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COMPLIANCE TIPS

The CARLAWYER ©

We wish you and your families a healthy
and prosperous New Year.

Here’s our first 2017 report of legal de- BY THOMAS B. HUDSON AND NICOLE FRUSH MUNRO
velopments in the auto sales, finance and
lease world. This month, we feature de- Look both ways for compliance! Dealers al- final rules, and publications for the period
velopments from the Consumer Finan- ways need to worry about compliance with of April 1 through September 30, 2016. The
cial Protection Bureau and the Federal state and federal laws as they enter into re- Bureau also released its Fall 2016 rulemak-
Trade Commission, as well as our “Case tail installment sales agreements and leases ing agenda detailing its current and up-
of the Month.” Remember – we aren’t re- with their customers. But there’s another coming initiatives.
porting every recent legal development, area of compliance that is sometimes over-
only those we think might be particular- looked. Dealers selling those RISCs and FTC Strikes on CPO Inspection Claims.
ly important or interesting. leases to finance sources do so on terms and On December 16, the FTC announced that
conditions set forth in a document usually CarMax, Inc., Asbury Automotive Group,
Why do we include items from other called a dealer agreement, and most dealers Inc., and West-Herr Automotive Group,
states? We want to show you new legal have such dealer agreements with several Inc. settled allegations that the dealerships
developments and trends. Also, another finance sources. Failure to comply with a touted their rigorous used car inspections,
state’s laws might be a lot like your state’s dealer agreement can have very severe con- but failed to adequately disclose that some
laws. If attorneys general or plaintiffs’ sequences – your dealership may have to of the cars were subject to unrepaired safety
lawyers are pursuing particular types of repurchase all noncomplying contracts, for recalls. The proposed consent orders pro-
claims in other states, those claims might example. If you have not had a legal review hibit the dealerships from claiming their
soon appear in your state. of your dealer agreements, coupled with an used vehicles are safe, have been repaired
audit of how well your dealership is com- for safety issues, or have been subject to
Note that this column does not offer legal plying with them, make that a priority for safety-related inspections, unless the vehi-
advice. Always check with your own law- 2017. cles are free of open recalls or the compa-
yer to learn how what we report might nies clearly and conspicuously disclose that
apply to you, or if you have questions. Federal Developments the vehicles may be subject to unrepaired
recalls for safety issues and explain how
CFPB Announces Data Gathering Pro- consumers can determine whether a ve-
Thomas B. Hudson
Partner, Hudson gram. On December 15, the CFPB re- hicle is subject to a recall for a safety issue
Cook, LLC leased a web-based tool - Consumer Credit that has not been repaired. In addition, fol-
thudson@hudco.com Trends - to help track developments in con- lowing a public comment period, the FTC
sumer lending and forecast potential future approved final consent orders in similar
risks. The “Consumer Credit Trends” tool cases against General Motors Company,
tracks originations for mortgages, credit Jim Koons Management Company, and
cards, auto financing, and student loans. Lithia Motors, Inc. that were settled earlier
The CFPB plans to include other consumer this year.
credit products and information on credit
Nicole Frush applications, delinquency rates, and con- CFPB Releases Complaint Report. On De-
Munro sumer debt levels. The tool also charts lend- cember 27, the CFPB released its monthly
Partner, Hudson ing to specific groups of consumers. The complaint report, highlighting trends in the
Cook, LLC CFPB will update this information regular- complaint data the CFPB receives through
nmunro@hudco.com ly and will offer analyses on notable find- its Consumer Complaint Database. The re-
ings as warranted. According to the CFPB’s port includes complaint data by company,
news release, the information in the Con- overall complaint volume and complaint
sumer Credit Trends tool reflects changes volume by state, and other trends in the
in lenders’ and consumers’ behavior and data. Each month, the report spotlights
will be a starting point for deeper analysis complaints about a particular issue and
by the CFPB and others. complaints from a particular geographic
location. The December 2016 report focus-
What’s the CFPB Up To? On December es on complaints related to debt collection
16, the CFPB released its semi-annual re- and highlights complaints from consumers
port to Congress. The report provides an residing in Arizona. Buy-here, pay-here
update on the CFPB’s supervisory activ- dealers need to pay attention to the CFPB’s
ities, enforcement actions, proposed and actions on debt collection.

48 | GIADA Independent Auto Dealer FEBRUARY 2017