NADA, AIADA Readdress Concerns Over the CFPB and International Trade
DETROIT and ALEXANDRIA, Va. — Two major dealer associations
reiterated their concerns about what's happening in Washington, D.C., nowadays,
beyond the solution lawmakers hammered out earlier this week to end the partial
government shutdown and lift the debt ceiling.
First, David Westcott, current chairman of the National Automobile
Dealers Association, warned that the Consumer Financial Protection Bureau's
lack of transparency and unresponsiveness to Congress could end up hurting
consumers by increasing the cost of auto loans.
"The CFPB is pursuing a policy that could weaken competition
in auto lending and result in higher credit costs for millions of consumers,"
Westcott said in remarks to the Automotive Press Association in Detroit earlier
this week.
Westcott also called the dealer franchise network the "most
efficient, cost-effective and competitive way of selling and servicing vehicles
anywhere in the world."
The franchised dealer from Burlington, N.C., repeated
inquiries made by lawmakers about how the bureau is evaluating what's a good
business practice and what isn't.
"More and more members of Congress are questioning the
CFPB's so-called 'fair lending guidance' that seeks to eliminate
dealer-negotiated financing and replace it with a flat fee method of
compensation where dealers are not allowed to discount the financing they
offer," Westcott said.
Westcott went on to say pressure from the CFPB to force
finance sources into adopting flat fees would eliminate a dealer's ability to
"meet or beat" a given rate, and could increase the cost of credit for millions
of consumers.
"When it comes to indirect lending, dealers are 'price
discounters.' We don't understand how removing 17,546 price discounters from
the marketplace is a good thing for consumers," he said. "And we don't see how
tampering with a $783 billion auto lending market — that's working effectively
and efficiently — is a good thing for consumers, either."
Westcott wrapped up his commentary by describing the entire
situation as "not a small matter," reiterating how vital it is for people who
can afford a vehicle to be able to secure one.
"It's not helpful when a government agency claims that an
entire market needs to be restructured but provides no evidence to support that
assertion," Westcott said.
"For many Americans, car ownership is the key to getting a
job and economic advancement. From our perspective, there is no question that
every customer deserves fair and equal treatment," he continued.
"Our goal is to meet the transportation needs of all of our
customers in an open and honest manner. And this includes working so that
consumers can continue to have access to affordable credit," Westcott went on
to say.
Westcott's complete remarks at the event can be found here.
AIADA Applauds Congressional Support of International
Industry
Meanwhile, the American International Automobile Dealers
Association cheered a letter orchestrated by Rep. Alan Nunnelee, a Republican
from Mississippi, and Rep. Pete Gallego, a Democrat from Texas, highlighting
the substantial investment made by Japanese automakers in the United States.
The letter, which was signed by 79 members of Congress, was
sent to President Obama earlier this week in support of the Japanese OEMs that
are creating new jobs and driving economic growth and innovation in America.
"This letter to the president is a timely reminder of just
how significant an investment Japanese automakers are making in our country,
and in the next generation of Americans," AIADA president Cody Lusk said.
"In addition to the facilities they build, the jobs they
create, and the quality products they produce, their dealers are also making
positive contributions in communities from coast to coast," Lusk continued.
AIADA pointed out that approximately two-thirds of Japanese
brand vehicles sold in the United States are built in U.S. manufacturing
facilities that represent a $47.1 billion investment in more than 29 plants.
Those production facilities provide 76,000 American jobs.
Separately, the dealer networks of Japanese auto
manufacturers number more than 5,300 franchises and directly employ more than
315,000 Americans.
Gallego and Nunnelee explained why they authored the letter
to President Barack Obama.
The lawmakers insisted that traditionally when the
administration negotiates free trade agreements such as the Trans-Pacific
Partnership (TPP), various stakeholders actively and publicly advocate their
positions amid the complexities of the issue.
"We didn't want the positive message of foreign direct
investment to get lost in the debate," Nunnelee said. "We wanted to remind the
president of the significant contributions these automakers and dealers make to
our nation's economy each day.
"In Mississippi alone, Japanese automotive investment has
created thousands of jobs," Nunnelee added.
Gallego went on to say that, "America has a proud history of
promoting policies that encourage multi-national corporations to invest
billions of dollars in our economy.
"U.S. workers have been the chief beneficiaries of that
investment, including the 2,500 people in San Antonio who are building and
selling new vehicles," he continued.
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