Turning 100

It began in 1917, when Congress planned to impose a 5% luxury tax on new vehicles. In response, a group of 30 dealers traveled to Washington, where they successfully argued the automobile is a necessity, not a luxury. The tax was reduced and the National Automobile Dealers Association (NADA), which turns 100 this year, has been fighting for dealers ever since.

Welcome to F&I and Showroom’s special NADA issue, which contains, among other things, a one-on-one interview with 2017 NADA Chairman Mark Scarpelli. He provides his take on what I believe will be a hot topic at this year’s NADA Convention & Expo. Before I tell you what it is, I’d like to do a little reflecting.

See, my history with the association only goes back a decade, but a lot has happened in that time. And from my interactions with the NADA — mainly its legal and regulatory affairs team — I can honestly say dealers really do have the best representing their interests.

For instance, I always appreciated how the association navigated the 2012 dustup between dealers and TrueCar — even though I know its directors were concerned about potential privacy issues emerging from the firm’s required DMS connection. But rather than adding fuel to the fire, the association studied all the issues, met with key stakeholders and delivered its dealer data guidance in August 2013, more than a year after the fight had ended.

The association also put forth an unprecedented effort to educate dealers on the Federal Trade Commission’s Red Flags Rule, staging three webinars that reached more than 1,000 dealerships and 36 seminars around the country. It also published a guide designed to help dealers comply with a rule meant to protect consumers from identity theft. But here’s the kicker: It did all that a year before the FTC began enforcing the rule in June 2010.

And let’s not forget the credit score exception notice the NADA successfully negotiated ahead of the Risk-Based Pricing Rule’s Jan. 1, 2011, effective date. But it didn’t stop there. Days after the rule took effect, the association asked for formal guidance from the FTC on whether the rule applied to dealers who do not obtain a copy of a credit report but instead leave it to the finance source to obtain one. The FTC said it did, and the NADA sued.

After a U.S. District Court rejected the NADA’s position that the FTC’s interpretation of the rule was arbitrary, capricious, and exceeded the commission’s legal authority, the association appealed. It eventually dropped its suit two years later after it became apparent that, as the association explained in a statement at that time, “the court was not inclined to grant the relief NADA was seeking.”

The NADA also played a key role in making the government’s Car Allowance Rebate System, or Cash for Clunkers, dealer-friendly, continues to be the voice of the dealer in legislative battles related to fuel economy and vehicle recall proposals, and continues to tackle any and all challenges to the franchised dealer model.

Out of all that, the association’s shining moment — at least in my time with the magazine — is its work with regard to the Dodd-Frank Act and the Consumer Financial Protection Bureau. Because let me tell you, it would have been a different ballgame had it not been successful in getting most dealers excluded from Dodd-Frank.

As for that hot topic I mentioned earlier, I was referring to today’s digital push. Yes, I know we hit that subject pretty hard in 2016, but I believe we’re just in the beginning stages of this digital evolution, and the NADA agrees. How do I know, and how is this related to the association’s centennial? Well, it has to do with an announcement it issued in June 2016.

If you recall, the NADA announced the hiring of Peter L. Fong as senior vice president of dealership operations. In its press release, the association noted that one of the Fong’s key areas of interest was to help “accelerate the process of moving dealerships toward the online to in-store car-buying experience for consumers.”

I, of course, wanted to know what that line meant, and the association said an answer would be coming in the months ahead. Well, as you’ll read on Page 6, Scarpelli provided the answer. Yes, I waited seven months for it, but the NADA has always been thoughtful and calculated when it comes to controversial topics. And I guess that’s how 100-year-old organizations stand the test of time. Happy birthday, NADA!