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June 7, 2010
www.usedcarnews.com
Dealers Face New Federal Regulations By Ted Craig
Selling cars will become much more complicated after Congress finalizes its financial reform law. The U.S. House of Representatives passed its version of the bill last year, but the Senate waited until after the health c a r e debate Tom ended. Hudson T h e w i d e ranging bill covers all aspects of finance from credit derivatives to car sales. The National Automobile Dealers Association, the National Independent Automobile Dealers Association and the American International Automobile Dealers Association all worked to get dealers exempt from some of the rules.
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But even if they succeed, it will only be a partial cure. Congress was still working on a final version of the bill at press time. The so-called Brownback Amendment only covers dealerships assisting consumers in obtaining financing. As Sen. Sam Brownback makes clear in a press release about his proposed amendment: “any dealer that does originate its own loans will not be exempted by the Brownback language.” Only dealerships with service departments qualify for the exemption, according to attorney Tom Hudson. Auto finance will change regardless of how dealers are treated because of the new Consumer Financial Protection Agency. This new body make take all sorts of actions, such as creating a national usury cap. “These people don’t know anything about the industry they’re trying to regulate,” Hudson said. “They’re trying to make fine distinctions without knowing how the business works.” Dealers should start preparing for this new regulation now, he said. Hudson recommends joining trading associations, following all the news available about the law and gathering all the information available for the government. Dealers should also review all their forms and read through their retail installment contracts.
Photo by Robert Farley TAKING CHARGE: Anthony Underwood, owner of Anthony Underwood Automotive in Bessemer, Ala., prepares to take over the National Independent Automobile Dealers Association.
Former Quality Dealer to Lead NIADA Alabama dealer Anthony Underwood will take the reins of the National Independent Automobile Dealers Association at the group’s convention in Las Vegas this month. Underwood’s achievement marks a milestone for the NIADA as becomes its first AfricanAmerican president. He prefers to downplay the significance, though. “Maybe I’m naive, but over the past few years, it seems like people don’t seem to give as much thought (to race) as they have,” he said. The owner of Anthony Underwood Automotive in Bessemer, Ala., is more interested in ways he can help the dealer community. “Just being president is an honor to me,” Underwood said. “I’m proud to be asked to serve on the association in the first place.” He sees his role as selling the value of the association to other dealers. “The value far exceeds the small price of membership,” Underwood said. “ It’s one bill I get that I know I’ve received more value than what I’ve paid out.” He also sees a need to elevate the image of used-car dealers among the general public. “We’re the greatest recyclers in the world,” Underwood said. “We take something that a person doesn’t want anymore and we turn it around, add value to it and sell it to someone. That’s a good thing.” Underwood was the NIADA’s National Quality Dealer for 2003. See Underwood’s interview on page 8.
IN THIS ISSUE • Collections are more more critical than ever. – Page 3
• Credit becomes more available for top operators. – Page 10
• Site allows dealers to host customer reviews. – Page 4
• Enforcement of Red Flags Rule is delayed yet again. – Page 16
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