NIADA Government Report, June 2021

Washington Update
NIADA Government Report
By Brett Scott

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

Infrastructure: At press time, negotiations were ongoing as Senate Republicans and Democrats attempted to reach a bipartisan deal on the Biden Administration’s massive infrastructure plan.

President Biden had proposed a $2.25 trillion bill that expanded the traditional definition of infrastructure to include areas such as education, health care and child care, among others. Republicans countered with a $586 billion proposal focused on transportation, water and broadband.

Last month, Democrats lowered their offer to $1.7 trillion by reducing proposed spending on roads, bridges, major infrastructure projects and broadband improvement, and shifting funding for small businesses and supply chain improvements to a separate bill.

Republican negotiators, led by Sen. Shelley Moore Capito (R-W.Va.), were preparing another counterproposal, which was expected to be close to $1 trillion but would still stick to traditional infrastructure.

“I think we were pretty clear on where we define physical infrastructure and I think the American people are behind us on this,” Capito said.

Paying for the infrastructure upgrades is also a matter of fierce debate.

The Administration hopes to do it by raising the corporate tax rate from the current 21 percent to 28 percent for those with income of more than $400,000 – a plan opposed by NIADA.

Comprehensive Debt Collection Improvement Act: H.R. 2547, introduced by Rep. Maxine Waters (D-Calif.), could have a “devastating” effect on the repossession industry, according to the American Recovery Association.

In a statement reported by Auto Remarketing, ARA said the bill would reclassify repossession agents as debt collectors rather than enforcing a security interest as they are now, which would subject them to restrictions of the Fair Debt Collections Act.

ARA said that would “make repossession activity unbelievably complicated and legally risky.”

The bill was passed by the House by a slim 215-207 margin in a nearly straight party-line vote – one Democrat, Kurt Schrader of Oregon, voted against it.

It now goes to the Senate, which is split 50-50 between the parties, but because it likely is not eligible for the budget reconciliation process, it will need 60 votes to pass.

 

REGULATORY

Consumer Financial Protection Bureau: Dealers from the NIADA Buy Here-Pay Here Commission met last month via conference call with senior members of the CFPB staff in NIADA’s first interaction with the bureau since the new Administration took over.

Auto finance program manager Damion English and Michele Scarbrough of the CFPB were very receptive to NIADA’s input and suggested a regularly scheduled call each quarter to discuss issues relevant to independent BHPH and retail dealers.

Representing the BHPH Commission were chairman Don Griffin, Darla Booher, Scott Allen, Nick Markosian and Sam Snellenberger.

Federal Trade Commission: A decision by the Supreme Court has made it more difficult for the FTC to force businesses accused of violating the law to pay back consumers.

In AMG Capital Management v. The Federal Trade Commission, the court ruled unanimously that the FTC does not have the legal authority to order monetary relief without going through administrative and court proceedings.

In his majority opinion, Justice Stephen Breyer said the FTC Act spells out “two enforcement avenues,” only one of which allows monetary relief.

To do that, the FTC must “file a complaint against the claimed violator” and “adjudicate its claim” before issuing a cease and desist order. Only then can it go to court to seek monetary redress.

For the past 40 years, the commission has ordered businesses to pay using the other, much simpler, “enforcement avenue” – bypassing the administrative process and going directly to court to obtain an injunction – but the Supreme Court ruled that route violates the language of the law.

Acting FTC chairwoman Rebecca Kelly Slaughter said the decision “has deprived the FTC of the strongest tool we had to help consumers when they need it most,” adding the commission has returned $11.2 billion to consumers over the past five years.

 

PAC

NIADA-PAC’s Coffee With Congress series kicks off this month with three virtual events that will give NIADA members a chance to interact with the U.S. representative from their congressional district.

It begins June 3, when independent dealers from Alabama’s fourth district will be able to have a virtual coffee with Rep. Rick Aderholt.

On June 9, Rep. Mike Rogers of Alabama’s third district will stop by online to chat with association members from his district.

And on June 18, Rep. Buddy Carter will join dealers from Georgia’s first district, along the Atlantic coast.

More events will be announced throughout the year, so keep an eye out for one in your district – and you could be having Coffee With Congress.

 

GRASS ROOTS

Arizona: Arizona dealers have been making their voices heard regarding a bill that would make it easier for them to get a tax exemption – thanks to NIADA and some new technology.

Under current law, if a dealer sells a vehicle to an out of state buyer, the sale is exempted from the transaction privilege tax only if the dealer delivers or ships it out of state. The bill, SB1146, would remove that requirement for the exemption.

Arizona IADA’s lobbying efforts got a significant boost from its members, who flooded legislators with letters supporting the bill sent through the OneClickPolitics platform, which provides a template that makes it easy to engage with legislators.

The bill came up just short of passage in the Senate, but it has been added to the upcoming budget bill to try to get the necessary votes. If it doesn’t, it will come up again in the 2022 legislative session.

California: A policy change by the state’s Department of Motor Vehicles has opened the door for fully digital auto sales for the first time.

The DMV announced it is now accepting digital signatures on all vehicle contracts sent to the department, giving California auto dealers the ability to complete a sale online from start to finish via computer or smartphone.

“Enabling fully digital vehicle sales and titling securely online is the latest way we’re improving DMV customer service,” DMV director Steve Gordon said.

 

Brett Scott is NIADA vice president of government affairs.