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.
Chopra takes over from previous CFPB director Kathy Kraninger, who stepped down after President Biden was confirmed. Under her direction, the agency took a largely hands-off approach to the retail automotive industry. We can all expect that to change.
Chopra stepping up compliance
The near-term good news for dealer management is your current compliance practices and protocols should keep you on the right side of regulation. However, ongoing training can not only provide a good refresher for your team, but it is also an opportunity to confirm that your processes and procedures are still compliant. Chances are, there are some updated rules and regulations at either the local, state or even federal level which may impact your processes.
For example, does that new advertising campaign meet the Equal Credit Opportunity Act of 1974 Regulation B, Truth in Lending Act and Regulation Z? Is your team retaining records of disclosures for two years? As consumers suffer job loss or breaks in job history, is the F&I team using the Fair Credit Reporting Act, the Red Flags Rule and Risk-Based Pricing Rule correctly?
While industry analysts such as Cox Automotive confirm that online sales will remain a fixture in retail automotive, the tools required to effectively and securely complete a sale online are still largely being developed. EFG’s team of AFIP-certified F&I trainers and account managers can provide critical guidance, through in-person and online training, deal audits, F&I process reviews, and with AFIP certification courses for your team.
A compliance refresher can also be timely as the consumer engagement model continues to change. Thanks to the pandemic, your sales team is likely working with potential customers online, via text and by phone versus sitting at the dealership. Are they in compliance with the CAN-SPAM Act? Be sure your team is following best practices when contacting potential customers and capturing the right information – correctly and compliantly – whether virtually or in person. Given the higher percentage of remote or digital sales, make sure your team does not fall victim to discriminatory practices.
The team at EFG Companies brings a wealth of strategic business acumen and tools to drive value for our dealer clients. We’re not just your F&I provider – we are your business partner. Contact us today to learn more about our profitable solutions for your business.