Regulatory News & Updates
FTC and FRB Release Final Risk-Based Pricing Rule
The Federal Reserve Board and the Federal Trade Commission have released their long-awaited joint Final Risk-Based Pricing Rule. The rule, which implements section 311 of the FACT Act of 2003 and takes effect January 1, 2011, generally applies to dealers who obtain a credit report regarding a consumer and then enter into a credit transaction with that consumer. Covered dealers must issue a Risk-Based Pricing Notice (RBPN) to those consumers to whom the dealer extends credit on terms that are "materially less favorable" than those entered into with a "substantial proportion" of the dealer's other credit customers. Because of the difficulty in determining which customers fit into this ill-defined category, NADA recommended -- and the agencies adopted -- an Exception Notice that dealers and other creditors may issue in lieu of the RBPN. The criteria for using the Exception Notice and other elements of the Risk-Based Pricing Rule are explained in a preliminary NADA summary available here.
FTC Issues New "Optional" Model Privacy Notice
As part of a statutory mandate to develop a more understandable template for privacy notices issued by dealers and other financial institutions, the Federal Trade Commission and the federal banking regulatory agencies have jointly issued a new model privacy notice that, beginning December 31, 2009, will serve as a safe harbor for the language used in the notice for financial institutions that choose to adopt it. (More)
Compliance with EPA’s Body Shop Hazardous Air Pollutant Rule
The Environmental Protection Agency’s (EPA) rule governing hazardous air pollutants (HAPs) requires existing body shops to file an Initial Notification Form by January 11, 2010. Full compliance is due by January 11, 2011. (More)
EPA Reconfirms SPCC Qualified Facility Rule; Compliance Date Remains Nov. 10, 2010
The U.S. Environmental Protection Agency (EPA) issued a final Spill Prevention, Control and Countermeasure (SPCC) rule on Nov. 13, 2009, keeping intact a 2008 amendment designed to provide regulatory relief for small facilities, including dealerships. EPA has confirmed that “Tier 1” qualified facilities may use a simple, self-certified SPCC plan template in lieu of a complex written plan.
Tier 1 qualified facilities are those that:
(1) Have 10,000 or fewer gallons in aggregate aboveground oil storage capacity and a maximum individual oil storage container capacity of 5,000 gallons, and
(2) For the three years preceding SPCC plan certification, have no single discharge of oil to navigable waters exceeding 1,000 gallons, or two discharges of oil to navigable waters each exceeding 42 gallons within any 12-month period.
In 2006, EPA designated most facilities storing fewer than 10,000 gallons of oil and related fluids to be “qualified facilities” eligible to prepare and self-certify their own written facility SPCC plan, thereby avoiding the expense of hiring a professional engineer to do so. The new option for Tier 1 facilities is even less burdensome.
NADA Regulatory Affairs intends to publish further guidance on this issue in early 2010. Click here for a copy of the self-certification SPCC plan template ( .pdf).
Forrest McConnell, Chairman
NADA Regulatory Affairs Committee
FTC Again Delays Enforcement of Red Flags Rule
On Oct. 30, the Federal Trade Commission announced that it is delaying its enforcement of the Red Flags Rule until June 1, 2010. For more information, see the FTC Press Release at http://www.ftc.gov/opa/2009/10/redflags.shtm, and the FTC FAQs on Red Flags and Address Discrepancy Rules.
All NADA members have received a copy of A Dealer Guide To The Red Flags and Address Discrepancy Rules; Protecting Against Identity Theft. 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, watch the NADA video, “Identity Theft,” here.
2010 Annual Fuel Economy Guide Now Available
Dealers have a legal responsibility to provide the guide to customers upon request
Unveiling the 2010 Fuel Economy Guide, the U.S. Department of Energy and U.S. EPA are seeking help from dealers to provide their customers with information about fuel economy and the benefits of driving more fuel-efficient vehicles. The guide gives consumers important information about estimated fuel costs and mileage standards for model year 2010 vehicles. The guide is also available to mobile users (fueleconomy.gov/m), and is readily accessible from a mobile device, smart phone, or personal digital assistant. Click here for the EPA/DOE letter detailing the legal responsibility of dealers to make the guide available to customers.
There are a number of options available for dealers to meet these requirements. First, EPA/DOE will electronically distribute the guide to dealers. To meet regulatory obligations to display a booklet and to provide a booklet to customers upon request, dealers can print the guide from either the electronic file, which will be emailed or available by download at www.fueleconomy.gov.
Alternatively, if access to the Internet is unavailable, dealers may order printed paper guides. Orders are currently being accepted and will be mailed, free of charge, by the end of November 2009. Click here to place an online order for paper guides. Printed copies also can be requested from DOE’s Information Center by calling (877) 337-3463 between 9 a.m. and 7 p.m. EDT. Click here for a form to order paper copies by mail.
Text Messaging: Regulations for Dealer Communications with Customers
Communications with prospective customers or others via “text messaging” may be subject to a number of federal regulations. The legal landscape covering text messaging was crafted before such technology existed. A text message may be deemed to be a phone call, an email, or perhaps even both under federal law. Read the issue summary here.
IRS Issues Alert on Tax Consequences of CARS Payments
The IRS Motor Vehicle Technical Advisor on July 31 issued an automotive alert on the federal tax consequences of CARS payments received by automobile dealers. To view the alert, click here.
SBA Moves to Include Floorplan Loans in 7(a) Program
The Small Business Administration on July 1 launched a pilot program to provide eligible dealers with government-backed lines of credit under its 7(a) loan guarantee program to finance their vehicle inventory. The program, which runs through September 30, 2010, provides a guarantee of up to 75 percent for as much as a $2 million loan for floorplan financing.
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.
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. |