The Federal Trade Commission has held a series of round table style meetings to gather information on possible consumer protection issues concerning the sale, lease, or financing of automotive vehicles. This, in addition to other recent moves by the FTC and CFPB, really requires our retailers to take a closer look at compliance and what it takes to comply.
The good news is many of these retailers now have an in-house Compliance Officer who has a working understanding of how to comply with the Dodd-Frank Act, Red Flag Rule, the Risk-Based Pricing Rule, and OFAC. These same retailers have a real compliance solution that provides an F&I process that includes; credit reports, credit application submission, menu presentations, and document storage. Included in these solution packages is a series of in-house training on various compliance subjects which all employees are required to take.
At first it was not easy for these retailers to stay on top of the important changes in the regulatory arena. It was challenging to gather, filter, and interpret the ever-increasing material of regulatory information. Once they gathered this information, the retailer had to analyze it and share the information with their management team as well as their employees. Even after this was done, the question was ‘does this information apply to their company and their situation?
While many of these retailers pushed forward, some essentially started to ignore the compliance requirement and tried to fly under the radar. Subjects such as the Privacy Notice, Safeguarding Policies, OFAC, Red Flag Rule, Risk Based Pricing Rule, and Adverse Action Notices became something the F&I department handled behind the door of the finance department.
In the end, it is amazing that so many Owners and General Managers are prepared to risk their careers, families, and the entire organization to unfairly hand this off to the Finance department. It is also unrealistic to expect the F&I Manager to be the sole expert of what it takes to keep the organization compliant.