8/6/2019 Letter: Letter from Minority Members of Congress to President Obama Regarding Minority Automobile Dealers

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8/6/2019 Letter: Letter from Minority Members of Congress to President Obama Regarding Minority Automobile Dealers

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2. Modify AAA ReqBiremeqtor AutomoFile oans floornlannins)UnderTerm Asset-BackedSecurities endineF?cilifv(TALF).The mmediateestorationf accesso floorplan inancings essentialo restoringetailautosales.Thefinancial ssistancerogram nnouncedy theAdministrationn March3,2009, equires ach oan ohaveanAAA rating, ndexcludesloorplan inanceoans ll together.Franchisedutodealersely onwholesalefloorplan" inancingo buyvehiclesrom manufacturers.hisenablesealerso purchaseneedednventoryo provideheirconsumersithawidevarietyof purchaseptions.Liquidityconstraintselt by the auto ndustryasa wholehavehaltedany loorplanactivity by lenders.Even hemostcreditworthy ealers reunableo accessapitalwith reasonableerms. n cases here inancingsavailable,ealers reaskedo agreeo financingerms hatarenotcommensurateith the isk o theborrower.These eductionsn floorplaninesof creditand he ncreasedosts f floorplaninancing redramaticallyeducinghenumber f vehicleshata dealermaypurchaserom a manufacturer.We respectfully equest onsideration f the ollowingproposalsor thoseminority dealershatwereeither rejected r terminatedby GeneralMotorsor Chrysler:3. ConsiderRelievi4eDealers rgm PersonalGuarantqgsor bothTerm an4 Floor Plan LoansManydealershat ook ermor floorplanoansrom manufacturersreunableo repayhese normousdebts, speciallyn cases here manufacturers forcinga dealershipo closewithoutprovidingaircompensationi.e. nadequateind-down ayments). s a result f thestrictenforcementf thepersonalguarantees,ealers re osing heirhomes ndpersonalssets. ealers aveattempted,ithoutavail, oseek edresshroughhebankruptcyourts.Putsimply, t is nconsistentor the ederal overnmentorelieve hedebts f automanufacturersy providingaxpayer ollarswhileallowing hese amemanufacturers'aptivenstitutionso demandhatmoney heyhave oanedo dealers ustbepromptlyrepaid.4. Future Dearership pnortuniliestor Terminated/Reiecled ealersIn mostcases,h,e losing f dealershipss duenot o dealers' oormanagementut o their ackof accessto workingcapital nd o automanufacturersownsizingheirdealer ody. Dealers,specially inority-owned ealerships,ant o bepartof thenational conomicecovery nd o supportheir ocaleconomies.We ask hatconsiderationegiven o theaffected ealers f bothGeneralMotorsandChrysler f anduzhenhese utomanufacturersecide o re-enterhe marketplace.We maginehat, nmost nstances,dealerhatwas orcedo closewouldbe hebest andidateo re-establishdealershipshouldan automanufacturerecideo return o theaffectedmarketareabecausehatdealerwould bringexperiencendexpertise.We suggesthata "firstrightof refusal" econsideredsa meanso ensurethataffected ealers regiveneveryopportunityo re-establishheirdealershipshould cbnomic ' r 'conditionsmprove.5. TARP FundAllocation o Mingrity DealqrDevelopment rosramsMinority-owne:dealershipsant o bepartof theecon,,'micecovery ndwill expand n heirsuccessfulbusiness odelsf given heopportunityo do so. We requesthatyouconsider llocating portion fTARP unds o support he minoritydealer evelopmentrogramsor bothGM andChryslerwhich areneededo maintain ndgrow henumber f minority-ownedealerships.hese ealershipsaybenewto aparticularmarket, ut heyhavebeen ery successfuln buildingworking elationships,ithinourcommunities. heuseof TARP undso supportminoritydealer evelopmentrograms ouldhelpaddresshealarmingise n dealer onsolidation,hichhasbeen isastrousor minoritydealers. s oftheendof 2008,a otalof 1,200minoritydealershipsadbeen onsolidated,educinghenumber fminoritydealershipso numbers otseen ince he ate 1980's ndearly1990's.As thedemographicsfAmerica ontinqeo change ndminoritypopulationsxponentiallyrow,America's utomobiledealershipodyshould eflect hedemographic ake-uipf our nation.

8/6/2019 Letter: Letter from Minority Members of Congress to President Obama Regarding Minority Automobile Dealers

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Urgentattentiono this ssue s necessaryo prevent undreds f minority autodealersrom goingout ofbusiness,isrupting ur communitiesnd eaving housandsnemployed. heauto ndustrys composedof several ieces.Minority-owned utodealers rea vital pieceof thepuzzleand,more mportanfly,orour communities.As theprimaryautomotiveetailersn minority communities, inority dealers layacritical ole n providing mploymentndsupportingeycommunity rganizations. oreover,hesedealers erve safoundation f the ocal ax basewhich, f lost,wouldnegativelympact urcommunities.We respectfullyequestourconsiderationf theproposalsresentedbove,Theauto ndustry eedsurgent ttention, ut hatattentionmust nclude specialocuson minority-ownedealers, ho areessentialconomic omponentsf our communities.We enthusiasticallyeeko work withyou n thecreation f fai r andviableopportunitieso assistminorityautodealers nd o provide direct oan und osupply hemwithworkingcapital nd loorplan inancing.Sincerely,

'n .41) // /\. . , / - 42 t - ' f l l-az"-o(%J9YBACA CORRTNE ROWNMemberof Congress Member f CongressPEDROPIERLUISIMember f Congress Member f Congress

"0\2l*ffiEL WATTMember f Congress GRIJALVANAPOLITANO BEN RAY LUMemberof Congress

8/6/2019 Letter: Letter from Minority Members of Congress to President Obama Regarding Minority Automobile Dealers

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MIKE HONDA

Memberof Congress