Washington Update NIADA Government Report

WASHINGTON UPDATE

NIADA Government Report

Brett Scott, NIADA Vice-President of Government Affairs

NIADA is your voice

in Washington D.C.,

advocating for independent dealers, the used vehicle industry and small business. Here’s a look at the latest news and NIADA efforts regarding legislative, regulatory, PAC and grass roots activities.

Legislative

The final version of President Biden’s massive $1.9 trillion COVID relief package, dubbed the American Rescue Plan, was passed by the House of Representatives on March 10 and was signed into law the next day.

The bill passed the Senate 50-49 with no Republican votes in favor and the House 220-211 with one Democrat – Rep. Jared Golden of Maine – voting against.

The package includes direct payments of $1,400 for individuals earning up to $75,000 per year, $2,800 for married couples earning up to $150,000 and an additional $1,400 per dependent, as well as increasing the child tax credit to as much as $3,600 per child.

In addition, the bill extended the $300 per week federal addition to unemployment benefits through Sept. 6 and provided a tax break on the first $10,200 of unemployment benefits received in 2020.

Democratic leaders had pushed for $400 a week in unemployment but lowered that number in a deal with Sen. Joe Manchin (D-W.Va.), who said he would vote against the higher amount.

Other provisions include an additional $7 billion for the Paycheck Protection Program, $350 billion in aid to state and local governments, $14 billion for vaccine distribution and $130 billion for schools to reopen safely.

The bill does not include a couple of items on the Democrats’ wish list.

For one, the $15 per hour federal minimum wage included in the original House version of the bill was removed by the Senate. An amendment by Sen. Bernie Sanders (I-Vt.) to add it to the Senate bill failed by a 58-42 vote, with eight Democrats voting against it.

Regulatory

Consumer Financial Protection Bureau: The Senate Banking Committee was split on Rohit Chopra, President Biden’s choice for CFPB director, following his March 2 confirmation hearing.

The committee’s vote ended in a 12-12 tie, split along party lines. Following the agreement reached by Democratic and Republican leaders for sharing power in the 5050 Senate, Chopra’s nomination advanced to the full Senate without the committee’s recommendation.

A final confirmation vote was expected by the end of March. Chopra was expected to be confirmed, with Vice President Harris casting the deciding vote in the event of a 50-50 tie.

In his hearing, Chopra made it clear he intends the CFPB to return to the regulation by enforcement philosophy of former director Richard Cordray, citing the Equal Credit Opportunity Act and credit reporting and debt collection as areas that need additional enforcement.

He also said he would make the CFPB’s expectations clear to market participants and said the bureau should use its enforcement authority to protect small businesses.

While Chopra awaits confirmation, interim CFPB director Dave Uejio rescinded a policy of Trump Administration director Kathy Kraninger limiting the abusive acts and practices standard created by the 2010 Dodd-Frank Act.

The move gives the bureau broad discretion to define “abusive” acts, which are not defined by the legislation.

Federal Reserve: The Fed announced it will extend the Paycheck Protection Program Liquidity Facility through June 30.

The PPPLF was scheduled to expire March 31. The Fed said it would let other emergency lending programs expire on that date.

The PPPLF allows the Fed to expand the reach of the PPP by offering low-interest loans to lenders through the facility and giving non-depository institutions their first access to Fed financing.

Grass Roots

Illinois: Illinois IADA is opposing a bill that would require all vehicles registered in the state to have starter-interrupt devices installed.

The bill, HB3216, would allow the device to be activated by law enforcement at the vehicle owner’s request, but adds it cannot be activated “solely as a means to secure payment on the vehicle.”

The bill, introduced by Democrat Justin Slaughter, has been assigned to the House Transportation: Vehicles and Safety Committee.

In addition, a bill that would subject all loans – including auto financing – to the restrictions of the federal Military Lending Act has been passed by the legislature and was awaiting the signature of Gov. J.B. Pritzker as of press time.

SB1792 includes a provision called the Predatory Loan Prevention Act, which imposes a 36 percent rate cap but uses the MLA calculation for annual percentage rate, which includes the cost of voluntary goods, services and insurance products – including GAP coverage and other ancillary products that have value to consumers.

The result of that would effectively prevent Illinois dealers from selling those products.

Several business organizations, including the American Financial Services Association, have urged Gov. Pritzker to veto the bill. If he does not veto or sign the bill by April 6, it automatically becomes law.

If it does, however, bills have been introduced in both houses of the state legislature to correct that issue.

HB3192, introduced by Democrat Jonathan Carroll, and SB2306, sponsored by Republican Sue Rezin, both would amend the Predatory Loan Prevention Act by replacing all references to the Military Lending Act with the Truth in Lending Act, which does not include voluntary add-ons in its APR calculation.

Rezin said her bill would “continue to allow mainstream financial institutions to offer convenient, well-regulated auto loans to Illinois consumers through Illinois’ auto dealerships.

“Consumer protection for Illinoisans is critical, which is why my bill strikes a balance between protecting Illinois consumers and ensuring safe access to automobile credit.”

Brett Scott is NIADA vice president of government affairs.