Categories
Compliance

Compliance Still Matters

Powersports dealers have a myriad of challenges facing them today. Between sky-high interest rates and waning consumer demand, profit margins are beginning to feel the sting of a market that is on the precipice of right-sizing. With this mounting pressure, dealers are rightly concerned about how to maintain their profit margins in the weeks and months ahead. All too often, when the going gets tough, compliance falls to the wayside, and you may be asking yourself, “where is the CFPB anyway?”

The CFPB and FTC have not been making waves like they have in the past, but that does not mean they are not present. In fact, the CFPB has been busy this year bringing lawsuits against auto lenders and servicers. You may think that since these suits don’t affect you or your industry, you don’t need to worry.

If that is you, consider this. According to the National Council on Identity Theft Protection, there is an identity theft case every 22 seconds in the U.S. and 33 percent of all Americans have faced some kind of attempt in their lives, with experts predicting this number could increase significantly this year. So far this year, the Federal Trade Commission (FTC) has received 5.7 million total fraud and identity theft reports, 1.4 million of which were identity theft cases accounting for $10.2 billion in losses. This is a great example of why policies like the FTC Safeguards rule were put in place. Compliance procedures often serve as critical guard rails that can protect your customer’s data – and your dealership.

Categories
Uncategorized

Stay Flexible This Fall

Fall is in full swing and the powersports market should be experiencing its annual turnover of moving inventory out so that new units can be showcased on the sales floor. However, inventory challenges continue to plague 2021 sales, with many analysts forecasting continued issues into 2022. In a recent article in the Wall Street Journal, companies such as Polaris offer a glimpse into the numerous issues facing a powersports OEM, which has trickle-down impact on dealers and ultimately customers.

Flexibility should be the mantra this fall as supply chain issues continue to work their way through the industry. For example, Polaris is changing its manufacturing and sales strategies on the fly to cope with shortages of materials and parts. The company said it is juggling approximately 30 + supply-chain constraints for its units, sometimes changing its plans daily for what it produces.

This story has played out in the retail sales numbers across manufacturers. Coming off an historical 2020, the August major unit sales declined 1.4 percent overall in the US. This is not reflective of demand, which remains high. It speaks to inventory, or the lack thereof.  Where dealers are usually offering sales ‘blow-outs,’ many are now scrounging for units.

Categories
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?