This is the time of year that I usually get a number of calls from reporters doing those December or January “predict the future” articles, asking me what I think will happen next in the auto sales, finance, and lease legal arena. This year, I thought I’d beat them to the punch.

OK. I’ve taken the Windex to the old crystal ball, hoping to peer into the future and predict what the year 2012 will hold. Readers should be warned that I have a pretty crummy track record when it comes to this exercise, but, with that in mind, here goes, and in no particular order.

• The Consumer Financial Protection Bureau will be close to fully staffed and operational. The CFPB has hired everyone not currently employed by Burger King or Walmart, and they’re still hiring. I suspect they will be at nearly full complement by the end of 2012.

• The CFPB isn’t the only Washington agency with a “help wanted” sign on the front door. The Federal Trade Commission, which has lost several staffers to the CFPB, will be trying hard to hire replacements, but it won’t be able to do so quickly enough to be at full strength before at least mid-year. That might crimp some of the plans that it will develop after this year’s three Roundtable events.

• Even short-handed, the FTC will initiate the first enforcement actions based on what it heard at the Roundtables. After all, it can’t very well let the new upstart CFPB get all the limelight, can it now? Abusive spot delivery practices and payment packing will be the likely subjects.

• The Bureau won’t be a “bureau” anymore. It will morph, under pressure from Senate Republicans, into a 5-member commission, be moved to the Treasury Department, and have its funding approved like other federal agencies.

• Exercising new powers given to them by the Dodd-Frank Act, state attorneys general will bring their first actions to enforce federal laws. Look for those AGs who have been targeting dealer advertising practices to be among the first ones to deploy these new weapons.

• The CFPB will start its study of arbitration, as mandated by the Dodd-Frank Act. It will likely study the issue for quite some time, trying to give the appearance of an even-handed analysis, then declare pre-dispute mandatory arbitration as something not in consumers’ best interests, then propose a rule that would declare the practice “abusive” with respect to consumer contracts. Across the country, class action lawyers will celebrate by simultaneously tossing their tasseled loafers into the air.

• The Department of Justice will bring one or more actions alleging credit discrimination by dealers and sales finance companies. Based on a recent Supreme Court decision and a few lower court decisions, DOJ will face a harder time winning these than it would have a couple of years back.

• Companies that finance vehicles for servicemembers will come under intense scrutiny. Despite the military’s ability before Dodd-Frank to police the actions of car dealers and other merchants around bases, Congress expressly addressed the protection of servicemembers in the Dodd-Frank Act, and the CFPB, without having done any significant fact-finding on the nature and extent of abuses, appears to be making it clear that it thinks more enforcement and regulation is in order.

• Larger dealers will significantly ramp up their compliance efforts. The FTC will be on the prowl and will likely target some high-profile dealers in a number of markets. Other dealers will feel the heat. Compliance lawyers won’t go hungry.

• The added cost of compliance will begin to cause consolidation among smaller dealers or will simply drive them out of business. The compliance burden on dealers is already so great that they are all sending at least one kid to law school. Small dealers – who have to spread the big bucks they will need to spend on compliance across fewer vehicles sold – simply will not be able to compete with the big guys, who can spread similar costs over a much larger operation.

So, there are my 10 predictions for the automotive sales, finance, and leasing legal world for the upcoming 12 months. Maybe next year about this time we’ll revisit the list and see how I did. Or not.

If you’ve got any better predictions, write them on the back of a crisp $100 bill, and send them my way.


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