Pub 2 2024 Issue 3

NADA Update By Michael Joe Cannon, NADA Director I hope your year is going well. As we all know, there is plenty going on in Washington on the issues important to our industry, and I am happy to report on the work of NADA. First, an issue that is front and center for many of our businesses: the cyber incident that shut down CDK’s dealers’ systems. I do not need to emphasize the impact this has had on auto retailers across the country. This is a forceful reminder to the automotive retail industry — including dealers, ATAEs and the vendors we work with — to remain vigilant and proactive in the protection of our data. NADA has numerous resources for strengthening compliance in data protection, including the recently updated NADA Safeguards Driven Guide. This can be found on the NADA website. While dealers work to manage these challenges, one positive development is the FTC’s recent acceptance of NADA’s proposal — made in coordination with CDK — to allow CDK to file a consolidated breach notification with the FTC on behalf of its dealer clients if CDK determines that this new federal notification requirement has been triggered. While dealers still must contend with state breach notification requirements, dealers now have no obligation to file a breach notification with the FTC related to this matter. Next, most of you are well-informed about NADA’s strong opposition to the Federal Trade Commission’s (FTC) Vehicle Shopping Rule (VSR), which was finalized in December 2023. NADA is actively challenging the onerous VSR on multiple fronts, and we have progress to report. NADA commissioned an updated study from the Center for Automotive Research, which found that the final VSR will require at least an additional hour to complete the vehicle purchasing process and generate a net cost to consumers and dealers of $24.1 billion over 10 years. Armed with this information, NADA has been able to push a provision in the House Financial Services and General Government appropriations funding bill for Fiscal Year 2025, which would stop the FTC from implementing or enforcing the VSR until Sept. 30, 2025. This bill passed the House Appropriations Committee and was scheduled to be considered on the House floor at the end of July. Meanwhile, NADA and the Texas Automobile Dealers Association continue to challenge the rule in the U.S. Court of Appeals for the Fifth Circuit. Our arguments here are that the FTC failed to follow its own rules when it issued the rule, the record it assembled does not support the rule’s new mandates, and the FTC failed to adequately consider the rule’s costs and benefits to consumers and dealers. The case will be assigned to a three-judge panel, and oral arguments could begin as soon as September. Finally, I’ll turn to the emissions regulations, which are now coming from two regulatory bodies: the Environmental Protection Agency (EPA), through its final greenhouse gas rule released in March, and the National Highway Traffic Safety Administration (NHTSA), through its final Corporate Average Fuel Economy (CAFE) standards released in June. These rules align along the same percentages for zero-emissions new vehicles that will need to be sold from 2027 through 2032. As we all know from the lack of interest from our customers, selling electric vehicles is a challenge. NADA’s position is that these rules are far ahead of the market and consumer demand. NADA has supported joint resolutions as part of the Congressional Review Act to disapprove of the final EPA rule and stop it. We will support similar measures disapproving the NHTSA CAFE rule. Stay in touch with your Members of Congress and Directors. And utilize the many valuable resources included in your NADA membership. Thank you for allowing me to serve as your Mississippi NADA Director. 15

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