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Compliance

Take Action Now!

The retail automotive industry is buzzing about the Federal Trade Commission’s recent proposed changes to regulations impacting federal advertising laws and prohibitions on unfair and deceptive dealership practices. The 37-page document outlines six key areas the agency would like to address:

  • Full up-front pricing, costs and finance disclosures
  • Sales process disclosures
  • Add-on product benefits
  • Bait & switch
  • Surprise junk fees
  • Record retention

The public commentary period closes on September 12, at which time the agency will evaluate the responses and make a final ruling. Industry associations – including NADA – requested an extension to the 60-day review period proposal, which the FTC declined.

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EFG Companies

What a New CFPB Director Means for Auto Dealers

On September 30, the U.S. Senate confirmed a new Director of the Consumer Financial Protection Bureau (CFPB). Rohit Chopra, formerly with the Federal Trade Commission, brings an enforcement mindset to his new role.

Chopra, 39, will serve a five-year term at the helm of the Bureau. He has a long history with the organization, which was created in the aftermath of the financial crisis of 2007 to 2008. He worked closely with Senator Elizabeth Warren on establishing the Bureau, then joined it in 2011 to investigate industry abuses in the student lending market.

His appointment comes at an interesting time for automotive dealers and lenders. As FTC Commissioner, Chopra actively pursued auto dealers perceived of implementing discriminatory practices. He also was a vocal proponent for more protections for consumers, specifically regarding auto lending abuses of all minority demographics and military families.

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Industry Trends Training

Compliance Training Counts

We are nearing the end of the first full month with the new Administration and there has been a lot of activity from Washington. Vaccine distribution is rolling out, COVID-19 cases are trending down across much of the country, and Congress has a stimulus package to address. All of these actions bode well for the retail automotive industry, which is eager to ramp up sales.

There have been some notable actions around compliance. Former Federal Trade Commission (FTC) member Rohit Chopra has been nominated to head the Consumer Financial Protection Bureau (CFPB). During his tenure with the FTC, Chopra was active in pursuing abusive and discriminatory lending practices. Specifically, Chopra has signaled interest in establishing more protections against auto lending abuses, specifically for members of the military, Black and Hispanic consumers. If confirmed, Chopra would replace current CFPB head Kathy Kraninger.

And, while recent efforts on the virus front look positive, consumers have become accustomed to shopping online and this trend is likely to continue. Dealers who have successfully pivoted to a more digital sales model are expected to continue to see success. But an increased focus on compliance from federal, state, and local entities calls for a solid compliance training refresher for dealer sales and F&I staff.