Regulatory News & Updates
SBA Moves to Include Floorplan Loans in 7(a) Program
After expanding eligibility for its 7(a) loan guarantee program in early May, the Small Business Administration on May 28 announced it’s launching a pilot program that will — for the first time — provide eligible dealers with government-backed lines of credit to finance their vehicle inventory.
NADA praised the SBA for its efforts to expand its 7(a) loan guarantee program to include wholesale inventory, also known as floorplan loans, as many auto dealers are struggling to survive without access to credit. With the announcement, SBA has set aside an outdated prohibition on the use of 7(a) loan guarantees for floorplan financing.
The pilot program begins July 1, 2009, and runs through September 30, 2010. At that time, SBA will consider extending it. The pilot program will provide a guarantee of up to 75 percent for as much as a $2 million loan for floorplan financing. Many smaller dealers are expected to work with lenders to take advantage of this for their new- and used-vehicle inventory.
NADA continues to work with the Treasury, the Federal Reserve Board and the New York Fed to ensure that TALF funds may be extended to investors who wish to purchase floorplan asset-backed securities.
For more information, click here. And for questions, call Regulatory Affairs at 703.821.7040 or e-mail RegulatoryAffairs@nada.org.
LIFO Fact Sheet Available
The loss of LIFO (Last In First Out) for valuing inventory, either because of federal legislation or dealership termination, makes it imperative that dealers stay informed about potential changes and to plan ahead. A LIFO fact sheet is now available here.
WARN Act Requires Advance Notice of Layoffs
The Worker Adjustment and Retraining Notification (WARN) Act generally requires dealers with 100-plus employees to provide 60 days’ notice in advance of a mass layoff or closing. For more information, click here.
FTC Delays Red Flags Rule Enforcement until August 1
On the eve of the new May 1, 2009, deadline, the Federal Trade Commission (FTC)announced that it will delay enforcement of the Red Flags Rule until Aug. 1, 2009, to give financial institutions and creditors more time to develop and implement written Identity Theft Prevention Programs (ITPP). The FTC had previously extended the compliance deadline from Nov. 1, 2008, to May 1, 2009.
This delay applies to all entities subject to the enforcement authority of the FTC, including all automobile dealers. The FTC also announced that it would "soon release a template to help" certain entities comply with the Red Flags Rule. Please note that this deadline revision does not affect the deadline for compliance with the Address Discrepancy Rule, which was Nov. 1, 2008.
All NADA members have received a copy of A Dealer Guide To The Red Flags and Address Discrepancy Rules; Protecting Against Identity Theft. It includes an ITPP template. The template as well as worksheets are also available electronically at no charge to NADA members. These include risk assessments, sample clauses for service provider agreements, and a sample compliance report. To obtain these, e-mail NADA Management Education at me@nada.org. Use the subject line “ITPP Template,” and include your name, title, dealership address, and NADA member ID number. In addition, NADA also has produced several virtual seminars on the topic, including Complying With the New FTC Red Flags Rule and, with the FTC, A Deeper Dive into the FTC Red Flags Rule.
For more information, visit the FTC site at: http://www2.ftc.gov/opa/2009/04/redflagsrule.shtm and http://ftc.gov/os/2008/10/081022idtheftredflags
rule.pdf. And watch the NADA video, “Identity Theft,” here.
Stimulus Legislation Mandates Temporary COBRA Premium Relief
The American Recovery and Reinvestment Act of 2009 (ARRA) provides temporary, taxpayer-funded, premium relief for people otherwise eligible to elect to continue an employer's health plan coverage under the Consolidated Budget Reconciliation Act of 1985 — known as COBRA.
The Department of Labor (DOL) has issued model notices for employers to provide to Assistance Eligible Individuals (AEIs) and they may be obtained here.
For more information, click here.
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About NADA Regulatory Affairs
NADA’s Regulatory Affairs Group protects and promotes franchised car and truck dealership interests before the federal administrative agencies. Each year, Regulatory Affairs monitors and analyzes hundreds of federal regulatory issues and proposals, evaluating them for potential dealership impacts. Regulatory Affairs also helps to formulate NADA policy positions on those issues and, through written comments, testimony and, if necessary, legal action, advocates dealership interests before the federal agencies and judiciary.
The Regulatory Affairs Group coordinates its activities with NADA's Legislative Office on subjects of common concern, works closely with state and metro dealer associations, and regularly engages with other industry trade associations. Regulatory Affairs also prepares compliance-oriented guides, bulletins and articles and directly provides compliance advice to dealerships. For assistance, please call (703) 821-7040, fax (703) 448-5824 or email: regulatoryaffairs@nada.org.
Regulatory Guides and Bulletins
• Federal Stimulus Law Tax Provisions (February 2009)
• A Dealer Guide to the FTC Red Flags and Address Discrepancy Rules: Protecting Against Identity Theft (July 2008)
• The Federal Hazmat Transportation Regulations (May 2008)
• IRS Cost Segregation Audit Technique Guide (March 2008)
• A Dealer Guide to Adverse Action Notices (May 2007)
NADA Reference Materials
NADA & ATD Regulatory Compliance Chart (2nd Edition, 44 pp., available in both a print edition and as a downloadable PDF file)
Car and truck dealers need to know how federal rules and regulations apply to them. The NADA & ATD Regulatory Compliance Chart provides:
- An overview, with checklist, of federal rules that apply to car and truck dealerships, organized alphabetically by regulatory agency.
- A short summary of each rule.
- Sources for further compliance-oriented information for car and truck
dealerships that are available from NADA and various government
agencies.
To order, click here.
The Regulatory Maze: NADA's Annual Update on Federal Regulations (February 2009, 480KB PDF)
This annual AutoExec magazine article lists federal rules that apply to car and truck dealerships, organized by dealership department. To download, click here.
Regulatory Review
NADA's Regulatory Review tracks laws and regulations that affect dealers. It is mailed quarterly to state and metro dealer association executives and the NADA board of directors. Regulatory Review is produced by NADA Public Affairs in cooperation with NADA's Legal and Regulatory Affairs department.
Current and back issues (PDF format) may be accessed here.
Federal Agency Publications
The following are links to recent federal agency publications impacting NADA members, listed from newest to oldest:
Energy Stewardship Initiative
The partnership between NADA and EPA's ENERGY STAR program encourages greater energy efficiency at dealership facilities and operations. More information is available at www.nada.org/energystar.
Win recognition and awards for your energy savings here.
Find out more about how your dealership can "go green" at www.nada.org/green.
Regulatory Affairs on NADA-TV