Issue link: https://read.dmtmag.com/i/243961
10 • January 27, 2014 • Powersports Business www.PowersportsBusiness.com FINANCIAL J F&I SOLUTIONS How is your 2014 compliance plan shaping up? As we begin 2014, I wanted to review important items that every dealership should not only be aware of, but also should have implemented into their dealership operations. As an industry-level member of the Association of Finance and Insurance Professionals (AFIP) and a Certified Compliance Expert, I thought it would be a great idea to spend a few moments with AFIP's executive director, David Robertson. AFIP was started in 1989 as a way to edu- cate F&I professionals on the rules and regulations that affect their profession. Since its inception, AFIP has certified more than 40,000 F&I professionals. Only one certified F&I manager is known to have gotten their dealership in trouble with regards to compliance since certification began. One of the biggest factors affecting our industry, and still relatively new, is the CFPB (Consumer Financial Protection Bureau). The expectations of the CFPB are fairly simple — employers who have employees who must be cognizant of state and federal regulations are required to train those employees and ensure that they use this knowledge in their daily job functions. These same dealerships also must ensure that they have someone in charge of all of their compliance requirements. This individual must monitor the dealership's compliance programs as well as enforce them. As regulations change or new employees join the team, current and new employees also DEALER FINANCIAL SNAPSHOT NORTHWEST -1.4% NORTHEAST 3.0% MIDWEST 11.5% Service Department 17.5% Major Units 14.4% 0.5% Parts Department 4.6% Parts Department Overall Parts Department Service Department -1.4% -1.0% Service Department Major Units -0.6% Major Units WEST 0.2% Overall 6.8% 4.8% Overall Parts Department 5.3% Service Department 12.6% Major Units SOUTH -12.4% 8.9% Overall Parts Department 0.0% UNITED STATES 0.1% Parts Department Service Department 3.1% 8.2% Major Units Major Units 2.2% 0.4% 5.8% Service Department Overall Overall DECEMBER 2013 PARTS SALES Same store sales for 1,329 metric and V-twin dealers in the U.S. were up 5.8 percent overall in December 2013 over December 2012. Each department was up, though parts saw only a 0.1 percent increase. Major units were a highlight for the Midwest, up 17.5 percent, and the West, up 12.6 percent. Northwest unit sales were down 1.4 percent. While parts were up 11.5 percent in the Midwest, the department dropped 12.4 percent in the South. 602 dealers were up in parts, while 727 were down. FOR MORE ON THE SAME STORE SALES DATA SERVICE SALES For more information on this report and other industry data, contact: adplightspeed.com/dataservices In service, 654 dealers were up, and 620 were down. MAJOR UNIT SALES Major unit sales were up for 657 dealers and down for 510. must be trained. This training should be documented and continually updated. So, too, must this individual enforce penalties when proper policies and procedures are not followed. This is only fair as the penalties for non-compliance can be as high as $11,000 per violation. (An example of a violation would be a facility that leaves a single credit application out on a desk or table or in any PETER JONES area that is not a noted "Secure Document" area and is at that moment not secured from public view.) It's important for dealers to realize that while this all may seem very intimidating, it's actually fairly simple. You can look at it this way: First, in the course of your business, whether sales or service, your dealership and employees have access to and must secure non-public personal information. These secure areas have to be documented and there must be signs noting this to the public. Only those employees that must have access to the information to complete their jobs can be allowed access. Employees who will be working with the information must be trained, as we mentioned earlier, and sign an acknowledgement of their training and responsibilities. Rules and technology change often, therefore, you should have someone in charge of your compliance to monitor this and ensure that your dealership is always in compliance. We both agreed that there are two key areas in which dealerships should immediately ensure they are in compliance: 1. You must follow the regulations for consumer protection, which include Regulations Z, V, B and M. To ensure you are doing this, your F&I manager (or anyone performing this function) must be fully trained in those regulations. I recommend having those team members become AFIP certified. 2. Dealers must be concerned with meeting the requisites of the Red Flags and Safeguards Rule. These entail dealerships that have and maintain a customer identity safeguards program. While I have heard from many smaller stores that because of their size or remote location they don't feel they are a risk, the Internet has increased their exposure to theft. Not too long ago I was working with a dealership in the eastern United States. During See Jones, Page 11 STOCK MARKET WATCH MARKET WATCH S&P 500 Index 124.334 1.25 1.02% 180 160 140 120 100 PSB INDEX VALUE 5/7/13 80 P10x11-PSB2-Finance.indd 10 DOW JONES INDEXED S&P 500 INDEXED 1/6/14 2.49% 12/9/13 3.48 11/8/13 142.863 200 10/14/13 Dow Jones Index 220 9/16/13 1.37% 8/20/13 3.42 7/23/13 253.752 240 6/21/13 Powersports Business Index 260 5/28/13 Change 1/6/14 from 12/9/13 % Change Source: Wells Fargo Securities LLC POWERSPORTS BUSINESS WINNERS AND LOSERS STOCK MARKET ACTIVITY ww Company ArvinMeritor Orbital Engine Corp. Ltd. ADR Polaris Industries, Inc. Deere & Company Cooper Tire & Rubber Brunswick Corp. Speedway Motorsports, Inc. Honda Motor Corp. ADR ARI Network Services, Inc. Universal Technical Institute Stock Ticker ARM OE PII DE CTB BC TRK HMC ARIS UTI Price 1/6/14 $10.32 $2.44 $143.64 $89.91 $25.18 $45.54 $19.71 $40.80 $3.26 $13.52 Percent Change 32.5% 6.5% 5.6% 5.4% 4.9% -0.3% -1.8% -2.7% -4.1% -10.4% 1/15/14 11:56 AM my bo flo the ber wi fin if a or rea bo wi eas Th avo A B C Eu In In Ja M Ph S S Ta Th N B O c C th B C v fo w v d w v p B P fo o a p th a in is w w o e T p th Y a