Posted 8/13/2009
By Clarence Mills

Dealer Act Takes First Step in Congress

Language from the Automobile Dealer Economic Rights Protection Act of 2009 has been added to the U.S. House of Representatives Financial Services Fiscal Year 2010 Appropriations bill.

House Bill 2743, which is aimed at restoring the economic rights of automotive dealers, had been referred to the House Committee on Financial Services. The legislation will restore the franchise rights of General Motors Corp. and Chrysler LLC automobile dealerships.

The legislation prohibits an automobile manufacturer in which the federal government has an ownership interest, or which receives loans from the federal government, from depriving an automobile dealership of its economic rights. It requires the manufacturer to honor those rights as they existed for Chrysler and GM dealers prior to the commencement of the bankruptcy cases of each corporation, including dealer rights to recourse under state law.

Finally, the language requires the appropriate manufacturer to restore the franchise agreement between the dealers and Chrysler or GM that was in effect prior to the commencement of their respective bankruptcy cases, and to take assignment of such agreements.

Obama Administration Releases Details on Establishing Consumer Financial Protection Agency

The Obama administration announced in June details for the establishment of the Consumer Financial Protection Agency in Washington, D.C. The new agency was first proposed in the administration's release of its "Financial Regulatory Reform: A New Foundation" document. The U.S. House Financial Services Committee has already held a hearing on the scope of such an agency.

The proposed text did not include that the agency would regulate property and casualty insurance. The House Financial Services Committee was expected to begin the markup of legislation for the new agency prior to the August congressional recess. The Automotive Service Association's (ASA) collision leadership was on Capitol Hill July 28-29 to discuss insurance reforms being considered by the U.S. Congress.

To view President Obama's Consumer Financial Protection Agency Act of 2009 proposal, visit ASA's legislative Web site at www.TakingTheHill.com.

Representative Introduces Access to Repair Parts Act

Rep. Zoe Lofgren, D-Calif., has introduced House Bill 3059, the Access to Repair Parts Act, which exempts replacement parts that restore an article's original appearance from U.S. patent laws. Senate Bill 1368, which is sponsored by Sen. Sheldon Whitehouse, D-R.I., is the companion legislation.

The bill's language states "it shall not be an act of infringement of any design patent to make, use, offer to sell, or sell within the U.S. or import into the U.S. any article of manufacture that itself constitutes a component part of another vehicle of manufacture, if the sole purpose of the component part is for the repair of the article which it is a part so as to restore its original appearance."

Task Force Point Man Steps Down

Steven Rattner, the point man on negotiations with General Motors and Chrysler LLC during their bailouts and bankruptcies, has stepped down from the Obama Administration's Auto Task Force and will be replaced by Ron Bloom, a longtime steelworkers' union official.

Rattner announced that his departure from the task force is due to the emergence of both GM and Chrysler from bankruptcy. He plans to return to the private sector.