Category: Compliance

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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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Compliance

DOD Decision Gives Powersports Dealers New Option for Military Buyers

Steve Roennau Vice President Compliance EFG Companies
Contributing Author:
Steve Roennau
Vice President
EFG Companies

Powersports products have long been popular among active military and their dependents who find owning a car to be problematic, given the cost and their transitory lifestyle while on duty. The affordability and easy financing of motorcycles have made dealers and lenders eager to support this demographic segment. However, some regulatory wrangling by the Department of Defense (DOD) regarding the Military Lending Act (MLA) had caused some confusion.

Let’s step back and start at the beginning. Congress passed the MLA in 2006 to protect active duty service members and their dependents from predatory lending. Since 2015, the DOD has amended portions of the final rule to expand the scope of the MLA to include the majority of closed and open-ended loans. These amendments impacted traditional lenders like banks, savings and loans, credit unions, and credit cards.

At the end of 2017, the DOD issued a new interpretation of the MLA. Based on the interpretation, creditors providing credit-related products and services, like GAP, credit life, credit disability or cash-out financing, were also required to comply with a full range of duties and restrictions imposed by the MLA.

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