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Dealer-targeted bill shelved in favor of broader legislation

November 15, 2010

By Ray Scarpelli Sr., Metro Chicago NADA Director

The Consumer Credit and Debt Protection Act (House Resolution 2309), introduced by Rep. Bobby Rush (D-Ill.) would give the Federal Trade Commission expedited rulemaking authority over dealer credit practices. But the bill has been put on the back burner.

Staff of the NADA worked with the House Energy and Commerce Committee to increase consumer protection and maintain dealer viability. But now, House Financial Services Committee chairman Barney Frank (D-Mass.), has introduced H.R. 3126, the Consumer Financial Protection Agency Act, which would create another federal agency to regulate financial services, with jurisdiction over any business offering credit.

Although the Frank bill doesn’t single out dealerships, it duplicates Federal Reserve Board auto financing regulations, which are enforced by the FTC. The NADA is working to ensure that dealers aren’t subject to two sets of overlapping and conflicting regulations.

In other legislative and regulatory news . . .

The NADA continues to meet with the Fed, Ratings Agencies on floor plan securitization. Throughout the summer, the NADA has met with the Federal Reserve and credit ratings agencies to urge the office that oversees the Term Asset-backed securities Loan Facility (TALF) program to lift the obstacles preventing funding of floor plan asset-backed securities (ABS). The ABS market, which produces much-needed credit for many floor plan lenders, ground to a halt in 2008 and has not returned.

The TALF is designed to provide investors with low-cost, non-recourse government loans to encourage them to purchase the bundled floor-plan lines of credit that finance sources sell as securitized bonds to obtain funds for continued floor-plan lending. The NADA explained how TALF loans may be made to floor plan ABS investors in a manner that protects the FRB’s balance sheet.

The Environmental Protection Agency releases a new SPCC compliance deadline.

Dealers have until Nov. 10, 2010, to comply with the EPA’s Spill Prevention, Control, and Countermeasure (SPCC) rules, which were released last year. Under those rules, the EPA would allow most dealerships to complete a self-certified template in lieu of a complex written SPCC plan that needs to be certified by a professional engineer.

"Tier 1" qualified facilities, which may complete a self-certified SPCC plan template, have 10,000 or fewer gallons in aggregate above ground oil storage capacity and a maximum individual oil storage container capacity of 5,000 gallons, and, for the three years preceding SPCC plan certification, no single discharge of oil to navigable waters exceeding 1,000 gallons, or two discharges of oil to navigable waters each exceeding 42 gallons within any 12-month period.

NADA Regulatory Affairs intends to provide updates on the rules and to publish the SPCC template when it’s finalized later this year.

LIFO fact sheet available The loss of LIFO (Last In First Out) for valuing inventory, either because of federal legislation or dealership termination, makes it imperative that dealers stay informed about potential changes and plan ahead. A LIFO fact sheet, prepared for the NADA, is available by going to www.nada.org/regulations.

In NADA news . . .

The NADA extends membership eligibility to dealers in transition. NADA members who recently relinquished or lost one or more new-vehicle franchises but continue to operate as used-vehicle dealerships and meet other eligibility criteria can continue their memberships under a new "Sustaining Member" program.

With this new category, the NADA recognizes that these members have been part of the association for many years and wants them to continue to be part of the NADA despite franchise terminations and the current decline in auto sales.

"Our objective has always been—and will always be—to advance U.S. auto retailing and serve as the voice of the dealer," says NADA President Phil Brady. "By creating this sustaining member category, we’re ensuring that some of our most loyal members can continue with us as we look to better days ahead."

Interested dealers should contact Susan Wase at (703) 821-7211 or swase@nada.org for additional eligibility criteria and other information about the sustaining member program.

2010 Convention and Expo registration underway. The coming convention, Feb. 13-15 at the Orange County Convention Center in Orlando, Fla., offers attendees some new ways to save money while enhancing their experience and expanding their knowledge:

• Early Bird registration fees are offered until Sept. 15, along with several moderately priced hotel choices to ease your pocketbook.
• The format will be three days, concluding at 5 p.m. Monday, to save dealers a night’s hotel stay and return them to their dealerships sooner.

 

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