Many dealerships permit their Finance staff to “mark up” whichever APR finance rate the lending company offers as its “buy rate”. In many cases, the Finance person has authority to choose any mark up they desire – some customers may only pay one percentage point markup, while others will pay two points and so on. […]
Category: Consumer Finance
Effective January 1, 2011, the FTC’s Risk-Based Pricing Rule imposes a new disclosure requirement on creditors. This new rule was motivated by a concern that, because consumers are entitled to “adverse action” notices under the Fair Credit Reporting Act only when they are denied credit (or reject a counteroffer for credit), consumers are not adequately apprised of the effect credit reports have on the pricing of credit.
OFAC is a database compiled by the Office of Foreign Assets Control which identifies “Specially Designated Nationals” (SDN) with whom you are prohibited from doing business. The penalties for conducting business with a person or entity listed in OFAC are some of the most severe you face as an auto dealer.
The FTC “Red Flags” Rule has caused quite a stir in dealership circles. In fact, I’m asked about “Red Flags” more frequently than any other topic. Dealers are concerned about what the rules mean and how they will impact the way they do business.
The Privacy Rule requires financial institutions to give their customers privacy notices that explain the financial institution’s information collection and sharing practices. In turn, customers have the right to limit some sharing of their information.
The Safeguards Rule requires financial institutions (defined to include dealers who play any part in financing or leasing) to develop and maintain an “information security program” to protect the confidentiality and integrity of personal consumer information.