JULY 2016 MidAtlantic Dealer News

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LEGAL CORNER Tom (thudson@hudco.com) and Nikki (nmunro@hudco. com) are partners in the law firm of Hudson Cook, LLP. Tom is the author of a book, CARLAW®, and is the Editor/author of the CARLAW® F&I Legal Desk Book. The books are available at www.counselor library.com. Tom is also the publisher of Spot Delivery®, a monthly legal newsletter for auto dealers, and the Editor in Chief of CARLAW®, a monthly report of legal developments in all states for the auto finance and leasing industry (not to be confused with the book). Nikki is a contributing author to the F&I Legal Desk Book and frequently writes for Spot Delivery®. Spot Delivery®, CARLAW® and the books are produced by CounselorLibrary.com LLC. For information, call 410.865.5411 or visit www.counselorlibrary.com. Copyright CounselorLibrary. com 2015, all rights reserved. Single publication rights only, to the Association. HC# 4851-4777-3234 6/16) THE CARLAWYER © By Thomas B. Hudson and Nicole Frush Munro We’re back, passing on what we’ve recently learned about legal developments in the auto sales, finance and lease world. This month, we feature developments from the Consumer Financial Protection Bureau and the Federal Trade Commission, as well as our “Case of the Month.” Remember – we aren’t reporting every recent legal development, only those we think might be particularly important or interesting to industry. Why do we include items from other states? We want to show you new legal developments and trends. Also, another state’s laws might be a lot like your state’s laws. If attorneys general or plaintiffs’ lawyers are pursuing particular types of claims in other states, those claims might soon appear in your state. Note that this column does not offer legal advice. Always check with your own lawyer to learn how what we report might apply to you, or if you have questions. THIS MONTH’S CARLAWYER© COMPLIANCE TIP Signed up for the CFPB’s complaint portal yet? You need to be monitoring complaints from all sources, and the CFPB offers one more source for determining whether your customers are unhappy with you. And taking care of complaints is one of the most effective ways of staying out of the regulators’ crosshairs. What, exactly, are you waiting for? FEDERAL DEVELOPMENTS Speaking of complaints, on May 24, the CFPB released its monthly complaint report, which highlights trends in the complaint data the Bureau receives through its Consumer Complaint Database. The report includes complaint data specific to certain companies, overall complaint volume and complaint volume by state, and other trends in the data. Each month, the report spotlights complaints about a particular issue and complaints from a particular geographic location. The latest report focuses on complaints related to credit reporting and highlights complaints from consumers residing in New Mexico. Are You Involved in Title Lending? On May 18, the CFPB released a report on the title loan business. The CFPB’s report demonstrated that 20% of borrowers who obtain a single-payment auto title loan have their car or truck seized by their lender when they default. Evidently, that means that 80% of these borrowers managed to get past their dire financial problems without having their cars seized, but that narrative doesn’t advance the CFPB’s agenda. According to the CFPB’s research, lenders renewed more than 80% of these loans on the due date because borrowers could not otherwise repay the loan. The report examined nearly 3.5 million anonymized, single-payment auto title loan records from nonbank lenders from 2010 through 2013. The CFPB concluded from its study that these auto title loans have issues similar to payday loans, including high rates of consumer reborrowing, which can trigger high costs in fees and interest. Warranty Rule Changes on the Way. On May 18, the FTC proposed to amend the rules governing Disclosure of Written Consumer Product Warranty Terms and Conditions (“Disclosure Rule”) and Pre-Sale Availability of Written Warranty Terms (“Pre-Sale Availability Rule”) to implement the E-Warranty Act, which allows for the use of websites to disseminate warranty terms to consumers in some circumstances. The Disclosure Rule specifies the aspects of warranty coverage that must be disclosed in written warranties, as well as the exact language that must be used for certain disclosures with respect to state law regarding the duration of implied warranties and the availability of consequential or incidental damages. Under the Disclosure Rule, warranty information must be disclosed in simple, easily understandable, and concise language in a single document. The warrantor must disclose any limitations on the duration of implied warranties on the face of the warranty, as mandated by the Magnuson-Moss Warranty Act. The FTC proposes to revise the Disclosure Rule to specify that disclosures mandated to appear ‘on the face’ of a warranty posted on an Internet website or displayed electronically must be placed close to the text of the warranty terms begins. The Pre-Sale Availability Rule details the methods by which warrantors and sellers must provide warranty terms to consumers prior to sale of the warranted item. The FTC proposes to revise the Pre-Sale Availability Rule to allow warrantors to post warranty terms on websites if they also provide a non-Internet method for consumers to obtain the warranty terms and satisfy certain other conditions. Comments on the proposed rule are due by June 17. So there’s this month’s roundup! Stay legal, and we’ll see you next month. 3 28 | JULY 2016 MIDATLANTIC DEALER NEWS
ADESA PITTSBURGH HOLDS THEIR LARGEST SALE OF THE YEAR! ADESA Pittsburgh Auto Auction opened their doors for a huge two day sale on Monday and Tuesday, May 23 – 24. The event kicked off on Monday afternoon with a 300+ vehicle sale followed by a free social and concert by “The Clarks” in the evening. On Tuesday the auction held their largest consignment sale of the year with prizes and giveaways in the lanes! Congratulations to General Manager Chris Angelicchio and everyone else at ADESA Pittsburgh on a great event! . 3 ◊ Garage and Automobile Liability ◊ Dealer Physical Damage ◊ Tow Truck on the Same Policy ◊ Quick Quote Turnaround ◊ Low Monthly Payments 607 Corporate Drive, West Langhorne, PA 19047 215-860-6510 Tel. www.KramerInsuranceCenter.com MIDATLANTIC DEALER NEWS JULY 2016 | 29
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JULY 2016 MidAtlantic Dealer News

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