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'Time out' needed for Congress over fuel economy regulations

November 11, 2011
By Mark Scarpelli, Chicago Metro NADA Director
It seems like just yesterday we were talking about the new fuel economy standards for Model Years 2012-2016. But the Obama administration, driven to act by California, is particularly motivated to get the next round of standards done three years before it is required to do so. The latest proposal, 54.5 mpg by 2025, has raised some eyebrows. Most automakers have in principle agreed to the plan. But it’s far from the finish line. And if a growing number of congressmen have their way, the administration’s efforts could be put on hold.
Last month, the NADA applauded the bipartisan efforts of congressmen whose letter to the chairmen of the  powerful House appropriations committee and the House appropriations subcommittee asked that  the Environmental Protection Agency be given a one-year “time out” from its work on fuel economy standards for 2017-2025 and prevent California from implementing its “patchwork” fuel economy  regulations. Members of Congress asked for support of an amendment by U.S. Reps. Steve Austria (R-Ohio) and John Carter (R-Texas). That letter and recent oversight hearings featuring several prominent House members, including Rep. Darrell Issa (R-Calif.), chairman of the House Oversight and Government Reform Committee, have ramped up pressure on the administration to justify its cost assessment of its proposed fuel economy rule. (By the administration’s own estimates, the proposed mandates will add an average of between $3,100 and $3,600 to the price of a new vehicle.)
The NADA thinks it is entirely too early to be talking about fuel economy proposals that won’t even be acted on until 2015. We back a more practical approach that will allow us to learn from the current standards and see how consumers in the marketplace react to them. That’s why we support the Austria-Carter amendment, which seeks to ensure the impact of these rules on jobs, consumer choice and vehicle costs are properly evaluated. The amendment also would achieve one of the NADA’s top regulatory priorities by temporarily returning rulemaking authority to the National Highway Traffic Safety Administration, the only agency required by law to consider the economic and safety impact of fuel economy increases.
Since this issue could severely affect our ability to provide our customers with the cars and trucks they need and can afford, our goal is to have regulators address legitimate questions about cost and affordability. With the help of Congress, we just might get that chance.
In legislative and regulatory news . . .
• Several new rules affecting dealerships that accept credit or debit cards took effect Oct. 1. The rules, issued by the Federal Reserve Board as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, include provisions that (i) cap debit card interchange fees paid by merchants to debit card issuers each time a customer pays with a debit card; (ii) give merchants options for routing electronic debit transactions over any network that is enabled to process them; (iii) prevent payment card networks and card issuers from designating an exclusive network for processing debit transactions; and (iv) prevent payment card networks from imposing restrictions on merchants’ ability to offer customers discounts for using cash or certain other methods of payment. The FTC has provided details on these new rules online ( Notably, numerous other issues affect dealers’ acceptance and treatment of credit card payments in the context of a vehicle financing transaction. Dealers should review their agreements with their finance sources or contact their legal counsel for details.
• Representatives from the NADA and several dealerships will participate in the third and final roundtable discussion on the selling and financing of motor vehicles. The Nov. 17 gathering will focus on the vehicle leasing process. As they did with the first and second sessions, NADA representatives will continue to demonstrate to the FTC the absence of prevalent practices that would justify additional regulation of dealers and show that any such regulatory activity would have the unintended consequence of decreasing access to, and increasing the cost of, credit to the very consumers the FTC is charged to protect. A previous roundtable examined how military personnel finance automobile purchases. 
• The Federal Trade Commission is warning small businesses that an email with a subject line “URGENT: Pending Consumer Complaint” is not from the FTC. The email says that a complaint has been filed with the agency against their company. The FTC advises not to click on any of the links or attachments with the email. Clicking on the links may install a virus on the computer.
• NADA University has the following Academy classes for 2012:
 Dealer Candidate Academy: starting Jan. 23; Feb. 20; May 7; June 25; Sept. 10; and Oct. 22. 

 General Dealership Management Academy: starting Jan. 9; Feb. 13; May 21; Sept. 17; and Oct. 8.