TO:                 NIADA Members

FROM:           Brett Scott, Vice President, Government Affairs

 

December started off with all eyes on the special run-off election in Georgia. The results did not favor the bold and the steady hand of Senator Raphael Warnock (D-GA) held onto his seat solidifying Democrat control of the Senate. This left what most bet on- Republican House- Democrat Senate & White House. The results? Gridlock.

 

Because November and early December was so focused on elections, a lot of critical legislation fell to the waste side, once elections were over, members scrambled to pass multiple large legislative packages. The National Defense Authorization Act (NDAA) and funding the government were the two (2) main focal points. The NDAA for the past 60 years has been passed with support from both sides of the aisle, but this time around- surprisingly there were some hiccups.  Two of the main issues were: 1. Continued funding of Ukraine and 2. Removing the mandatory COVD-19 vaccine for service members. On a high note, the bill did include a substantial pay raise for all service members. Immediately following agreement on the NDAA, the government needed some cash, quick. Within the next three (3) days, the President signed into law a $1.7 trillion omnibus package that did include the NDAA.

 

The legislation includes $772.5 billion for nondefense discretionary programs and $858 billion in defense funding.

The package included appropriations for previously agreed to legislation, such as the Honoring Our PACT Act that increased benefits for millions of veterans and the CHIPS and Science Act that boosted investments in key technologies. It also provides supplemental funding of $45 billion for Ukraine aid and $41 billion for disaster relief. 

Here is a look at some the bill’s most significant impact on federal agencies: 

·         Federal law enforcement: Overall, the Justice Department would receive a 10% funding boost under the omnibus. Much of the increase at Justice is for staffing at law enforcement agencies such as the FBI, Drug Enforcement Agency (DEA), and U.S. Marshals Service, which will be taking on new judicial protection responsibilities. Lawmakers provided $180 million more than the Biden Administration requested to "sustain and increase" hiring efforts at the Bureau of Prisons. The bureau must report to Congress on its recruiting efforts, as well as a review of the pay levels for its corrections officers.

·         IRS cuts: The Internal Revenue Service (IRS) is set to receive an appropriation of $12.3 billion, a 2% cut and the rare agency that would see its funding decrease. Democrats said the cut was due to modernization spending that was not provided as IRS can use unobligated funds from the American Rescue Plan. IRS is also in the midst of receiving an unprecedented boost of $80 billion over a 10-year period thanks to funding provided in the Inflation Reduction Act, though Democrats noted the spending surge was meant to supplement, not supplant, annual appropriations. In a key victory for IRS, Congress would award direct hiring authority to help the agency staff up and reduce the backlog of outstanding tax filing cases.

·         Border security: Border Patrol is in line for a whopping 17% funding boost, which includes the funding for 300 new Border Patrol agents that the Biden administration had repeatedly stressed as necessary to handle the record-high numbers of migrants crossing the U.S.-Mexico border. If Border Patrol is unable to meet the hiring goal, it can use the funds on other efforts to boost morale.

·         Veterans: The Veterans Affairs Department would see a 20% boost to its discretionary funding as it prepares to provide more health care services and benefits to victims of burn pits. After considerable debate, Republicans successfully blocked an effort by Democrats and the White House to shift some veteran’s health care funding to the mandatory side of the ledger. Democrats said it was necessary to protect veterans, while Republicans said it amounted to a gimmick to free up more funds for other initiatives across government.

 

The spending bill, which will keep the government operating through September – the end of the fiscal year, is the product of lengthy negotiations between top congressional Democrats and Republicans.

Congress originally passed a continuing resolution on September 30 to temporarily fund the government in fiscal year 2023, which began October 1.

 

AAMVA NMVTIS Stakeholder Webinar

No current actions as of this report.

 

Past Summary: On November 9, NIADA participated in the American Association of Motor Vehicle Administrators’ (AAMVA) National Motor Vehicle Title Information System (NMVTIS) Stakeholder Webinar. The webinar reviewed a number of items including an operator update, FY2022 highlights, plans for FY2023, program updates, law enforcement updates, a NMVTIS IT update, and a Department of Justice (DOJ) law enforcement update.

 

The operator update included a FY2024 state user fee notification issued to new states and the AAMVA Board establishing the NMVTIS Ad Hoc Committee to determine if there are factors to support the need for a formal governance structure and report findings and/or recommendations to AAMVA Board at 2023 meeting. Some FY2022 highlights include the support of North Dakota system modernization rewrite, support of five states with data synchronization activities to add/modify/ delete missing or outdated data, onboarding of two new Approved NMVTIS Consumer Access Providers, and continued support of law enforcement use of the Law Enforcement Access Tool (LEAT). For FY2023, plans include support two states developing NMVTIS solutions, support data integrity tools (conduct up to 12 state data synchronization initiatives), conduct pilot with states on use of NMVTIS for non-titling purposes, provide support to existing 17 Approved NMVTIS Data Providers, support development with two new providers and one existing provider, and continue NMVTIS stakeholder engagement efforts with two webinars.

 

Program updates included 50 states participating including Washington DC, one state still in development (Hawaii), a lot of activity and development work happening, seventeen approved providers to sell NMVTIS data, 12 serve individual and commercial consumers, and five serve commercial consumers only. The DOJ law enforcement update included data on 9044 users for LEAT with users continuing to increase, number of searches on LEAT has doubled, over 215,000 VIN searches, bulk searches possible, and the review of updating software program, partial VIN search, and engaging with FBI on their resources.

 

More to come on this initiative as we continue to engage with AAMVA and stakeholders supporting this issue.

 

Right to Repair

Current: NIADA continues to engage committee staff on this important issue and have had multiple meetings with new members bringing this to their attention. From these meetings, we continue to build out a coalition of outside stakeholders which broadens our outreach and strengthens the associations voice.

 

Past Summary: NIADA has begun engaging with the Hill and coalition partners on the right to repair issue to set it up for success in the 118^th Congress. NIADA met with the Auto Care Association to join their coalition, of which SEMA is a member, to see on how to best engage on this issue.

 

As it stands, the current legislation introduced by Congressman Bobby Rush (D-IL-1) will go nowhere during the Lame Duck, but there is a commitment by a number of members to cosponsor the legislation when it is introduced next Congress. From the looks of it, Congressman Brendon Boyle (D-PA-2) will introduce this legislation next Congress. This legislation will require a different strategy with a Republican controlled House of Representatives, and NIADA is meeting with House Energy and Commerce staff in December to see how we can acquire Republican support for the legislation.

 

 

FTC Issues:

No current action for this report.

Past Summary: NIADA partnered with other outside stakeholders and produced a “call to action” on the FTC’s recent auto marketing proposed rule. As a result, Congressman Kelly Armstrong (R-ND-AL) sent a letter to Federal Trade Commission (FTC) Chair Lina Khan requesting that the FTC withdraw its proposed auto marketing rule and instead issue an Advanced Notice of Proposed Rulemaking (ANPRM). This bipartisan, bicameral letter was signed by 41 House members and six Senators.

The FTC’s proposed auto marketing rule would overwhelm car buyers and small businesses with additional paperwork and needlessly lengthen the sales process. The rule was proposed without credible data-driven analysis or the necessary time for public comment, as the FTC allowed only 60 days for the public to review this rule, despite its widespread impact on consumers and small businesses. The agency also denied a routine request to extend the public comment period.  (Note: The FTC’s proposed “vehicle shopping” rule is unrelated to the FTC’s recently delayed “Safeguards” rule.)

More to come as this particular issue gains more bi-partisan support and we look to engage with multiple committees to address this issue.

Past Summary: NIADA and other leading industry associations submitted comments outlining concerns this proposed rule would have on the auto industry. In addition, there currently is a letter circling through Congress asking the FTC to extend the comment period for this proposed rule.

 

Past Summary: Extension was denied by the Federal Trade Commission (FTC), and NIADA plans to submit comments by the original deadline of September 12^th.

 

Past Summary: NIADA in coordination with NADA, AFSA, GAPA, AIADA, and other industry stakeholders submitted comments requesting an extension on the comment period from 60 to 120 days. NIADA’s letter outlined the large amount of data and leg work needed to address all of the requests in the proposed rule. More details to come as the FTC reviews all comments submitted.  comment period.

 

Past Summary: The FTC issued a proposed rule to ban junk fees and bait-and-switch advertising tactics that can plague consumers throughout the car-buying experience. As auto prices surge, the Commission is seeking to eliminate the tricks and traps that make it hard or impossible to comparison shop or leave consumers saddled with thousands of dollars in unwanted junk charges. The proposed rule would protect consumers and honest dealers by making the car-buying process clearer and more competitive. It would also allow the Commission to recover money when consumers are misled or charged without their consent.

The notice includes questions for public comment to inform the Commission’s decision-making on the proposal. These include questions about provisions in the proposed rule and whether other provisions should or should not be included in the rule, as well as questions related to the costs and benefits to consumers and auto dealers of the proposed rule. In addition, the notice includes a preliminary regulatory analysis estimating that the net economic benefit of the rule would be more than $29 billion over ten years. After the Commission reviews the comments received, it will decide whether to proceed with issuance of a final rule. NIADA will be submitting comments to this proposed rule and will keep members aware of the progress.

 

CFPB Issues

Current: CFPB recently published a blog post and press release in coordination with their New York office targeting subprime auto leader company, Credit Acceptance. NIADA has been in conversations with other associations on if or at all we want to engage on this particular issue.

 

Past Summary: In September 2021, the CFPB issued a subprime auto lending report. On February 24^th, it published an auto lending disclosure blog. On February 28^th, it issued an illegal repossession compliance bulletin. On March 16^th, the CFPB announced that it will be targeting unfair discrimination in consumer finance. The CFPB will examine for discrimination in all consumer finance markets, including credit, servicing, collections, consumer reporting, payments, remittances, and deposits. CFPB examiners will require supervised companies to show their processes for assessing risks and discriminatory outcomes, including documentation of customer demographics and the impact of products and fees on different demographic groups. The CFPB will look at how companies test and monitor their decision-making processes for unfair discrimination, as well as discrimination under ECOA.

 

Past Summary: NIADA and CFPB staff held a successful phone call to discuss multiple issues facing the industry. More specifically, NIADA members discussed how dealers have handled the COVID-19 pandemic, increased car prices, and how dealers are helping consumers during these difficult times. CFPB staff were appreciative of the feedback and look to continue having an open dialogue.

 

H.R. 6394 and S. 5024 PART Act

Update: NIADA participated in a large stakeholder meeting held at NADA headquarters. Those that attending encompassed Senator Amy Klobuchar (D-MN) staff, Congressman Jim Baird (R-IN-4) staff, NADA, RV Dealer Association, American Car Rental Association, NAAA, and others that all have a dog in the fight. The outcome of the meeting was to address some concerns other associations have and what the next steps would be to get this legislation across the finish line. Next steps are to continue engaging both House & Senate staff and explore any opportunities to attach this bill to a larger package or a stand-alone bill.

 

Past Summary: On November 15, Senator Klobuchar (D-MN) and Senator Wyden (D-OR) introduced a companion Senate version of the bill. The legislation would ensure that law enforcement can more effectively address these thefts by marking each converter with a traceable identification number and establishing converter theft as a criminal offense. Specifically, the Senate companion would:

 

·         Require new vehicles to have a Vehicle Identification number (VIN) stamped onto the converter to allow law enforcement officers to link stolen parts to the vehicle from which they originate;

·         Create a grant program through which entities can stamp VIN numbers onto catalytic converters of existing vehicles;

·         Improve record keeping standards for purchasers of used catalytic converters; and

·         Establish enforceability of laws around catalytic converter theft by codifying these crimes as a criminal offense.

 

Past Summary: During the National Policy Conference, there were rumors flying that a Senate companion bill will be introduced in the coming weeks by Senator Klobuchar (D-MN) but nothing has been released as of this writing.

 

Past Summary: House version- Multiple new Members of Congress have become co-sponsors of this particular bill as NIADA continues to lobby on the importance of this legislation to Members of Congress.