Westcott: Keep defending reserve
Photo credit: JOE WILSSENS
NEW ORLEANS -- NADA must continue to defend in-dealership financing or the car-buying public will suffer, outgoing NADA Chairman David Westcott told dealers today.
Westcott criticized the Consumer Financial Protection Bureau's scrutiny of dealer reserve practices that the agency claims can result in unintentional discrimination. The CFPB is trying to coerce the industry into adopting flat fees for arranging loans, he said in his farewell speech at the convention.
"If the CFPB gets its way, what happens?" said Westcott, a Buick-GMC dealer in Burlington, N.C. "Consumers will lose the ability to see if dealers can meet or beat an offer from their bank. This will harm competition. This will harm customers. And the customers who will suffer the most are those who have the least."
He touted a new program, announced by NADA on Friday that would help dealerships set a percentage ceiling on its reserve and then document the reasons for variations below that ceiling. NADA will hold a special workshop on the program at 2:30 p.m. on Monday.
NADA also needs to develop initiatives for securing the valuable consumer data in dealership computers, Westcott said. NADA is offering workshops and webinars on the subject. Dealers should be cautious about who is allowed to access that data, Westcott said.
"It's your obligation to protect it," he said. "There are a number of complicated issues you need to know before you agree to allow anyone access to your computer system."
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