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Independent Dealer Compliance Overview & Best Practices. Using Compliance to your advantage in F&I.

Compliance has become a way of life in the F&I office. Embrace compliance and use it to your advantage and success is on the way. Ignore compliance and run the risk of fines or worse. In Independent Dealer Compliance Overview & Dealership Best Practices you will understand the rules & laws the directly affect the F&I office and we will share dealership best practices. Target Audience: F&I Manager & F&I Directors.

Important Rules and Regulations for Your Dealership

Gramm-Leach-Bliley Act

GRAMM-LEACH-BLILEY ACT This Act comes into play when you’re at the point of success; you’ve closed a sale and are offering financing to your customers! The Act was set up to protect the privacy of consumer information, and sets the standards for privacy notices, opt-out notices, and how nonpublic personal information can be used or disclosed. The more successful your dealership is, the more you’ll have to know here. Some useful information:

Disposal Rule

DISPOSAL RULE It’s not often the government asks businesses to “burn, pulverize, or shred” something, but in this case, your customers’ sensitive information derived from consumer reports must be securely destroyed. Check out other colorful information here:

Magnuson – Moss Warranty Act

MAGNUSON-MOSS WARRANTY ACT Again, this Act hits you right at the moment of success! It requires dealerships to provide clear warranty instructions and be extremely clear about the integrity of your vehicles and about your commitment to correct problems when your vehicle fails in any way. Both for express and implied or “as is” warranties. A little dryer than the Disposal Rule, the Warranty Act details are here:

Used-Car Rule

USED-CAR RULE Are your Buyer’s Guides up to snuff? Do they have the proper additional disclosures? Are they language-specific to your sales process? Grab more information here:

Regulation Z

REGULATION Z In addition to Regulation M, Regulation Z requires you to ensure that credit terms are disclosed so consumers can compare credit terms more easily and more knowledgeably. Plain language. Specific language. We’re pretty sure you’ve got this covered, but if there’s any question, you may be exposed. Read more here:

Equal Credit Opportunity Act

EQUAL CREDIT OPPORTUNITY ACT This regulation prohibits practices that discriminate and was enacted to promote the availability of credit to all credit-worthy applicants without regard to race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract). Pretty sure your team is all over it. If not, check out how the FTC describes consumers’ rights when buying a car:

Fair Credit Reporting Act

FAIR CREDIT REPORTING ACT This Act covers privacy and security around the ways your dealership protects information from – and reports information back – to Consumer Reporting Agencies. The intricacies of FCRA also cover how you handle employee background checks. Protect your dealership and customers by exploring more here:

Adverse Action Notices

ADVERSE ACTION NOTICES The Equal Credit Opportunity Act (ECOA) has restrictions around exactly how you report refusing credit or granting (and having people accept) credit in “a different amount or on other terms.” Within 30 days of any “Adverse Action,” you are required to notify your consumer, using very explicit terms, in writing. Get more information here:

Credit Practices Rule

CREDIT PRACTICES RULE Do your contracts have unfair contract provisions? Do you know what’s considered “unfair?” Do your co-signers clearly understand their liabilities? You’re responsible for making sure they do. And are you absolutely clear when your dealership can and when you can’t charge late fees? The Credit Practices Rule spells out your responsibilities – in detail as only the FTC can. Learn more here:

Federal Advertising Laws/Truth-in-Advertising

FEDERAL ADVERTISING LAWS/TRUTH IN-ADVERTISING Advertising must be non-deceptive and truthful. And any mention of financing or terms must trigger certain disclosure statements. Advertisers must have evidence to back up any claim. The burden of proof for advertising claims is on the dealer. And advertising cannot be “unfair.” Unfair advertising is described as that which would “…substantially injure customers, violate established public policy, be unethical or unscrupulous.” Protect your dealership from unscrupulous marketing mistakes here:

Red Flags Rule

RED FLAGS RULE Your dealership must have an identity theft program in place, as a creditor. Your dealership must implement a written identity theft prevention program designed to detect the “red flags” of identity theft in your day-to-day operations, take steps to prevent the crime, and mitigate its damage. Want to better understand how to comply? Learn more here: – how

Form 8300 and Reporting Cash Payments of Over $10,000

FORM 8300 AND REPORTING CASH PAYMENTS OF OVER $10,000 In order to protect your dealership from accusations of “money laundering” by the IRS, anyone taking a cash payment of $10,000 or more is required to file a Form 8300. Every time. And you must file Form 8300 by the 15th day after the cash payment occurs. Every time. Protect yourselves from IRS scrutiny here:

Office of Foreign Assets Control (OFAC)

OFFICE OF FOREIGN ASSETS CONTROL (OFAC) And, in support of freezing terrorists’ assets, you are required to check your customers’ names against the Specially Designated Nationals List (SDN List). The SDN List is comprised of “individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific.” Learn more here:

ADA Compliance

ADA compliance refers to the Americans with Disabilities Act Standards for Accessible Design, which states that all electronic and information technology (like websites) must be accessible to people with disabilities. It is not the same as 508 compliance. Test your website for compliance.

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