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NADA committees get government activities briefing, visit Capitol Hill

November 15, 2010

By Ray Scarpelli Sr., Metro Chicago NADA Director


Dealers of the NADA’s regulatory affairs and government relations committees received reports from staff on the association’s vigorous efforts before Congress and the Obama administration on the industry crisis, as of late February. Floor-plan lending was on the top of both meeting agendas.


The NADA has been working closely with Congress, the White House, Treasury and the Federal Reserve to explain the critical need for dealers to have access to inventory financing. The NADA has proposed government floor-plan loan guarantees as a cost-effective and efficient way to return confidence to the securitization loan markets. Following the meetings, many dealers met with their representatives and senators to give them firsthand accounts of dealer difficulties with accessing floor-plan loans and other issues.


Committee members also received an in-depth briefing on the state-based fuel economy debate, which is heating up, as President Obama has ordered the Environmental Protection Agency to reconsider California’s effort to impose its own fuel economy rules. NADA Chairman John McEleney was slated to testify before the EPA on how these rules would actually be implemented, outlining the ‘patchwork’ problem and how the rules would adversely impact auto dealers.


Tax issues were also at the forefront, and Iowa Sen. Chuck Grassley, the top Republican on the Senate’s tax writing committee, told the assembled dealers that Congress understands the urgency to come up with a permanent solution to the estate tax. Grassley did say that while full repeal of the tax was unrealistic, he would be working with his colleagues to come up with a solution that would help provide certainty to dealers who plan to pass their dealerships on to family members.


Dealers also strongly reiterated their opposition to LIFO repeal, which is likely to be considered as a revenue raiser in the new Congress. For more information on the NADA’s legislative and regulatory issues, visit


In other legislative news . . .


• The NADA commends congressional leaders for including tax relief for new-car buyers in the stimulus bill. The following is a statement by David Regan, NADA vice president of legislative affairs, in response to the congressional agreement last month on the economic stimulus package:


"The NADA is pleased that tax incentives on new-auto sales are included in the economic stimulus package. Allowing consumers to deduct sales and excise taxes paid on new vehicle purchases will help jump-start auto sales. While including interest deductibility on auto loans would have promoted even greater consumer interest in a new automobile, we applaud both House and Senate leadership—especially Sens. Barbara Mikulski (D-Md.) and Sam Brownback (R-Kan.) and Reps. Bill Pascrell (D-N.J.) and Steve LaTourette (R-Ohio)—for recognizing the importance of automotive retailing to the nation’s economy.


"Anything that increases auto sales will also provide help for state and local budgets that rely on sales tax revenues, consumers, dealers and the auto industry.  New-car dealers generate almost 20 percent of all retail sales in this country. Therefore, anything that can help get consumers back into dealership showrooms can also help stimulate an economic recovery."


Background: The Auto Ownership Tax Assistance bill, as introduced by Mikulski and Pascrell, would have allowed consumers to deduct auto loan interest as well as sales and excise taxes on new vehicles. The Senate passed the legislation, in its entirety, by a vote of 71-26. However, to reduce the costs of the overall package, the auto loan interest deduction provision was stripped out in House-Senate conference negotiations.


• The NADA responds to GM and Chrysler restructuring plans with statements from NADA Chairman John McEleney. The plans were announced Feb. 17.


o NADA Statement—Chrysler


"We are encouraged by Chrysler’s restructuring plan. It’s comprehensive and realistic and viable. The plan utilizes very conservative assumptions about auto sales over the next few years. What’s most important, however, is that Chrysler recognizes that availability of credit for automotive consumers and dealers is the single most important element of Chrysler’s viability. We look forward to working with Chrysler and the government to free up credit, both at the wholesale and retail level."


o NADA Statement—GM


"General Motors has submitted a strong plan. It’s comprehensive and aggressive and achievable. We are, of course, exceedingly disappointed that a viable solution has not yet been found for Saturn, Saab and Hummer. When considering the future viability of these brands, GM should continue to aggressively pursue all options. We are pleased that GM recognizes the ‘great dealer network’ that supports these brands. Should it become necessary to phase out these brands, it is imperative that GM treat the affected

dealers fairly and that they be properly compensated. It is equally important to take care of the Saturn, Saab and Hummer owners. On the positive front, we are encouraged that GM recognizes that the availability of credit for automotive consumers and dealers is central to GM’s survival. We look forward to working with GM and the government to free up credit, both at the wholesale and retail level."


In NADA news . . .


• The NADA’s new Industry Stabilization Task Force drafted and sent a letter last month to all OEMs, covering many of the areas where dealers and manufacturers can work together through this period of industry crisis. A sample of the letter is at


The NADA Industry Relations Committee is following up with each OEM to request an opportunity to discuss some of the franchise-specific points outlined. In addition, the Public Affairs Group developed a broader communications plan that included publishing the letter in Automotive News.


• Two NADA online seminars are this month, March 12 and 26:


"Responding to Organized Labor: Defending Workplace Democracy" will be 1-2:30 p.m. March 12. D. Gerald Coker, a partner in the law firm of Ford & Harrison LLP, will discuss the Employee Free Choice Act (EFCA), which could become law this year and usher in the most dramatic pro-union shift in federal labor law in U.S. history. Questions will be addressed during the seminar’s final 15 minutes.


"A Deeper Dive into the FTC Red Flags Rule" will be 1-3 p.m. March 26. Attorneys from the FTC’s Division of Privacy and Identity Protection, which drafted and enforces the Red Flags Rule, will present the seminar along with NADA Regulatory Affairs Director Paul Metrey. With the revised May 1 enforcement date approaching, dealers should ensure that their required Identity Theft Prevention Programs incorporate all covered accounts, include all relevant red flags, contain effective response and detection procedures, address all the rule’s other requirements, and are tailored to their particular operations. Dealers will get a chance to direct questions directly to the FTC attorneys. 

The fee for each seminar is $199 per computer connection. To register, visit or call 800-252-6232, ext. 2.