Judging by the agendas of several industry events, it seems that many dealers sweat over compliance -- and for good reason. Industry groups, such as the National Automobile Dealers Association and American Financial Services Association, and consultants try to help, but at the end of the day, each dealership must decide how much effort it wants to put toward compliance.
NADA includes a dealer participation certification form in its Fair Credit Compliance Policy & Program, a tool for dealerships to document when they deviate from their store’s standard retail margin on auto loans they arrange.
But many dealerships don’t use the form, says David Missimer, legal counsel for Automotive Compliance Consultants of Crystal Lake, Ill.
If the F&I managers stray from their store’s standard retail margin, the form allows them to give a reason and to list the final interest rate agreed upon.
Missimer guessed that about 60 percent of dealerships on the East Coast use the form, but the majority of dealerships nationwide do not. Missimer hasn’t surveyed dealers. His observation is anecdotal.
NADA has not done a complete survey either, but spokesman Jared Allen said indicators have shown that at least a third of the franchised dealer body has adopted at least part of the policy and program.
Why don’t all dealers use the program and its form?
“That exception form is solely to benefit the dealer,” Missimer said. “It’s the best thing you can do to respond to any disparate impact claims” from lenders, if those lenders come under regulators’ scrutiny.
To some dealers, the dealer participation certification form could be another sheet of paper in a growing stack. But maybe this piece of paper is worth a few extra minutes.