Portland, Ore. — Compli, in collaboration with Hudson Cook LLP and Auto Advisory Services of California, released a new “Adverse Action” compliance program, which is available free of charge to clients of Compli’s Dealership Compliance Management System (DCMS).
Compli’s DCMS is a compliance automation application that incorporates premier electronic content from subject matter experts such as Hudson Cook LLP (HudCo) and Auto Advisory Services (AAS); thereby, combining automated best practices to help create “good faith” compliance programs for dealerships that may limit liabilities and lower costs.
The new “Adverse Action” program is specifically designed to address the many content and training requirements associated with “Adverse Action” compliance related to dealership finance operations. In the recent past, dealers have traditionally relied upon their finance partners to provide this legally required response to a credit rejection. However, recent federal court rulings expanded on the necessity of car dealers to provide notice of adverse action under the Equal Credit Opportunity Act and the Fair Credit Reporting Act.
As the 7th Circuit Court found in the Treadway vs. Gateway Chevrolet Oldsmobile decision in 2004, even casual discussion about credit with a consumer could create a moment of liability for a dealer. From the courts’ perspective, dealers have become the center of the universe for adverse action notices in every deal they reject, which is the driving force behind this unprecedented collaboration among Compli, HudCo and AAS.
The New “Adverse Action” Program consists of:
-Adverse Action Program Overview
-Adverse Action Policy for Credit Transactions
-Adverse Action Internal Audit Form
-Adverse Action Computer-Based Training
-Adverse Action Computer-Based Training for California
-Sample LAW Form SCD - Notice of Credit Denial
-Sample LAW Form SCD-CA - Notice of Credit Denial for California
-Statement of Reasons Form
-Legal Article on Adverse Action from AAS
“Auto dealerships are some of the most highly regulated companies in the nation and are under greater scrutiny than ever before with respect to their sales and F&I compliance practices. By working with Compli on this new “Adverse Action” program we can help U.S. dealerships better understand their notice obligations so they can take the steps necessary to improve and enhance their F&I regulatory compliance,” said Michael Benoit of Hudson Cook.
“Adverse action notice compliance is a sleeping giant,” said Rob Cohen, attorney and president of AAS. “Dealers need to focus on this issue and develop policies and procedures aimed at reducing exposure to lawsuits. This collaboration provides dealers with practical guidance in this confusing area.”