Best be certain your dealership complies absolutely with Consumer Financial Protection Board (CFPB) regulations, as any doubt to its constitutional authority was nixed by the U.S. Supreme Court a few days ago.
For dealers, the message is to continue sound consumer financing practices that might otherwise expose them to undue risk of CFPB violations.
With a 7 to 2 favorable vote, the Court made it clear it believes the CFPB is constitutionally funded, one of the arguments against the bureau that held up its momentum for some time. There is now no doubt this agency is not going anywhere and has now solidified its existence.
The issues
CFPB has made the sale of financial products a priority. The focal point is the difference between customer rate and the buy rate from the bank or disparate impact, meaning specific races or cultures are charged more for finance interest. Regulators look at the disclosures you provide at the time of sale and are very interested in the F&I products being sold.
Questions about the CFPB's legitimacy have challenged the regulation for years. The court's decision invalidated one: the agency "takes federal government money without an appropriations act." The CFPB was created under the DoddFrank Wall Street Reform and Consent Protection Act of 2010.
The CFPB will now be sufficiently funded, and the door is now open for it to create a more aggressive enforcement policy. For more insight into CFPB, contact us at [email protected]
Our counsel
Automotive and RV dealers are to continue sound consumer financing practices. The urgency to get practices aligned with the CFPB is now. Having your Safeguards/CARS Rule and other compliance processes audited and brought up to current standards would be advantageous. Such a physical audit is the best way to review these processes and practices to identify weaknesses that might expose them to undue risk.
The Automotive Risk Management Partners (ARMP) all-dealership physical audit compliance process is defined around the CFPB, which are not readily available in the market today.
Please note that ARMP created the CMS “Compliance Management System,” first prescribed by CFPB in 2010. Our team can help you implement necessary CFPB compliant practices in your auto and RV dealership and evaluate your cybersecurity measures.
Automotive Risk Management Partners, Inc. (ARMP) combines more than 40 years of automotive industry compliance experience. Founding partner Terry Dortch created the first GLBA auditing process for sales and finance centers within dealerships. The firm serves automotive and RV dealerships throughout North America. www.autorisknow.com. Contact Terry Dortch @ 815-670-4651 or [email protected]