As we have noted often, the Federal Trade Commission is the primary federal “cop on the beat” for motor vehicle dealers. The FTC can proceed in a variety of ways if it believes that dealers are undertaking activities it sees as improper. The most common method of challenging the conduct of an individual dealer or
Unintended Consequences of Prematurely Releasing Trades
If you read carefully a retail installment sales contract, you will see that your dealership is the creditor in the document. You assign the RISC to a finance source. Once assigned, the finance source is responsible for and services the account. Unfortunately, dealers too often unintentionally guarantee the customer’s debt or lock themselves into servicing
2018 Mid-Year Quiz Answers
There have been several deregulatory actions by the Trump administration, particularly to reduce the number of regulations affecting businesses and to rein in bureaucratic overreach on employment matters. However, deregulation is hardly the case for federal agencies that carry out Trump administration priorities or have legislative mandates. Here are examples that impact auto dealers. Immigration
2018 Mid Year Quiz
As if they were subject to the ancient curse, auto dealers live in exciting times. Whether it is the tumult in the federal government resulting from Trump administration policy revisions, franchisors taking advantage of good times to tighten their control, employee empowerment because of the publicized worker shortage, or the many changes affecting society generally,
New York Federal Judge Ruling Does Not Mean the End of the CFPB
There has been substantial publicity about a decision by a federal judge of the Southern District of New York that the structure of the Consumer Financial Protection Bureau violates the United States constitution. This is far from being the end of the CFPB, however. Recognize this decision was issued by a federal district court judge.
Mythbusters: FTC Used Car Rule
For more than a decade, the FTC considered revisions to the Used Car Rule. On November 18, 2016, it published the final revisions that went into effect on January 27, 2017. The revised rule provided for a new buyer’s guide that was optional for a year and mandatory effective January 27, 2018. We write frequently
DeFanging the CFPB
During the Obama administration, the CFPB spent considerable time, money, and effort to establish itself as a feared dismantler of traditional methods of doing business by important financial institutions. Despite the 2016 election results, Director Cordray proclaimed his defiance of the new President’s goals to end the culture of dismantling. When Director Cordray left the
Franchisors are Becoming More Aggressive; What About You?
New car dealers are increasingly restive about the aggressiveness of franchisors. Whether it is costly facility or image demands, increasing reliance on stair step incentives with easy disqualifiers, refusals to comply with state laws on retail reimbursement on labor and parts, frequent audits that violate state law, or chipping away dealer’s franchise rights, dealers are
Dealership Real Estate Lease
Include a Waiver of the Landlord’s Lien Common law gave a landlord a lien to sell abandoned personal property left on rented or leased premises by a former tenant to cover unpaid rent or damages to the property. Over the years, states have enacted statutes codifying the lien and including limitations. In Virginia, the statutes
New Information from the FTC on the Used Car Rule
In September, the FTC issued a set of questions and answers about the revised Used Car Rule. The Q&A highlights some issues that dealers should understand. OEM Warranty Disclosure Is your franchisor insisting that you disclose the terms of the OEM warranty on the buyers guide as if it is yours? The FTC now states