NIADA Leaders Lobby Congress in D.C.

By Jeffery Bellant November 11, 2019


Leaders of the National Independent Automobile Dealers Association returned enthused and challenged from their annual Day on the Hill and National Policy Conference in Washington, D.C., last month.

“We had more than 235 people at the event,” said NIADA’s Shaun Petersen, senior vice president of legal & government affairs.

It’s a far cry from the first year when about 80 to 90 dealers attended. Petersen said a core group that first attended has continued to come, and that core has expanded each year.

The underlying goal is making sure members on the Hill understand NIADA and its mission.

NIADA’s trips always seem to fall in the middle of news events. One year, the Day on the Hill took place as Republicans voted on their new House speaker. Last year’s event took place in the midst of the Bret Kavanaugh Supreme Court nomination hearings and this year’s event took place as the impeachment investigation began.

But NIADA had its own priorities.

“This year we had four legislative issues that we took up on the Hill,” Petersen said.

Those included: arbitration, a new credit loss accounting standard, the USMCA and safety recalls.

Petersen said the arbitration issue has come up in a bill which has passed the House and would prohibit a pre-dispute arbitration agreement.

“It would have a direct negative impact on our members,” Petersen said.

A similar bill came up for a Senate vote a couple of years ago but Vice President Mike Pence broke a deadlock to defeat it.

On the credit loss issue, Petersen said the Financial Accounting Standards Board implemented a new accounting standard that would drastically change how banks and finance companies account for reserve for expected credit losses.

“The negative impact of that new standard would diminish the accessibility of credit to not only our customers but it would impact dealers as customers that work with banks and finance companies,” Petersen said.

In recent weeks the FASB has voluntarily extended the implementation date of this standard for a couple of years, Petersen said.

The USMCA remains up in the air, especially with the partisan divide and the impeachment inquiry.

The fourth issue is not unfamiliar to NIADA members.

Henry Mullinax, NIADA president, said the recall issue remains an annual point of discussion for the D.C. trip.

Sen. Richard Blumenthal has continued to push legislation that would make it illegal to sell any car with an open recall.

“It’s a drop-dead, no-sale bill,” Mullinax said. “They don’t think about the repercussions for the consumer.”

A consumer who owns a car with an open recall wouldn’t be able to sell it, trade it or – in some cases – repair it.

Since these manufacturer recalls rely on franchise dealers for repairs, that puts the non-franchise customer and independent dealer at the back of the line.

“The franchise dealers, if they have parts, will take care of their own cars first,” Mullinax said. “The second group they take care of is their customers. The third would be any other consumer and the last group would be independent dealers.”

Mullinax said the industry already has an example of what the legislation might look like in action.

Mullinax said AutoNation, the nation’s largest auto retailer, stopped selling cars with all open recalls a few years back. The firm eventually had to change course after a dip in stock prices and seeing their capital tied up in unmovable cars.

Th compromise of disclosing open recalls allows cars to be sold, while not ignoring the need for repairs.

Mullinax said the 2020 elections will play a huge role in the future of this issue.

Overall, dealers remain optimistic about NIADA’s efforts.

Gordon Tormohlen, president of Tormohlen’s Good People Automotive in Freeport, Ill., has been to all of NIADA’s Washington trips.

He said during those early trips, dealers weren’t going in lecturing lawmakers on what they need to do.

“So those early meetings were very positive, although many of the (legislative staffers) didn’t have a clue that we existed,” he said. “They didn’t know what the independent industry was compared to the franchises.”

Over the years. it’s changed and lawmakers and their staffs know the NIADA and know more about independents.

“They listen,” Tormohlen said. “I have found that has improved every single year. They’re more than willing to sit down and hear you out. Even if there are disagreements, no one gets disrespectful about it.”

He said lobbying efforts are not limited to the annual National Policy Conference. Making connections at the state level and speaking with lawmakers in their home districts is part of building fruitful relationships.

“There are a number of state (associations) that have outstanding relationships with their legislators,” Tormohlen said.

The NIADA’s PAC fund is also a critical part of the effort. In 2018, the association raised over $200,000 for the PAC, which is used strategically to support candidates that stand with NIADA on issues.

“It’s the mother’s milk of politics,” said Tormohlen, who also serves as NIADA treasurer.

The critical element is meeting with lawmakers and their staffs as a group of dealers.

“They like to hear from the dealers,” Tormohlen said. “Particularly, they like to hear from the dealers who have five or 10 employees.”

These meetings help officials understand parts of the business that they might not have otherwise thought about.

Tormohlen added that one of the encouraging parts of this process is seeing how dealers are in it for the long haul.

“It shows in attendance,” he said. “If you attend one of these things, there’s a 95 percent chance you’re going again.”

A typical conference involves meeting with what Tormohlen called the “alphabet soup” officials, like the FTC (Federal Trade Commission), EEOC (Equal Employment Opportunity Commission) and the CFPB (Consumer Financial Protection Bureau).

“They are way more open to sitting down to discuss and be open with us now,” he said. “We had the CFPB director there this year, sitting in a chair, having a conversation about what she thinks is important. It was good information for dealers to have.

“It was also good for her to get a feel of who we are – that we’re not just a bunch of guys in plaid sportscoats wanting to make money. We’re concerned about getting the bad players out of the industry as well.”

Tormohlen said dealers should make the trip.

“It’s an inspirational city, it truly is,” he said. “To be there in that setting and actually have a voice with the people who are legislating now and know they are listening to you – it’s just a fantastic experience.”





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Last modified on Monday, 11 November 2019 16:24

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