Tag: Toyota Motor Credit

Compliance has been a hot topic going on three years in the auto finance space. Lenders, such as Ally Financial, Toyota Motor Credit, and the American Honda Finance Corporation, have reached resolutions with the CFPB based upon dealership practices. We’ve all known that the CFPB has been trying to regulate dealerships through lenders. With this heightened sensitivity to compliance, other regulatory bodies that have jurisdiction over automotive dealerships, such as the FTC, are now turning their gaze to dealership practices.

While everyone is frustrated with the ambiguity of the CFPB, there are some well-defined actions dealerships can take to ensure compliance with entities like the FTC. With this in mind, now is the time for dealers to brush up on their F&I practices to ensure compliance, starting with this simple question: When a dealership sells a car and secures financing, who is the creditor at the time of sale?

If you said the dealer is the creditor, you would be correct. However, many F&I managers often think that the lender is the creditor. This mindset opens the door for non-compliant behavior as the F&I manager could think that their actions have fewer repercussions. As a dealer who knows about the legal repercussions, wouldn’t you rather have an informed staff that takes accountability for their actions?