"Preconceived
notions are the locks on the door to wisdom"- Merry Browne
I think that quote best describes the Consumer Financial
Protection Bureau's desire to eradicate the indirect lending model auto lenders
use with automobile dealers. They do not care about how this change would
affect consumers. The bureau simply wants a flat-fee model.
In March, the CFPB issued a bulletin that holds lenders
responsible for unintentional discrimination at the partnering dealership —
known as disparate impact. They offered no methodology for how they came to the
determination that this was an industry-wide problem.
Interestingly, because an application for an auto loan is
not legally allowed to contain information about a borrower's gender or race,
regulators must use "proxies" to assume the customer's profile based
on trends in surnames and census information. So how do you even determine that
discrimination has taken place? It seems like a self-fulfilling prophecy!
NADA continues to fight this fight on behalf of dealers and
now the American Financial Services Association (AFSA), a trade association
that includes many auto lenders, is launching an independent study into the
effects of the indirect lending model on consumers and the auto industry. Their
study will include an analysis of the costs and benefits of the status quo vs.
changes, such as flat fees, advocated by the bureau.
I think most dealers would welcome a fair, balanced study of
whether there is inequity in the system. I don't know any dealers who advocate
discrimination based on race, religion, sex or any other type of profiling.
The study also needs to look at whether costs to the
consumer may, as many have suggested, be raised elsewhere in the business model.
NADA has cautioned that the Bureau’s efforts will harm consumers by reducing
the competitive benefits of dealer-assisted financing.
Consumers, lenders, dealers and regulators would all be best
served by getting ALL the information before making decisions!
How's Your 401K?
I was elected to the NADART board two years ago. Last week I
attended a NADART board meeting. There are a lot of great things happening with
NADART.
NADART gives auto dealers access to retirement services not
available to other businesses. By combining the buying power of thousands of
auto dealers across the nation, NADART gives NADA members access to superior
fiduciary and leading administrative support, regardless of the size of their
business. This “strength-in-numbers” approach is a powerful example of the
difference between NADART and other 401(k) providers.
If you are using your local broker because he buys a vehicle
from you every 5 years or you are using a large brokerage house that does not
afford you the personal care and tailoring of your plan that you need and
deserve, you owe it to yourself — and your employees — to discover how NADART
can make a difference for you. Go to https://www.nadart.org/WhyWeAreDifferent.aspx
for more information.
NADA Convention: 33
Hotels Sold Out; Limited Number of Rooms Available in New Orleans
I hope you are planning to attend the 2014 NADA Convention
& Expo in New Orleans. If so, you 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,
which are Embassy Suites, Hyatt Regency and Omni Royal Crescent. There are
numerous conferences and events scheduled in New Orleans over the same dates as
the NADA convention and so hotel rooms are filling up quickly and there’s
limited space. The NADA convention runs 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 www.nadaconvention.org.
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