as possible and book one of the few remaining hotel rooms. Thirty-three out of 36 hotels in the NADA convention block are sold out. Only three hotels have rooms available: Embassy Suites, Hyatt Regency and Omni Royal Crescent.
“With numerous conferences and events scheduled in New Orleans over the same dates as the NADA convention, hotel rooms are filling up quickly and there’s limited space,” said NADA Convention Chairman Desmond Roberts. “The NADA’s hotel rates are guaranteed to be the lowest in town.”
The NADA convention is Jan. 24-27. Dealers and their managers who register by Jan. 16 will receive at $75 discount from the on-site rate. For more information or to register, visit
• The NADA has unveiled its second annual industry report on car and truck dealership employee compensation, benefits, retention and turnover, and hours of operation and work schedules.
The 2013 Dealership Workforce Study Industry Report was produced in partnership with DeltaTrends, and was designed to help dealers meet their No. 1 challenge: recruiting, hiring and retaining top talent. The report helps dealers meet that challenge, with hard data culled from 290,000 car and truck payroll records, and cogent analysis by DeltaTrends, the automotive retailing industry’s leading provider of workforce metrics, guides and trends, and HR best practices.
“This is by far the most comprehensive and timely study on the dealership workforce ever produced, and serves as a tremendous resource to help dealers ‘step up their game’ to gain an edge on the competition,” said NADA Chairman David Westcott.
To purchase the 2013 Dealership Workforce Industry Report, contact NADA University Online at (800) 557-6232 or complete the form at The opportunity to participate in the 2014 study will open to NADA and ATD member dealers at the 2014 NADA Convention & Expo in New Orleans, Jan. 24-27.