GNYADA 2019 Membership Directory & Services Guide

6. If spot deliveries are permitted in your state, always use a spot agreement containing terms permitted or required by your state’s statutory or case. Include language that gives both you and the buyer the right to unwind or re-contract if you cannot obtain financing approval for the original contract on the terms set forth in the RISC. Your attorney should review and approve your form spot agreement for compliance with your state’s laws. Track your percentage of unwound spot deals. A significant percentage can lead to claims of deliberate “yo-yo” financing by the dealership which some courts have held to be an unfair trade practice. 7. Document the re-contracting of an unwound spot deal. When you re-contract a spot deal, do not backdate the new contract the customer is signing. Date the new contract on the day when both parties sign. And don’t forget to give the customer an adverse action notice for unwinding the original contract. 8. Be able to show customers how they can quickly thaw their frozen credit files. For customers who have placed security freezes on their credit files, have a sheet of paper available containing the phone numbers of all three national credit bureaus (Equifax, Experian, and TransUnion) for the customer to call to temporarily “thaw”their credit files so that you can pull a credit report on the customer. This will require the customer to have available the PIN issued to them by the credit bureau when they froze their credit file. It is not advisable to take the customer’s PIN or offer to make the calls for the customer. If you spot deliver or sell a vehicle to a customer with a frozen credit file, proceed with extreme caution. Consider obtaining additional information, such as a pay stub, bank statement, or other evidence of the customer’s creditworthiness, and be especially diligent when verifying the customer’s identity. Few lenders will purchase a contract for a customer on whom they cannot pull credit. 9. Provide full disclosure and obtain the customer’s consent to install and use starter interrupt or GPS technology for payment assurance purposes. Be transparent about the use of GPS technology. The disclosure must at minimum explain that the technology is installed on the vehicle as a condition of the extension of credit, describe how the technology will be used, and obtain the consent of the buyer to the use of the technology. Additional Resources FCRA: www.consumer.ftc.gov/articles/pdf-0111-fair-credit-reporting-act.pdf ECOA and Regulation B: www.fdic.gov/regulations/laws/rules/6500-2900.html The OCC’s Handbook containing information on TILA: occ.gov/publications/publications-by-type/ comptrollers-handbook/truth-in-lending-handbook.pdf Car Buyer’s Bill of Rights California: www.consumer.ca.gov/publications/car_buyer_rights.shtml Minnesota: www.mada.org/Portals/70/Documents/Legal/Consumer/BillRightsBulletin.pdf Servicemembers Civil Relief Act: www.military.com/benefits/content/military-legal-matters/scra/ servicemembers-civil-relief-act-overview.html The Risk-Based Pricing Rule: www.ftc.gov/news-events/press-releases/2011/07/ftc-federal-reserve-board- issue-final-changes-risk-based-pricing Information about Filing IRS Form 8300 on cash deals with cash payments over $10,000: www.irs.gov/pub/irs-pdf/p1544.pdf

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