Pub. 14 2015-2016 Issue 1

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 9 new jersey auto retailer W W W . N J C A R . O R G NADA Director’s MESSAGE | BY MARCY H. MAGUIRE Congress Won’t Preserve Consumer Discounts Without Your Help The effort to preserve dealer-assisted financing continues with NADA and its valued partners. With the introduction of H.R. 1737, Congress is continuing its bipartisan efforts to rescind the Con- sumer Financial Protection Bureau’s f lawed 2013 auto finance guidance. The House bill, “Reforming CFPB In- direct Auto Financing Guidance Act of 2015,” was introduced by Reps. Frank Guinta (R-NH) and Ed Perlmutter (D- CO) Lawmakers on both sides of the aisle recognize that the CFPB’s overreach into the automotive retailing industry would not only harm the intensely competitive indirect auto lending mar- ket but, most importantly, would harm consumers by limiting their ability to obtain discounted auto financing from their local dealers. How can this happen? The auto finance market is extremely competitive, with thousands of banks, credit unions and other lenders compet- ing to provide loans—and that competition drives interest rates down. Not only do dealers help customers tap into that mar- ket and find great financing options, but dealers can then discount those great rates even further. The financingmarket may be complicated, but the reality is not: Dealers help consumers save money on auto loans. That’s why 80 percent of new-car buyers chose to finance through their dealership. But the CFPBwants to eliminate this com- petitive marketplace and rate discounting. It has proposed an inflexible system of price fixing and flat fees that will destroy competition and lead to higher interest rates for everyone. Instead of protecting consumers, the CFPB’s policy to eliminate discounts in the showroom would prevent consumers from saving millions of dollars each year through dealer-assisted financing. H.R. 1737 would establish important con- sumer safeguards. First, it would require the CFPB to study the true impact on consumers before new guidance is issued. The bill also includes provisions for a public comment period; consulting with the agencies that share jurisdiction over the indirect auto financing market; and disclosing its testing methodologies prior to issuing any future guidance related to indirect auto credit. These are all steps every other federal agency must take before issuing market- altering rules or regulations. There’s no reason the CFPB shouldn’t be held to the same standard. The National Automobile Dealers Asso- ciation—and its 16,000 dealer members— applaud Congressional efforts to protect consumer interests. We applaud the leadership of Reps. Guinta and Perlmut- ter. And we stand behind our financing model and will work hard to make sure it is available for the benefit of customers nationwide. Be sure to urge your members of Congress to cosponsor H.R. 1737. To view the bill text and issue brief, visit www.nada.org/cfpb. For more informa- tion, contact NADA’s legislative affairs office at legislative@nada.org.