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COMPLIANCE

More Regulations Means Less to Talk

about for BHPH Dealers

BY PETER SALINAS, GIADA INDUSTRY COMMUNICATIONS

One would be hard-pressed to find a more more attention to those dealers who have “Small operators take a look at the fines
regulated and closely scrutinized business complaints filed against them by consum- some of the large players and even small
person than the automotive retailer serving ers, and not so much because the dealer was dealers have had to pay and they get scared
the unbankable consumer who needs reli- quoted in an article about what they see as to death,” Shilson said. “Small dealers don’t
able personal transportation. unwarranted regulatory scrutiny. have the ability to put up $1 million to de-
fend themselves from a CFPB or FTC in-
In recent years the buy here-pay here in- While some have expressed optimism that vestigation.”
dustry has come under intense examina- the President Trump administration will
tion from the media, politicians, and var- adopt less stringent and “more common Shilson agrees with Petersen that regulato-
ious state and federal regulatory agencies. sense” attitudes to regulations overall, Pe- ry agencies aren’t going to stop doing their
BHPH dealerships range from large multi- tersen said he doesn’t expect the CFPB or jobs because a new president is in office.
state corporate chains selling thousands of any other regulatory agency to go away. He said rules in place need to be followed
vehicles a year, to small family operations rigorously, and that new rules will likely be
selling 20 units a month. These dealers not “There will always be a need for consumer forthcoming.
only deal with all the regulations facing an protection and, as a dealer association, we
automotive retailer, but also must endure are all for greater transparency in the sales Petersen said the NIADA has lobbied for
the extra regulations governing finance process,” Petersen said. “We are not op- having more bi-partisan oversight by Con-
companies, as well. posed, however, to taking a more common gress over the CFPB, including the passage
sense approach to consumer protection of the Financial Choice Act. This act would
CarHop, which operates 50 retail locations regulations that are more focused.” give Congress oversight of the director,
in 15 states, was fined $6.4 million in 2015 who is appointed to a term of 5 years, and
by the Consumer Finance Protection Bu- Chuck Bonanno, NIADA National Di- the bureau’s budget, which is funded out of
reau (CFPB). At the beginning of 2016, a rector of 20 Groups, said he has seen buy earnings by the Federal Reserve System.
small buy here-pay here single point store here-pay here dealers become less likely to
in northern Colorado was fined near- grant press interviews about their business “Even if the CFPB were to have a reduced
ly $800,000. Business practices including in recent years. presence, I think you would see the state’s
credit reporting, collections practices, ad- attorneys general step up to fill the void and
vertising, and disclosures were variously “These dealers simply ask themselves if the work harder on enforcement at the state lev-
involved in the investigations, rulings and attention will sell more cars,” Bonanno said. el,” Petersen said. n
subsequent restitution and civil fine pay- “The bottom line to regulatory scrutiny is
ments. whether or not your business practices are
compliant.”
Those who are hard-pressed to find a more
regulated industry, might find it just as dif- Compliance can be a moving target and
ficult to find buy here-pay here dealers who paying close attention to CFPB and FTC
would like to discuss their business, its reg- rule changes is vital, Bonanno noted. “If
ulation, and their plans for the future. you go beyond the regulatory demands
and disclose everything, you can still face
“I wouldn’t say these dealers are fearful of issues. Take good care of your customer.
talking to the media, even trade press, but Pay attention to online reputation manage-
with the investigation and fines levied on ment. Make repairs to keep your customer
the Colorado dealer last year, dealers are in the car when necessary.”
very conscientious about putting them-
selves out there,” said Shaun Petersen, NIA- Ken Shilson, president of the Nation-
DA senior vice president of legal and gov- al Alliance of Buy Here Pay Here
ernment affairs. Dealers, said he has seen dealers
become tightlipped, though he said
Petersen noted that regulators simply pay it sometimes depends on size.

28 | GIADA Independent Auto Dealer FEBRUARY 2017