April 13 2020

Nebraska Independent Auto Dealers Association 

NIADA Washington Update
By Shaun Petersen 
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 and grass roots activities.
As it became apparent the COVID-19 outbreak was going to have far-reaching implications on the automotive industry and the nation as a whole, NIADA took a leading role in advocating for Congress to pass legislation to help independent dealers and other small businesses get through the crisis.
Dealers responded to the association's call to action, telling their representatives and senators to vote for the Coronavirus Aid, Relief and Econo mic Security (CARES) Act, a $2.2 trillion relief package that was passed and si
The CARES Act provides significant economic aid to small business, including $349 billion in loans for paid sick or medical leave, employee salaries, mortgage or rent payments, utilities and any other debt obligations, with opportunities for loan forgiveness.gned into law by President Trump on March 27.
NIADA also weighed in at the White House, writing a letter calling on the Administration to include auto sales as an essential service permissible during the emergency situation in guidelines issued by the Department of Homeland Security and the Cybersecurity and Infrastructure Security Agency.
The CARES Act represents phase three of the federal government's response to the pandemic. And even though Congress adjourned soon after it was passed and remained in recess for most of April, discussion about a likely phase four bill is already ongoing.
While at press time there was no clear picture of what that bill might look like, the President joined congressional Republicans and Democrats in acknowledging individuals and small businesses need more help.
In an April 6 phone call, Speaker of the House Nancy Pelosi (D-Calif.) told House Democrats the phase four package should include at least another $1 trillion in aid, including resources for health care workers and expanded unemployment benefits.
President Trump said the next phase could include another round of direct payments to individuals. And Senate Majority Leader Mitch McConnell (R-Ky.) said in a statement that Paycheck Protection Program - the CARES Act's small business loan plan - needs more funding.
NIADA made its voice heard in the phase four debate by signing on to a letter from the American Society of Association Executives to Congress and the Administration asking them to include associations in Small Business Administration loan expansion and other programs to help combat financial loss due to COVID-19.
Kathy Kraninger, director of the Consumer Financial Protection Bureau, contacted NIADA seeking input ab
out how the coronavirus situation is affecting the used car market and the used car finance market.
On April 9, an NIADA contingent including CEO Steve Jordan, NIADA secretary Jeff Baker of Car City in Michigan, MCMC Auto president Michael Thomasson and myself met with Kraninger via conference call.
That group provided the director with an overview of COVID-19's impact on sales, and portfolio performance, and what we anticipate from portfolio performance in the weeks and months ahead.
We discussed things dealers are doing to help consumers who have been adversely affected in the marketplace. Buy Here-Pay Here dealers Baker and Thomasson explained some of the arrangements they've made with their customers, such as payment deferrals and loan modifications.
We also talked to Kraninger about things the CFPB can do to help our industry during this crisis.
First and foremost, we asked her to use her platform as head of the federal government's consumer financial watchdog to urge the Secretary of the Treasury and the Small Business Administration to clearly state that BHPH dealers' related finance companies are eligible to receive forgivable loans through the SBA's Paycheck Protection Program.
The purpose of the PPP loans is not to turn around and lend money - it's to keep people on the payroll. In fact, in order for the loan to be forgiven, 75 percent of the money must be used on payroll.
We also asked her for additional clarity on credit reporting practices, particularly to address concerns regarding coding and other specifics we believe need additional clarification or guidance.
Kraninger indicated she is willing to help with both issues and has already begun working with credit bureaus about further guidance on credit reporting.
In addition to writing the President, NIADA sent letters to all 50 governors as well as the National Governors Association, National League of Cities, National Association of Counties and the U.S. Conference of Mayors urging state and local governments to include vehicles sales among the essential services permitted to remain open during any lockdown ordered imposed by those governments.
Again, those governments have responded to that call.
At press time, 10 states had specifically designated auto sales as an essential business. Several states - among them, Arizona, Colorado, Indiana, Maryland, Michigan and New York - initially ordered dealerships to shut down but reconsidered, amending or clarifying stay-at-home orders to allow them to operate in some form.
Auto sales in some form were permitted in the majority of the states that have issued restrictions on businesses. Some states, such as Delaware, Kentucky, Michigan, New Jersey, Colorado, Illinois and Minnesota, limited dealers to sales conducted online or by appointment.
Shaun Petersen is NIADA's senior vice president of legal and government affairs.