Category: Compliance

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Compliance

Yes – Regulatory Compliance Matters

The powersports industry has been on a profitable roll for several quarters with the majority of dealers exceeding sales expectations. Low interest rates and a recovering economy bode well for strong revenue for the remainder of the year.

While revenues look strong, regulatory oversight is also building momentum. New leadership within the CFPB has signaled through their rulemaking agenda that automotive lending practices will garner increased scrutiny. New legislative bodies within state and local governments in many areas have followed suite to respond to discriminatory lending practices and perceived predatory consumer behavior.

Now, you may be thinking that you are insulated. After all, the CFPB has jurisdiction over lenders and Buy Here Pay Here Dealers, not you. It’s important to remember that under the Consumer Protection Act, state attorneys general can levy fines against retail auto and powersports dealers under the Federal Trade Commission. This means that your powersports dealership is just as likely to be hit with large fines as the auto dealership down the street. So, what can you do to protect your business?

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Compliance Dealership Training

Compliance Training in 2021

We are nearing the first full month with the new Administration and there has been lots of activity from the White House. 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 powersports industry 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.

As we can expect a renewed and revitalized federal compliance program, there is no better than now for a solid compliance training refresher for your sales and F&I staff.

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Compliance Powersports Market

Don’t Skip Steps

While the country is still in the grips of the pandemic, sales of powersports vehicles, led by ATVs and other recreational units, have been going gangbusters. In May, the average major unit sales were up 60.7 percent and overall revenue increased 51.2 percent.

Going into the third quarter, inventory constraints could put a significant damper on sales gains. Polaris and other companies were forced to close manufacturing facilities due to COVID-19 outbreaks. Analysts from BMO Capital Markets report that inventory shortages across all brands could impact sales for the remainder of the year. However, with more consumers entering the market, and more units being financed, the overall forecast for sales remains cautiously optimistic.

With many powersports dealers surpassing sales records throughout the summer, one could surmise it is Christmas in July, except for one small data point. Identity fraud has reared its ugly head. While fraud has always been an area of focus in the powersports world, a couple of unique pandemic situations have exacerbated the situation.

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