GNYADA April 2019 Newlsetter

5 CFPB Inactivity Leads to States Reviewing Credit Compliance Policies

creed, color, national origin, sexual orientation, military status, age, sex, marital status, disability, or familial status. Guidance Targets Dealers This guidance specifically addressed dealer markup. Because dealer markup is part of the credit transaction, it must be charged non- discriminatorily to comply with the Fair Lending Law. Dealers should review the guidance, which can be found here: https://www.dfs.ny.gov/ legal/industry/il180823.pdf.

while operating a dealership vehicle, the ticket is the employee’s responsi- bility and the dealership does not have to reimburse them. Camera-issued tickets If a violation caught by a “red light camera” (for example) gets issued to the dealership as the owner of the vehicle, the dealer should follow the same procedure as for parking viola- tions. Code violations Vehicle code violations such as a bro- ken taillight or excess emissions are similar to “breakage” or “spoilage” and, therefore, must be paid only by the dealer. The employee may not be asked to reimburse the dealer for these tickets, unless the breakage resulted from a negligent act by the employee. disclosure forms. GNYADA suggests that your dealership have a policy in place to ensure your financing practices are compliant with existing laws. NADA’s Fair Credit Compliance Policy & Program will help your dealer operate in a compliant manner. https://www.nada.org/faircredit/ Although the CFPB generally lacks authority over franchised new car deal- ers who engage in indirect financing, it does have authority over financing sources. The CFPB recently ordered an automotive financing company to pay nearly $12 million in fines and restitu- tion to resolve claims regarding loan add-on products and loan extensions.

New York, like several other states is looking to expand consumer financial protection laws and enforcement since the CFPB in Washington has not filed any new enforcement actions in more than a year. In New York the Department of Financial Services (DFS) continues to propose legislation that would increase State DFS Guidance Prohibits Discrimination Earlier this year, the DFS issued guidance to ensure compliance with New York’s Fair Lending Law, which prohibits discrimination in the granting, withholding, extending, or renewing, or in the fixing of the rates, terms, or conditions of any form of credit on the basis of race, oversight on dealers and add protections for consumers.

Best Practices Legislative and regulatory

enforcement activity are expected to increase in New York. Dealers in New York City must already complete additional financial

6 Dealership Vehicles: Liability for Tickets

ticket costs, nor can they demand that the employee pay the summons. Here is a breakdown of various vehi- cle violations, as well as dealers’ responsibilities for each: Parking violations If an employee receives a summons for parking a dealership vehicle ille- gally, the dealer is prohibited from requiring the employee to reimburse the dealership as a condition of employment. A dealer may ask for reimbursement, while clarifying that the employee will not be retaliated against or disciplined should they choose not to. Moving violations Moving violations are usually issued to the driver of the vehicle, not the owner. Accordingly, if an employee is issued a ticket for a moving violation

Dealership employees sometimes receive tickets for parking or moving violations, when operating dealership vehicles. As the official owners of the vehicle, dealers are generally on the hook for tickets assigned to the vehi- cle; they cannot deduct from the employee’s wages, in order to cover

4 Greater New York Automobile Dealers Association • www.gnyada.com The Newsletter • April 2019