As the automotive industry continues to adjust to the “new normal” spurred by the pandemic and the technology improvements that have helped keep business moving, here are some aspects of deal compliance that dealerships should know to help keep themselves compliant.
Expect Increased CFPB Enforcement Activity
In 2021, we can expect continued scrutiny and “regulation by enforcement” from the Consumer Financial Protection Bureau (CFPB). Also, the Supreme Court’s ruling in Seila Law LLC v. CFPB that the CFPB structure is unconstitutional could affect the bureau’s enforcement priorities related to the consumer auto lending industry.
With the new administration and a change in leadership structure, we could see more aggressive enforcement actions in the coming year. To get an idea of the regulatory matters the Consumer Financial Protection Bureau (CFPB) anticipated having under consideration through November of this year, check out their Fall 2020 rulemaking agenda.
If you have questions about your dealership’s responsibilities during the pandemic, the CFPB has been addressing many of them in their FAQs.
Know Your Online and In-Person Customer
Even as we approach normalcy, expect the higher reliance on online transactions to continue and adjust your compliance approach accordingly.
The 2020 Cox Automotive Digitization of End-to-End Retailing study found that 76% of car shoppers are now open to the idea of buying completely online. Unfortunately, criminals and scammers are actively looking for ways to exploit remote and virtual sales processes to commit fraud.
Identity verification is more important than ever, especially with synthetic identity fraud on the rise. Make sure to run OFAC and Red Flag checks on everyone and use out-of-wallet questions as needed to be sure of a customer’s identity. Takes steps to re-verify identity throughout the deal process whenever necessary.
Consult the 2024 Dealertrack Compliance Guide
We’ve updated our online compliance guide so you can have instant access to the most up-to-date regulations, fines, tips and best practices, anywhere, anytime. Sign up today to download compliance information, insights and best practices to have at your fingertips all year long.