Top Legislative Priorities
The Federal Trade Commission (FTC) recently proposed a “vehicle transaction” rule that 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 to avoid unintended consequences to consumers and small businesses. Unfair and deceptive practices in vehicle sales or financing are already illegal, and they should continue to be policed by federal regulators. However, the FTC’s proposed rule would make the auto buying experience worse, not better, for consumers. As the auto industry works to streamline the purchase process in the aftermath of the pandemic, the FTC’s proposals will swamp dealers and car buyers with greater inefficiency and complexity.
The FTC’s “ready-fire-aim” rule needs to go back to the drawing board. The agency has allowed only 60 days for the public to review this rule, despite its widespread impact on consumers and small businesses. Moreover, the data the FTC relies upon to support its rule is either unverified, previously rebutted, anecdotal, or non-existent. It is especially concerning that the agency denied a routine request for an extension of the public comment period. To avoid a rush to judgment, Members of Congress are urged to weigh in with the FTC to ensure that this rulemaking process is fair and based on valid research and data rather than assumptions.
Vehicle assembly plants and suppliers around the globe ceased or slowed production during the pandemic, drastically reducing new vehicle inventory. The shortfall worsened with the worldwide shortage of semiconductors, which are essential to complete vehicles manufactured today. With no way to replenish vehicle inventory, dealers using the last-in, first-out (LIFO) method of accounting face major unanticipated tax liability due to circumstances beyond their control. The Treasury Department has existing authority (Sec. 473 of the Internal Revenue Code) to allow LIFO relief to businesses if a “major foreign trade interruption” makes inventory replacement difficult. Despite NADA’s petition and broad bipartisan support for Treasury’s use of Sec. 473, Treasury has declined as it believes additional legislative authority is needed. The “Supply Chain Disruptions Relief Act” (H.R. 7382/S. 4105) explicitly provides Treasury such legislative authority. Treasury recently indicated its support for a legislative solution to this issue and that they will work cooperatively with Congress to that end. Congress should pass H.R. 7382/S. 4105 this year to allow businesses on LIFO extended time to replace vehicle inventories as pandemic-related global disruptions and reduced auto production have made it nearly impossible to replenish new vehicle supply.
Catalytic converters are being stolen at increasingly higher rates due to their valuable metals, such as rhodium, platinum and palladium. Thefts reported in insurance company claims has sharply increased over the past three years, and the National Insurance Crime Bureau estimates that these thefts increased by 326% in 2020 and increased another 353% in 2021. Thieves can easily steal catalytic converters from unattended vehicles, and since catalytic converters are not readily traceable there is a lucrative market for these stolen parts. These thefts are costing businesses and vehicle owners millions of dollars. H.R. 6394, the “Preventing Auto Recycling Theft Act” (PART Act) would assist law enforcement in their efforts to combat this crime by providing a national framework that would mark catalytic converters, establish federal criminal penalties, and create a more transparent market that deters its theft. NADA and 14 other groups sent a letter to House Energy and Commerce Committee leaders in support of the PART Act. Members of Congress are urged to cosponsor H.R. 6394 to address the growing national problem of catalytic converter theft.
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NADA Legislative Affairs Staff
About Legislative Affairs
Learn how NADA Legislative Affairs protects and promotes franchised auto and truck dealerships' interests before Congress. Find the latest legislation affecting the automotive retail industry, including issues such as auto finance, tax policy, vehicle commerce, fuel economy and the environment, as well as grassroots.