Up To Speed - Q1 2022

Message from the President

LADA’S GOALS FOR THE NEW YEAR

As we begin a new year, I have been working with the LADA board to plan another aggressive agenda. We want to continue to build on our previous years successes where we passed historic legislation, including increasing the shop supply fee, the documentation fee and the rates by which a dealer gets reimbursed for warranty parts and labor. We know this is still a challenging time for dealers and therefore we plan to be active on many levels.

We will defend against attacks to the franchise system as we know franchise laws balance the relationship between dealers and manufacturers while protecting consumers. Franchise dealers are the cornerstone of many communities, employing thousands of people, contributing millions of dollars to local schools, universities, and charities and help contribute close to a billion of state tax dollars.

As the industry evolves towards a more streamlined sales model, with the OEM’s pushing new, electric vehicles, we know there is no one more important to that evolution than the local dealer. Studies have shown that consumers want to test drive and be educated on new models, charging technology, service and financing-all crucial roles a franchise dealer plays.

We also know the dealership facility requirements many OEM’s mandate are overly burdensome and outdated. Many of these requirements come too often and are unreasonable. We will look at addressing Louisiana law to better protect dealers against many of these arbitrary requests.

We will be hosting our Regional Grassroots meetings in the spring and educational webinars throughout the year so that dealers are informed about these and other critical state and national issues. In addition, LADA has on retainer some of the best franchise law, employment law and accountants ready to answer all your tough questions at no extra costs to you.

As you know, your membership and voluntary LADAPAC dues go directly to support these efforts. You should have received your dues notice by the time this message goes out. Without your membership, backed up by your voice, we would not be able to accomplish such lofty goals. So, thank you for your past trust and we hope we have earned your continued support.

Will H. Green LADA President/CEO LADA-SIF Fund Administrator

2022 NADA Chairman’s Address

MIKE ALFORD 2022 NADA CHAIRMAN

The National Automobile Dealers Association and its dealers reached major milestones in what has been one of the most complex times in our industry’s history. Franchised dealers from around the nation are standing strong in the face of a global pandemic, volatile market conditions, the evolution of EV technology, and an onslaught of challenges coming out of our nation’s capital. NADA has been proudly holding the front lines, and we couldn’t do it without the support and engagement of tireless dealer bodies like the Louisiana Automobile Dealers Association. As we look toward the year ahead, we must continue to gain ground on our most critical issues of 2022.

NADA is helping dealers navigate a landscape filled with new federal mandates as we continue to move through the year. The amended Federal Trade Commission’s Safeguards Rule contains complicated new technical, procedural, and security requirements that dealers must undertake this year. NADA is developing comprehensive compliance guidance which we will publish in the coming months. Once published, I urge you to carefully review this information and reach out to your technology vendors to ensure you’re in compliance.

Dealer advocacy and participation is more important than ever. We need your voice, your phone calls and your emails to your elected officials throughout the course of the year. NADA is working to improve a new EV incentive program as part of the massive

federal spending bill— because dealers know that these programs must work in the showroom and at the point of sale. As always, we’ll be fighting against harmful tax increases that hurt the nation’s auto and truck dealerships. We encourage you to engage with everyone, especially your members of Congress because these are battles we must win together.

Finally, when it comes to the EV debate, make no mistake that dealers are part of the solution! Despite what critics have said, franchised dealers are embracing the electric vehicle wave and we’re ALL IN. We are ready and eager to sell customers the vehicles they want. NADA has staunchly fought the conflation of electric vehicles and direct sales. Our goal is to present a solution to the government for its ambitions for an electric future, especially as these vehicles go beyond luxury and into the mainstream. NADA will continue to examine the internal and external challenges along the path to electrification, the motivations for prospective EV buyers, and how dealerships can best prepare for future EV sales with a data-driven approach.

LADA: We’ve become stronger and tougher from our experiences. No one knows this better than Louisiana’s dealership families who have worked so hard to re-build following Hurricane Ida. NADA is proud to support critical relief efforts through the NADA Foundation, and we stand in solidarity with all those affected by natural disasters.

2022 NADA Chairman’s Address

Dealers are process-oriented and we’ve always adapted our businesses through the winds of change. We’ve capitalized on a virtual world and have made the car-buying experience convenient and accessible for customers. Most of all, we’ve done a tremendous job protecting the health and safety of our employees, customers, and families. NADA has provided a constant stream of guidance and educational materials that have helped guide dealers since the pandemic began. I urge you to utilize NADA’s resources and visit our website often.

Having been an auto dealer since 1997, I can say this is truly a unique moment in our history. But one thing hasn’t changed: Our franchise system is still the most efficient and customer-friendly way to deliver automobiles to customers nationwide. There is more to come in 2022 and NADA will be here for dealers through it all. Fellow dealers, it’s my pleasure to serve you this year and I look forward to our work together!

Preparing your Dealership for Winter Weather

The weather in Louisiana can change drastically over the course of just one day. January is typically the coldest month of the year with the average high between 54°F and 62°F and the average low between 33°F to 47°F. However, freezing temperatures can still occur into late March.i On February 15 th and 16th of last year, South Louisiana experienced record low temperatures. The cold weather and wintery mix resulted in four (4) slip / fall injuries to dealership employees totaling over $38,000 in losses to date Putting a winter weather plan in place could potentially prevent avoidable slip / fall injuries to staff which can also help prevent injuries to your customers as well

7 Tips to Minimize the Impact of Winter Weather on Your Dealership

 Establish a plan to monitor the path and intensity of storms, and how you will communicate with employees. Louisiana’s Office of Homeland Security and Emergency Preparedness ( http://gohsep.la.gov/ ) can provide up to date winter weather disaster information.

 Designate parking areas, entrances / exits, and passageways that the dealership can reasonably maintain in safe condition and communicate this information to employees via text message / email.

 Put moisture absorbent mats, rugs, and runners at building entrances.

 Arrange for a staff member or contractor to remove snow / ice and apply sand or salt, if necessary, along walkways, in dealership lots, and access roads.

 Conduct periodic inspections of the property to identify hazardous areas, such as entrances and sidewalks. Pay particular attention to areas that will be in the sun for only part of the day and in the shade for the rest the day. A puddle in the sunlight could become a sheet of ice in the shade!

 Consider suspending operations in high risk outdoor areas (e.g., wash bays and detail) during these events

 Encourage staff to not leave the dealership property for breaks and lunch. If possible, this would be a good time to order delivery food (pizza, etc.).

Comprehensive winter weather guidance from OSHA can be found at https://www.osha.gov/winter weather/resources

For more information about workplace safety and health, please feel free to contact Risk Management Services’ Loss Prevention Department by email : (LossPrevention@rmsla.com) or phone 1 800 351 RISK (1 800 351 7475).

i Weather Atlas “January weather forecast and climate Louisiana USA”, https://www.weather atlas.com/en/louisiana usa weather january

Legal Corner AMENDED SAFEGUARDS RULE

by Lance Kinchen

On October 27, 2021, the Federal Trade Commission (“FTC”) issued the final amendments to the FTC Safeguards Rule (“Safeguards Rule”). The new Safeguards Rule under the Gramm-Leach-Biley Act (“GLBA”) requires financial institutions to strengthen their data security safeguards to protect consumer financial information. The new amendments to the Safeguards Rule contain a significant number of new and expanded requirements that financial institutions, including dealers, must satisfy to meet their information security obligations. The previous Safeguards Rule effective May 3, 2003, allowed for some flexibility based on the size and sophistication of the financial institution. The new Safeguards Rule applies to all dealers, regardless of their size (exception for 5,000 or fewer customer records),

systems, or the types of data they maintain.

Some of the highlights of the new Safeguards Rule are as follows:

1. Requires dealers to designate a “Qualified Individual” responsible for overseeing, implementing, and enforcing your information security program.

2. Requires a new comprehensive written document (a “Risk Assessment”) be prepared that contains and addresses certain areas of risks at the dealership. The new Safeguards Rule also requires additional periodically performed risk assessments.

3. Requires dealers to place access controls

Legal Corner

on information systems, including controls to authenticate and permit access only to authorized individuals to protect against the unauthorized acquisition of customer information, and to periodically review such access controls.

4. Requires dealers to encrypt all customer information, both in transit over external networks and at rest. This requirement also extends to all dealer vendors and others with access to dealership customer data.

5. Requires dealers to implement multi-factor authentication for any individual accessing any information system unless your Qualified Individual has approved in writing the use of reasonably equivalent or more secure access controls.

6. Requires dealers to implement policies, procedures and controls designed to monitor and log the activity of authorized users and detect unauthorized access or use of, or tampering with, customer information by such users.

7. Requires dealers to develop, implement, and maintain procedures for the secure disposal of customer information in any format no later than two years after the last date the information is used in connection with the provision of a product or service to the customer to which it relates, unless such information is necessary for business operations or for other legitimate business purposes, is otherwise required to be retained by law or regulation, or where targeted disposal is not reasonably feasible due to the manner in which the information is maintained.

8. Requires dealers to regularly test or otherwise monitor the effectiveness of the Safeguards key controls, systems, and procedures, including those to detect actual and attempted attacks on, or intrusions into, information systems.

9. Requires dealers to provide their personnel with security awareness training that is updated to reflect risks identified by the Risk Assessment.

10. Requires dealers to oversee service providers by taking reasonable steps to select and retain service providers that are capable of maintaining appropriate Safeguards for the customer information at issue, and requires dealers to periodically assess service providers based on the risks they present and the continued adequacy of their Safeguards.

11. Requires dealers to adopt a written incident response plan that addresses such things as the internal processes for responding to a security event, and identification of the requirements for the remediation of any identified weaknesses in your information systems.

Dealers, and all of their service providers that access any customer data have until December 9, 2022, to comply with the majority of the new requirements. However, some of the changes take effect January 29, 2022, such as regularly testing or monitoring the effectiveness of the safeguards, and overseeing service providers. Please consult with your attorney or other professional advisors regarding your specific facts and circumstances, and application of the new Safeguards Rule to your dealership.

Kinchen, Attorney Breazeale, Sachse, & Wilson

Lance

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Are you taking full advantage of your LADA membership? We offer a wide array of services to help carry out our mission of promoting the automotive trade and enhance the operations of our member dealers. From access to our on-retainer labor & legal counsel to staying connected with your industry

peers to equipping your staff with our Accelerate Educational Webinar Series, LADA is here to be an extension of your dealership or company and help you grow and succeed.