Dodd-Frank Act Now Law!

The Dodd-Frank Wall Street Reform and Consumer Protection Act is now law. While it's not yet clear what specific effects it will have on the industry, there are some things you need to know now so lenders, vendors and dealers can continue proper compliance efforts.

Effects

State attorneys general can now enforce federal consumer protection laws. This heightened scrutiny makes it is more important than ever to ensure that you continue to operate in full compliance with state and federal consumer-protection laws.

The Bureau of Consumer Financial Protection (CFPB) will have broad powers to enforce consumer protection laws, including the ability to write regulations and respond to anti-consumer behaviors whether or not they were previously addressed as illegal activities.

While it is not yet clear exactly how, both lending institutions and in-store F&I practices will be effected in one way or another. Lenders will be under the direct scrutiny of the CFPB. While dealers are still overseen by the Federal Trade Commission and the Federal Reserve Board, requests from the CFPB to take action against an offending dealer are unlikely to fall on deaf ears.

Now is a bad time for a highly publicized scandal.

AFIP Response

Short-Term Solution

Because AFIP Certification can help prevent illegal or unethical behaviors that might draw the attention of the CFPB, FTC, FRB or state attorneys general, interest in the program has spiked.

Contact AFIP about launching certification campaigns for your dealer clients. If you don’t, one or more of your competitors will. Please don’t let yourself or your dealers get caught short. Dealerships can also contact AFIP directly to find out which lenders and vendors already servicing their stores provide AFIP Certification.

AFIP will conduct a free invitation-only webinar for its Industry Members to discuss the immediate and long-term effects of the Act. The information provided will be reviewed by Hudson Cook and reflect NADA’s official stance. The session will provide tips on conducting certification initiatives.

Invitations will be sent when the date and time of the session has been established. It is anticipated that the webinar will be held before the end of September.

Long-Term Solution

It could be between six and eighteen months before any information about how the Act will affect the F&I process is available. AFIP will continue to investigate the issue.

AFIP will team with Automotive News to conduct an in-depth webinar on the procedural changes required by the CFPB and state AG enforcement. An attorney from Hudson Cook will be invited to address legal concerns.

AFIP will add a new section to the AFIP Certification Courses to address the Act. It will be available online to anyone who is already AFIP Certified and to those currently studying to become AFIP Certified as soon as enough information is available. (Details will be announced in AFIP’s DirectContact eNewsletter).