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Oklahoma Independent Automobile Dealers Association

DEALERS’ RESOURCE August 2012

Watch Your Advertising...

The Commission Is. In This Issue • FTC Charges Dealer with Privacy Violations • UMV&PC Watching Dealer Advertisements • Final Oklahoma Legislative Report

Change Service Requested DALLAS, TEXAS Permit No. 2079

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PRSRT Standard U.S. Postage

OIADA, P.O. Box 6905, Moore, OK 73153

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MAGAZINE CONTENTS

06 Watch Your Advertising 10 FTC Hits Dealer With Privacy Charges 16 Oklahoma Legislative Report

ADVERTISERS INDEX 71B Auto Auction...................................................... 13 ADESA...............................................Inside Back Cover Albright Insurance ..................................................... 7 Ally........................................................................... 15 AutoTrader.com.......................................................... 5 Chickasha Auto Auction............................................ 22 Dealer’s Auto Auction of OKC......................Back Cover Jordan Insurance Group............................................. 9 Kelley Blue Book...................................................... 11 Loftis Wetzel Insurance............................................ 25 Manheim.com...........................................................17 Manheim North Texas ..................... Inside Front Cover NIADA Certified......................................................... 33 Nowcom .................................................................. 19 Oklahoma Auto Exchange........................................ 20 United Acceptance................................................... 21 Voisys ...................................................................... 34

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NIADA Member Health Plans, administered by JLBG Health, bring you choice and flexibility when designing your personal health plan while providing potential savings of thousands of dollars annually. To review the plan details and receive an instant online rate, visit www. NIADAHealthPlans.com or call 1-888-308-9340.

813 NORTHWEST 34TH MOORE, OK 73160

EMAIL: odell.morgan@sbcglobal.net AMBER SNOOK, Administrative Assistant

JACKIE GARNER, Office Manager

JARED MORGAN, Electronics/ Software Technician

PRESIDENT

Chris Goad Regal Motors 3515 N. May Oklahoma City, OK 73112 405-917-5800 managerokc@regalcars.com

CHAIRMAN OF THE BOARD

John Easttom Auto Mart of Elk City P.O. Box 981 Elk City, OK 73648 580-225-1100 automart@cableone.net

SECRETARY/ TREASURER

Bruce Beam Dealers Auto Auction of OKC 1028 S. Portland Oklahoma City, OK 73147 405-947-2886 www.daaokc.com

VICE PRESIDENTS

John T. Longacre, IV Taft Motors, Inc. 722 S. Linden St. Sapulpa, OK 918-224-7700 taftmotorsinc@msn.com Julian Codding Reliable Motors, Inc. 9201 S. Shields Oklahoma City, OK 405-912-5000 juliancodding@msn.com Monte Shockley Shockley Auto Sales 2605 N. Broadway Poteau, OK 74953 918-647-3999 sas@clnk.net

OIADA OFFICE

ROSE & ODELL MORGAN, Executive Directors

OIADA BOARD OF DIRECTORS

LYNNA KAY, Programmer STEVE MORGAN, Consultant MIKE MORGAN, Technical Aide

FOR INFORMATION ON HOW TO BECOME A MEMBER OF OIADA PLEASE CONTACT ROSE OR ODELL MORGAN AT 405-232-2947.

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV NIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR TROY@NIADA.COM.

DEALERS’ RESOURCE IS A PUBLICATION OF AUTOMOTIVE DEALERS RESOURCE OF OKLAHOMA (ADR) PRODUCED ON BEHALF OF THE OKLAHOMA INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION (OIADA), P.O. BOX 6905, MOORE, OK 73153. THE DEALERS’ RESOURCE IS PUBLISHED MONTHLY BY THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPORATION. PERIODICAL POSTAGE PAID AT ARLINGTON, TX, AND AT ADDITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO OIADA, P.O. BOX 6905, MOORE, OK 73153. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF ADR OF OKLAHOMA, THE OKLAHOMA INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEMBERS OF OIADA OR NIADA DOES NOT CONSTITUTE AN ENDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT © 2011 BY O&R MORGAN, INC. DBA OIADA. ALL RIGHTS RESERVED. DEALERS’ RESOURCE IS A PUBLICATION OF AUTOMOTIVE DEALERS RESOURCE OF OKLAHOMA ON BEHALF OF THE OKLAHOMA INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION (OIADA), BUT IS MAILED TO ALL DEALERS IN THE STATE IN AN EFFORT TO EDUCATE AND ENCOURAGE NON-MEMBERS TO JOIN THE ASSOCIATION AND SUPPORT OUR EFFORTS TO IMPROVE THE IMAGE AND PROFIT POTENTIAL OF THE INDUSTRY. FOR 55 YEARS, WE HAVE WORKED TO REPRESENT THE INDEPENDENT MOTOR VEHICLE DEALER IN OKLAHOMA. WE NEED YOUR SUPPORT.

Alert: OKC BHPH Dealers Defrauded Local authorities are investigating reports of persons fraudulently obtaining title to vehicles from Buy HerePay Here dealers in the Oklahoma City area. The individuals allegedly submit verifiable credit information, provide substantial down payments and contract for a vehicle. Next, they allegedly send the dealer a Title 42 notice appearing to comply with state law. The notices, however, are blank (inside the envelope), making it difficult or impossible for the dealer to identify the vehicle involved.

BY ADR STAFF

Glenn McDaniel I-35 Credit Auto 1113 SE 51st St. Oklahoma City, OK 73129 405-670-4100 gtamcd@aol.com David McQuerry McQuerry Motors, Inc. 1302 N. Harrison St. Shawnee, OK 74801 405-273-8171 mcquerrymotors@yahoo.com

OIADA CONTACT INFO

FRONT COVER BY Mike Morgan STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITOR Andy Friedlander • andy@niada.com ART/PRODUCTION MGR. Christy Haynes • christy@niada.com PRINTING Nieman Printing

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Reassignment of Out-of-State Titles

Of the 279,156 complaints relating to identity theft, 27 percent were related to government documents or benefits fraud, primarily associated with tax or wage fraud. Credit card fraud accounted for 14 percent of identity theft complaints, followed by phone or utilities fraud at 13 percent and bank fraud at 9 percent. Loan fraud accounted for 3 percent of the identity theft complaints, with less than 1 percent related to auto loans and leases. The CSN is a secure online database of millions of consumer complaints available only to law enforcement. In addition to storing complaints received by the FTC, the CSN also includes complaints filed with various federal and state agencies as well as consumer-interest organizations such as the Better Business Bureau. The CSN was established in 1997 and now holds more than 7 million complaints dating from 2007 through 2011. The complaints include topics such as credit reports, debt collection, mortgages and lending. More information about the CSN can be found online at www.ftc.gov/sentinel.

The Motor Vehicle Division of the Oklahoma Tax Commission recently issued the following notice to Motor License Agents (MLA): We continue to encounter confusion regarding Oklahoma motor vehicle dealers reassigning out-of-state titles. Agents are specifically reminded of the $15 VIN/odometer inspection requirement for all vehicles on which a licensed Oklahoma used motor vehicle dealer is reassigning ownership on an out-of-state title. That process is outlined on pages 2.90-2.91 of the MLA Manual. Some important points to bear in mind: • Oklahoma licensed used motor vehicle dealers are allowed to reassign other state certificates of title, including Indian tribal titles. This option is not available to non-motor vehicle dealers, including boat/motor dealers. Used motor vehicle dealers may, as an alternative, apply for Oklahoma title to such vehicles. • Before reassigning an out-of-state title – regardless of whether that reassignment is to an Oklahoma resident or a non-resident, or to an individual or another dealer, the (initial) Oklahoma dealer is required to have a standard VIN/ odometer inspection completed at an Oklahoma MLA, for a fee of $15. • The resulting inspection form (701-6) and one (1) copy of the inspection fee transaction receipt are to be attached to the out-of-state title and returned to the dealer for subsequent submission with the reassigned out-of-state title at time of title application by the buyer. • Should the out-of-state title be reassigned by the Oklahoma dealer to an Oklahoma resident, a copy of the $15 inspection fee transaction receipt and the completed inspection form (701-6) are required to be submitted with the titling documentation to verify the dealer’s compliance with this inspection requirement. • As noted above, should an out-of-state title be assigned to an Oklahoma dealer, then reassigned to an out-of-state dealer, then subsequently reassigned to an Oklahoma resident, the $15 inspection is required to be completed by the Oklahoma dealer. The inspection form and fee transaction receipt must be submitted with the out-of-state title when application for Oklahoma title is made. • Oklahoma motor vehicle dealers may use other states’ reassignment sheets when attached to that state’s title certificate (i.e., a Texas reassignment sheet attached to a Texas title) and provided the initial reassignment on that sheet was made by a dealer in that state (i.e. Texas dealer reassigning to an Oklahoma dealer on a Texas reassignment sheet). An Oklahoma dealer may not, however, use another state’s reassignment sheet as the initial assignor, i.e., last assignment on Texas title certificate is to an Oklahoma dealer. The Oklahoma dealer cannot attach a Texas reassignment sheet to the Texas title. The Oklahoma dealer would have to apply for an Oklahoma title. • No notarization of an Oklahoma dealer’s reassignment is required if the title is from a non-notary state. Please direct any questions regarding the above to the Title Section.

BY ADR STAFF

BY ADR STAFF

W W W. F T C . G O V / S E N T I N E L

Auto-Related Complaints In 2011, automobile-related issues ranked in the top 10 of consumer complaints reported to the Consumer Sentinel Network (CSN), a nationwide database administered by the Federal Trade Commission. The CSN received more than 1.8 million complaints during 2011. Fifty-five percent were fraud complaints, 15 percent were identity theft complaints and 30 percent were other types of complaints. Complaints are organized into 30 separate categories. Identity theft and debt collection topped the list.

TOP 10 COMPLAINT CATEGORIES

Category Complaints Pct. Identity theft 279,156 15 Debt collection 180,928 10 Prizes, sweepstakes and lotteries 100,208 6 Shop-at-home and catalog sales 98,306 5 Banks and lenders 89,341 5 Internet services 81,805 5 Auto-related 77,435 4 Imposter scams 73,281 4 Telephone and mobile services 70,0244 4 Advance-fee loans and credit 47,414 3 protection/repair

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F E D E R A L T R A D E C O M M I S S I O N ’ S W E B S I T E : W W W. F T C . G O V

Watch Your Advertising – Others Are Consumers aren’t the only ones watching your advertising. The Oklahoma Used Motor Vehicle and Parts Commission is watching also. The commission is actively monitoring used dealer ads for violations of advertising laws and regulations. It is particularly alert for any deceptive or misleading statements. The deception can involve any part of the ad, such as the product itself, conditions of the offering or financing for the sale. It is ultimately the dealership’s responsibility to ensure its advertising complies with the law. Do not rely on the agency preparing the ad to ensure compliance. Both in spirit and in fact, your advertising should be truthful and non-deceptive. You should have evidence to back up any claims, and your advertisements should not be unfair. When preparing your advertising material for correctness, look at the ad from the point of view of the “reasonable consumer” – the typical person looking at the ad. Rather than focusing on certain words, look at the ad in context – words, phrases and pictures – to determine what it conveys to consumers. General Advertising An ad can be considered deceptive if it contains a statement – or if it omits a statement – that is likely to mislead consumers acting reasonably under the circumstances and is “material,” that is, important to a consumer’s decision to buy or use the product. For example, an advertisement might read, “2007 Chevy, only $75 per month.” Whether this is a bargain depends on information missing from the advertisement, such as the down payment and the number of payments. The ad also omits the annual percentage rate and does not state whether the transaction is a credit sale or a lease. The ad needs to tell the whole story. Under the law, advertisers must have proof to back up both “express” and “implied” claims consumers take from an ad. An express claim is literally made in the ad. For example, “We finance anyone”

is an express claim that any consumer can obtain financing through your dealership. An implied claim is one made indirectly or by inference. “No money – no problem” contains an implied claim that anyone, regardless of financial position, can obtain financing for a vehicle purchase. Bait and switch advertising is a violation of the law. It is illegal to advertise a product if you have no intention of selling that item, but instead plan to sell a consumer another product, usually at a higher price. Rebate offers may be particularly scrutinized. Ads that include rebate promotions should prominently state the before-rebate cost, as well as the amount of the rebate. Only then will consumers know their actual out-of-pocket cost and have the information they need to comparison shop. Rebate promotions also should clearly disclose any additional terms and conditions consumers need to know, including the key terms of any purchase requirements, additional fees and when consumers can expect to receive their rebate. If an ad mentions that a product comes with a guarantee or warranty, the ad should clearly disclose how consumers can get the details. Any conditions or limits on the guarantee or warranty (such as a time limit or a requirement that the consumer return the product) also must be clearly disclosed in the ad. Finally, the law requires companies to make copies of any warranties available to consumers before the sale. Pricing is another area of advertising that can receive scrutiny from regulators. One common practice is to offer a reduction from a former price. If the former price is the actual, bona fide price at which the vehicle was offered for sale for a reasonably substantial period of time, it provides a legitimate basis for the advertising of a price comparison. The “former” price should not be an artificial, inflated price established for the purpose of advertising a bargain “reduced” price. If the former price is not set forth in the ad, as when the ad merely states, “Sale,” the amount of the reduction must not be so insignificant as to be meaningless. For

instance, a claim that a vehicle has been “reduced to $9,999” when the former price was $10,000, is misleading the consumer. Advertising Credit and Leases Certain rules apply only to creditors and lessors. Keep the following principles in mind when you design or review an ad promoting consumer credit or consumer leases. All advertising disclosures must be printed “clearly and conspicuously.” That means disclosures must be legible and reasonably understandable. You may advertise only credit or lease terms that are actually available to the consumer. Bait and switch credit or lease promotions are not allowed. For example, no advertisement can state a specific installment payment or a specific down payment can be arranged unless the creditor is prepared to make those arrangements. You can, however, advertise terms that will be offered only for a limited time or terms that will become available at a known future date. You need not, of course, promote every credit or lease plan you offer. The main requirements governing advertising of closed-end credit concern “triggering terms” and “finance rates.” Those requirements may apply to a single ad. If you advertise closed-end credit with a “triggering term,” you also must disclose other major terms, including the annual percentage rate. This rule is intended to ensure that all important terms of a credit plan, not just the most attractive ones, appear in an ad. The triggering terms for closed-end credit are: The amount of the down payment, expressed as either a percentage or dollar amount, in a “credit sale” transaction. Examples: • “10 percent down” • “$1,000 down” • “90 percent financing” • “Trade-in with $1,000 appraised value required” C O N T I N U E D O N PA G E 8

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FBI Indicts Oklahoma Car Dealer

Federal Bureau of Investigation Press Release, June 7, 2012 OKLAHOMA CITY – John B. Langley, 62, of Harrah, Okla., has been indicted on charges of bank fraud and making a false statement to a federally insured credit union, Sanford C. Coats, United States Attorney for the Western District of Oklahoma, announced. According to the indictment, Langley owned and operated J&K Langley Corporation, which sold used cars in Oklahoma City under the name Bargain Network Auto Sales. Count one of the indictment alleges that during 2008 and 2009, Langley borrowed money from Municipal Employees Credit Union and pledged vehicles on his lot as collateral when he knew that those vehicles had been pledged to Floorplan Xpress, a financing company that specializes in lending money to car dealers. The indictment also alleges Langley defrauded the credit union by selling collateralized vehicles and failing to give the proceeds to the credit union to satisfy his loans. Count two alleges Langley engaged in similar fraudulent conduct in dealings with BancFirst. Count three charges Langley with making a false statement to Municipal Employees Credit Union on March 23, 2009, by giving the credit union a forged lien release letter – supposedly created by Floorplan Xpress – relating to a 2009 Nissan Maxima. Each of the three counts carries a potential penalty of 30 years in prison and a fine of $1 million, in addition to mandatory restitution. The charges are the result of an investigation conducted by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Scott E. Williams. The public is reminded that the indictment is merely an accusation and the defendant is presumed innocent unless and until proven guilty. Reference is made to the indictment and other public filings for further information. 7

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C O N T I N U E D F R O M PA G E 6

| Watch Your Advertising – Others Are

The amount of any payment, expressed as either a percentage or dollar amount. Examples: • “Monthly payments less than $250 on all our loan plans” • “Pay $23.44 per $1,000 borrowed” • “$210.95 per month” The number of payments or the period of repayment. Examples: • “Up to four years to pay” • “48 months to pay” • “30-year mortgages available” The amount of any finance charge. Examples: • “Financing costs less than $300 per year” • “Less than $1,200 interest” • “$2 monthly carrying charge” Some statements about credit terms are too general to trigger additional disclosures. Examples of terms that do not trigger the required disclosures are: • “No down payment” • “Easy monthly payments” • “Loans available at 5 percent below our standard APR” • “Low down payment accepted” • “Pay weekly” • “Terms to fit your budget” • “Financing available” General statements, such as “take years to pay” or “no closing costs,” do not trigger further disclosures because they do not state or suggest the period of repayment or the down payment cost. In contrast, the statement “drive it home for $199,” which implies that the required cash down payment is no more than $199, does trigger full disclosure. Similarly, a statement such as “up to 48 months to pay” lists the period of repayment and triggers disclosure. In general, the more specific the statement, the more likely it is to trigger additional disclosures. If your ad for closed-end credit uses a triggering term, it also must include the following information: • The amount or percentage of the down payment. • The terms of repayment. • The “annual percentage rate,” using that term or the abbreviation APR. If the annual percentage rate may be increased after consummation of the credit transaction, that fact also must be stated. The amount or percentage of the “down payment” need not be shown directly, as long as it can be determined from the ad. For example, “10 percent cash required from buyer” or “credit terms require

minimum $1,000 trade-in” would satisfy the disclosure requirement. The “terms of repayment” may be expressed in a variety of ways, as long as they convey the required information. For example, an automobile finance company might use unit cost to disclose repayment terms: “48 monthly payments of $23.44 for each $1,000 borrowed.” Similarly, the length of the loan can be expressed as the number of payments or the time period of the loan. Sample Disclosure: The following disclosure of car financing offered by the dealer would comply with the law if printed clearly and conspicuously: “Special close-out sale this weekend. Any in-stock Chevy Citation, only 5 percent down, 5.9 percent APR (on approved credit). Example: 48 monthly payments of $224.95.” The second basic requirement for advertising closed-end credit is, if your ad shows the finance charge as a rate, that rate must be stated as an “annual percentage rate,” using that term or the abbreviation APR. Your ad must state the annual percentage rate, even if it is the same as the simple interest rate. So if you are a car dealer who wants to advertise low-rate financing made available by the manufacturer, your advertisement would read, for example, “5.9 percent annual percentage rate” or “5.9 percent APR.” If you want to show only a rate, and the APR is stated in the ad, no other credit information need be included. The “triggering term” requirement does not apply because the rate and APR are not triggering terms. Your advertisements will be noticed and will undoubtedly draw a response from someone. Fair and truthful ads will be appreciated by consumers and will typically result in a positive response. Deceptive and misleading ads, however, will be noticed by the Used Motor Vehicle and Parts Commission and could result in a very negative response for your dealership. More in-depth guidance on preparing compliant advertising pieces is available on the Federal Trade Commission’s website, www.ftc.gov. Note: Neither OIADA or ADR of Oklahoma offers legal advice. This article was prepared for informational purposes only. For its applicability to your business, please consult your legal counsel.

IN THE INDUSTRY

Bright to Head Northwood Auto Marketing Program Elgie Bright has been named chairman of the Northwood University automotive marketing program, replacing Joe Lescota, who held the position since 2000. Lescota left the university in May to join NIADA as director of dealer development. Bright, a graduate of Adrian College who earned a Master’s degree from Northwood, has more than 20 years of experience in the automotive retail, original equipment manufacturer and aftermarket industry. Bright spent the past 12 years as a field district sales manager for General Motors, responsible for implementing market plans for assigned areas and meeting strategic growth initiatives. He also served as assistant manager for Art Moran Pontiac in Southfield, Mich., acting as liaison between the fixed operations department and General Motors. “His long experience in various aspects of the automotive industry and his passion for helping students learn will maintain the quality and excellence of our automotive programs,” Northwood Academic Dean Dr. Lance Lewis said.

BY ADR STAFF

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CONTINUING A TREND OF SOFTENING PRICES

Peer-to-Peer Software Allows Data Breach If your dealership maintains any sensitive or critical data on your computer network, you likely have a data security plan in place. Dealerships involved in the financing or leasing of vehicles are, in fact, required by federal regulation to have a data security plan. Part of that plan should include your policies on the installation and use of what is known as peer-to-peer (P2P) software. In a recently released complaint against a Georgia auto dealership, the Federal Trade Commission (FTC) charged that consumers’ personal information was compromised through P2P software installed on a computer connected to the company’s network. P2P technology is a way to share music, video and documents, play games, and facilitate online telephone conversations. The technology enables computers using the same or compatible P2P programs to form a network and share digital files directly with other computers on the network. Because virtually anyone can join a P2P network just by installing a particular software, millions of computers can be connected at one time. BearShare, Limewire, KaZaa, eMule, Vuze, uTorrent and BitTorrent are examples of P2P file-sharing programs.

When P2P file-sharing software is not configured properly, files not intended for sharing can be accessible to anyone on the P2P network. The FTC has been investigating data breaches related to P2P software for a number of years. In 2010, the FTC notified almost 100 organizations that personal information, including sensitive data about customers and/ or employees, had been shared from the organizations’ computer networks and was available on P2P file-sharing networks. Once the data is uploaded to a P2P network, it is available to anyone on that network and can readily be used to commit identity theft or fraud. And once uploaded to a P2P network, the data is virtually impossible to recover. Data compromised through P2P software is an issue the FTC takes very seriously. FTC chairman Jon Leibowitz said, “Companies should take a hard look at their systems to ensure that there are no unauthorized P2P filesharing programs and that authorized programs are properly configured and secure.” As the nation’s consumer protection agency, the FTC enforces laws that require companies in various industries to take reasonable and appropriate security measures to protect

BY OIADA STAFF

sensitive personal information, including the Gramm-Leach-Bliley Act and Section 5 of the FTC Act. Failure to prevent such information from being shared to a P2P network can violate such laws. If you don’t know whether any P2P software is installed on your dealership’s computers, find out. Be sure you have a written policy in place to deal with P2P software – and be sure you enforce it. Then, if your dealership has a privacy notice, review the data security statements in it. Those statements should accurately reflect the data security policies and procedures you actually have in place. For instance, if your privacy notice says “We maintain physical, electronic and procedural safeguards that comply with federal regulations to guard non-public personal information,” your data security plan, as well as your everyday practices, should support that. More information on privacy and security issues surrounding P2P technology can be found at the Business section of the FTC website, www.ftc.gov/bcp. The FTC’s business education brochure, titled “Peer-to-Peer File Sharing: A Guide for Business,” is available at www.ftc.gov/bcp/edu/pubs/business/idtheft/ bus46.shtm.

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A D D I T I O N A L A R T I C L E S R E L AT E D T O T H I S F T C A C T I O N A R E I N C L U D E D I N T H I S P U B L I C AT I O N . P L E A S E S E E “ O V E R V I E W O F T H E S A F E G U A R D S R U L E , ” “A L L E G E D P R I VA C Y N O T I C E V I O L AT I O N S , ” A N D “ P E E R - T O - P E E R S O F T WA R E A L L O W S D ATA B R E A C H . ”

FTC Charges Auto Dealer According to a recently released Federal Trade Commission (FTC) complaint, software installed on a computer at a Georgia dealership afforded unauthorized Internet access to the dealership’s network and allowed the personal private information of 95,000 consumers to be compromised. The ensuing investigation resulted in the FTC’s first actions charging an auto dealer with violations of the Gramm-Leach-Bliley (GLB) Act. The complaint also alleges violations of Section 5(a) of the FTC Act. The settlement agreement proposed by the FTC does not offer the dealership an opportunity to pay a monetary fine and move on. Instead, as has been the FTC’s practice in other settlements, the proposed settlement levies the company with a multitude of security program implementations and reporting requirements, most of which continue for 20 years. Section 5(a) of the FTC Act empowers the FTC to enforce unfair and deceptive acts or practices (UDAP) involving commerce. The GLB Act is commonly referred to as the Privacy Act because it includes provisions for protection of consumers’ personal private financial information. This particular GLB Act protection for consumers is implemented through the FTC’s Privacy Rule and Safeguards Rule and applies to financial institutions. The Privacy Rule focuses on privacy notices, opt-out rights and limits on use and disclosure. The Safeguards Rule focuses on data security. The FTC alleges the dealership – which sells and leases cars and provides financing – violated certain provisions of those rules as well as the UDAP Section of the FTC Act. Specifically, the FTC charged that auto dealer Franklin’s Budget Car Sales, Inc., also known as Franklin Toyota/Scion, of Statesboro, Ga., compromised consumers’ personal information by allowing peer-topeer (P2P) software to be installed on its network, which allowed sensitive financial information for 95,000 consumers to be uploaded to the P2P network. The information included names, addresses, Social Security numbers, birthdates and driver’s license numbers. The UDAP charges were based on statements included in the dealership’s privacy notice. According to the FTC, Franklin’s privacy policy said, “We restrict

access to nonpublic personal information about you to only those employees who need to know that information to provide products and services to you. We maintain physical, electronic and procedural safeguards that comply with federal regulation to guard nonpublic personal information.” The FTC alleges Franklin “in truth and in fact … did not implement reasonable and appropriate measures to protect consumers’ personal information from unauthorized access. Therefore, the representation set forth … was, and is, false or misleading.” With respect to the alleged violations of the Safeguards Rule, the agency charged that Franklin failed to assess the risks to the consumer information it collected and stored online and failed to adopt policies to prevent or limit unauthorized disclosure of the information. It also allegedly failed to prevent, detect and investigate unauthorized access to personal information on its networks, failed to adequately train employees and failed to employ reasonable measures to respond to unauthorized access to personal information. With respect to the alleged Privacy Rule violations, the agency charged that Franklin failed to provide annual privacy notices. The FTC further alleged the dealership failed to provide a mechanism by which consumers could opt out of informationsharing with third parties. The FTC’s proposed settlement order levies an extensive, detailed and long-lasting set of requirements on the dealership, which would: • Be prohibited from misrepresenting its practices regarding consumer data. • Be prohibited from violating any provision of the Safeguards and Privacy Rules. • Establish, implement and maintain a written, comprehensive information security program. The program would include the designation of employees responsible for oversight of the program, identification of material risks, regular testing of the effectiveness of key procedures, requiring service providers to maintain appropriate safeguards, periodic evaluations and adjustments of the security program. • Obtain initial and biennial assessments and reports prepared by independent third-party certified professionals.

Biennial reports would continue for a period of 20 years. Assessments would document specific safeguards for the period, explain how such safeguards are appropriate for the dealership, explain how the safeguards meet or exceed the required protections and certify the security program is operating effectively. • Maintain – and make available to the FTC – for a period of five years, a print or electronic copy of each document relating to compliance, including any documents that contradict the dealership’s compliance with the order. • Maintain – and make available to the FTC – for a period of three years, all material used in preparation of each biennial assessment. • For a period of five years from the date of the order, deliver a copy of the order to certain principals, officers, directors, managers, employees and related business entities. • Notify the FTC prior to any dissolution, assignment, sale, merger or other action that would result in the emergence of a successor company, as well as prior to the proposed filing of a bankruptcy petition. • Within 60 days after the date of service of the order, provide the FTC a written report detailing the manner and form of its compliance with the order. Thereafter, the company would submit additional written reports within 10 days after the receipt of a written request from the FTC. As proposed, the settlement order would remain in effect for 20 years. If an order is issued on a final basis, each violation could result in a civil penalty of up to $16,000. At press time, the settlement order was open for public comment through July 9. FTC note: The commission issues an administrative complaint when it has “reason to believe” the law has been or is being violated, and it appears to the commission a proceeding is in the public interest. The complaint is not a finding or ruling that the respondent has actually violated the law. A consent order is for settlement purposes only and does not constitute an admission by the respondent that the law has been violated. When the commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.

BY OIADA STAFF

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INDUSTRY

CORNER

Alleged Privacy Notice Violations Overview of the Safeguards Rule A Georgia dealership named in a recent Federal Trade Commission (FTC) complaint engages in the sale and financing of vehicles as well as the leasing of vehicles. Consequently, that dealership is subject to various provisions of both the FTC Act and the Privacy Rule. The dealership had a privacy notice, but the FTC referenced the failure to send, the format and the language when listing the charges. For background, the FTC Act, among other things, grants the FTC authority to regulate and enforce unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce. The Privacy Rule is a regulation concerned with the collection and safekeeping of consumers’ personal private information. It derives from the Gramm-Leach-Bliley Act, often referred to as the Privacy Act. The FTC’s Privacy Rule requires financial institutions to provide the customer written notice of the kinds of information they collect, what they use it for, who they share it with and how they protect it. The rule further requires the institution to provide the customer an option to restrict sharing that information in some cases. The Georgia dealership allegedly failed to send annual privacy notices to its customers. The Privacy Rule includes provisions for both initial notices and annual notices. An initial notice must be provided to: Customer: An individual who becomes your customer, not later than when you establish a customer relationship. Consumer: A consumer, before you disclose any nonpublic personal information about the consumer to any nonaffiliated third party other than as prescribed by law. An annual notice must be provided not less than annually during the continuation of the customer relationship. The FTC complaint also says the company failed to provide a mechanism by which consumers could opt out of information-sharing with nonaffiliated third parties, as required by the Privacy Rule. A common mechanism for providing an information-sharing opt out is the company’s privacy notice. The FTC has published model forms and detailed guidelines for the preparation of privacy notices. A company whose privacy notice is prepared in strict accordance with the model forms and guidelines is guaranteed a safe harbor defense as to the format of the notice. The Georgia dealership’s privacy notice, as exhibited in the complaint, does not adhere to the format of the model privacy notice forms published by the FTC. Irrespective of format, the content of the privacy notice must accurately reflect a company’s privacy and data security policies and practices. The dealership’s privacy notice included the following statements: “We restrict access to nonpublic personal information about you to only those employees who need to know that information to provide products and services to you. We maintain physical, electronic and procedural safeguards that comply with federal regulations to guard nonpublic personal information.” In the complaint, however, the FTC noted: “In truth and in fact, respondent did not implement reasonable and appropriate measures to protect consumers’ personal information from unauthorized access. Therefore, the representation set forth … was, and is, false or misleading”, thereby violating the FTC Act’s prohibitions of unfair or deceptive acts or practices. It bears repeating – the content of the privacy notice must accurately reflect a company’s privacy and data security policies and practices. In FTC commentary related to a separate privacy case, all financial institutions are encouraged to “review your privacy policy and double-check that what you promise – expressly or by implication – comports with your day-today practices. Like any other claim, what you say about how you handle information has to be truthful and backed up with solid proof… Simply put, promise only what you know for a fact you deliver.” If your dealership extends credit, arranges for or brokers credit, or leases vehicles on a non-operating basis, you are likely subject to the Privacy Rule and should be providing privacy notices in accordance with the rule. Privacy notices conforming to the FTC model forms are available through OIADA, your state association. The notices will be customized specifically for your dealership to reflect your stated policies and practices. If you have questions or would like more information, please contact the OIADA office at 405-232-2947 or 800-346-4232. Note: We are not attorneys. This article was prepared for informational purposes only. It has been made available with the understanding that neither ADR of Oklahoma nor OIADA is engaged in rendering legal advice. You are urged to contact legal counsel for its application to your operation.

The Safeguards Rule is one of several federal regulations concerned with the protection and safekeeping of consumers’ personal private information. Like the Privacy Rule, the Safeguards Rule derives from the Gramm-Leach-Bliley Act (GLB), often referred to as the Privacy Act. As implemented by the Federal Trade Commission (FTC), the Safeguards Rule is concerned with the physical security of privacy information. It requires financial institutions to develop, implement and maintain a comprehensive information security program. The program must be in written format and must contain administrative, technical and physical safeguards appropriate to the business. For purposes of the GLB, a “financial institution” includes businesses – such as car dealers – involved in the extension of credit or in activities related to the extension of credit, or that are involved in leasing vehicles. A Georgia dealership recently charged with violating the FTC’s Safeguards Rule allegedly “failed to implement reasonable security policies and procedures” by: • Failing to identify reasonably foreseeable internal and external risks to the security, confidentiality and integrity of customer information. • Failing to design and implement information safeguards to control the risks to customer information and failing to regularly test and monitor them. • Failing to investigate, evaluate and adjust the information security program in light of known or identified risks. • Failing to develop, implement and maintain a comprehensive written information security program. • Failing to designate an employee to coordinate the company’s information security program. The stated objective of the Safeguards Rule is to protect consumers’ private information by requiring certain businesses to develop safeguards plans. If your dealership meets the definition of a “financial institution” – for example, if you lease cars or if you are involved in the financing of vehicles you sell – you are subject to the Safeguards Rule and are required to implement a safeguards plan. The objective of your safeguards plan is to define and document your dealership’s procedures for safeguarding, or physically securing and protecting, consumers’ personal private information. At a minimum, your safeguards plan will document: • The personal identifying information you collect. • How it is collected. • Where it is stored and how it is safeguarded while it is “active” – while the sale is in process. • Where it is stored and how it is safeguarded on a permanent basis. • How long the data is retained. • How the data is handled for disposal. • Employee security training and certifications. • Security threat and incident response plan. Your goal when preparing your safeguards plan is to develop a viable, workable set of written procedures that, when implemented, adequately secure the personal information you are privileged to access and ultimately afford your customers the privacy they are guaranteed under federal law. If you have questions about developing a safeguards plan for your dealership, please contact the OIADA staff at 405-232-2947 or 800346-4232. Note: We are not attorneys. This article was prepared for informational purposes only. It has been made available with the understanding that neither ADR of Oklahoma nor OIADA is engaged in rendering legal advice. You are urged to contact legal counsel for its application to your operation.

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IN THE KNOW

Used Motor Vehicle and Parts Commission Report Acting chairman Steve Ross convened the June 12 session of the Used Motor Vehicle and Parts Commission. Following roll call and approval of the May 8 meeting minutes, Ross called on director John Maile for the director’s report. Maile called the commissioners’ attention to the expenditure report, which was included in the agenda packet. Then Maile reported that terms of four of the commissioners’ positions were up for appointment or reappointment and that one position had been vacated. All five were appointed or reappointed in the last month of the legislative session. John Holt of John Holt Chevrolet in Chickasha was appointed to complete the term of Roy Burch who, for health reasons, resigned this year. Terry Shreve of Shreve Truck and Equipment Sales of Barnsdall, Kerry Siegfried of Siegfried Motor Company from Broken Arrow, Steve Ross of Universal Manufactured Homes in Oklahoma City and Jim Davis of Rainbow Auto Salvage and Garage in Holdenville were reappointed for full six-year terms. Maile advised the commissioners that work had begun on the budget for Fiscal Year 2013. The budget timing is inconvenient because the staff doesn’t get budget forms until the legislative session is complete, and then the budget must be submitted by the end of July. Consequently, the UMVPC budget is a work in progress and a completed copy is not available for review at this time. Maile, however, provided a brief overview. The budget for 2012 was $840,000 with a substantial portion of that allocated as data processing expense. Not all of what was budgeted for that category was spent. The budget was fairly accurate in all other areas. The budget for the next year will include a new investigator. The search for an individual to fill that position is ready to begin. Staff will be more efficiently allocated if the new investigator works from the Oklahoma City office, but the position could be filled in Tulsa. Revenue for the year has been down because of the economy. The two factors affecting the revenue decline were the decrease in salvage pool fees and the reduction in fines that were assessed. The fines are not included in the budget process – the commission staff does not want to rely on those fees for budgeted expenses. With regard to the reduction in fines, Maile said dealers were being more diligent because word had gotten to them that failure to follow the law and rules can cost them. The director also told the commissioners that staff has been talking with the state auditor’s office about the audit that agency is to perform for the commission. The state auditor performs what is called a performance audit, which is required by state law. Maile said the audit will likely highlight the fact that the commission does not have the division of duties required by the state auditor. The last audit was in mid-2008. The audit will cost the commission a little more than $10,000. That expense is included in the budget for next fiscal year. Following a vote affirming receipt and approval of the expenditures report, acting chairman Ross called on deputy director Kenneth Whitehead for his report. Whitehead reported there were two informal hearings that resulted in fines for violations. Sofi’s Motors of Oklahoma City was fined $500 for displaying from an unlicensed location and Blackwood Motors of Wellston was fined $300 for advertising violations. Both dealers are also required to attend the education program. In District Court action, injunctions were granted against Mike Kaiser of Coal County and Ronald David, Jr. of Tulsa County. Whitehead’s written report indicated commission staff had issued 14 cease and desist letters and completed 22 inspections during the period. Staff also handled 31 written complaints: five title issues, eleven having to do with contract violations, nine related to mechanical issues and six complaints of a miscellaneous nature. The education program had 19 in attendance. Applicants for a new license and dealers involved in significant rule violations are required to attend the commission’s education program as a part of acquiring or maintaining a state license. The education sessions are held at the commission conference room at 2401 NW 23, Oklahoma City.

Classes are held on Monday prior to the commission meeting on the second Tuesday of each month. The sessions run from 9 a.m. to about noon or 1 p.m. You are asked to make reservations so staff can be prepared to accommodate you. Call the commission at 405-521-3600 to make reservations. Maile announced that staff has adopted a policy change that will affect dealers who are prone to having an inordinate number of complaints lodged against them each month. The new policy is designed to encourage such dealerships to reduce the number of customer complaints in order to avoid being required to appear before the commission to explain why those complaints continue.

REPORT OF CEASE AND DESIST LETTERS ISSUED

These letters direct the individual or business to cease violations of laws or rules ENTITY Roy M. Achong James Beugess Benjamin Bortey Bill Enlow Homer T. Farrill Hector Gutierrez Paul Heritage Thal Everette Liggins Juan Morales Barry Parsley Barry Parsley Billy Sprouse Billy Sprouse Jeff White

TYPE OF VIOLATION Used Dealer Used Dealer Insurance Pool Used Dealer Insurance Pool Insurance Pool Used Dealer Used Dealer Insurance Pool Rebuilder Used Dealer Rebuilder Used Dealer Used Dealer

CITY Oklahoma City Kingston Oklahoma City Sapulpa Stratford Tulsa Sapulpa Chickasha Oklahoma City Ardmore Ardmore Calera Calera Lawton

DATE ISSUED 05/03/2012 05/07/2012 05/14/2012 05/15/2012 05/01/2012 05/10/2012 05/21/2012 05/14/2012 05/04/2012 05/30/2012 05/30/2012 05/03/2012 05/03/2012 05/25/2012

CLOSED COMPLAINT REPORT

These are complaints that have been resolved one way or another. They do not necessarily reflect any wrongdoing on the part of dealers. ENTITY Ada Ford-Lincoln, Inc. Automax Hyundai Big Red Sports/Imports Carsmart Cavco Industries, Inc. Competition Auto Sales David Stanley Chevrolet, Inc. David Stanley Chevrolet, Inc. David Stanley Chevrolet, Inc. David Stanley Chevrolet, Inc. David Stanley Chevrolet, Inc. David Stanley Dodge, LLC Dealer One Auto Credit, Inc. Diffee Ford-Lincoln-Mercury, Inc. Eldorado Motors, LLC #1 Everybody Drives Auto Sales, LLC Jason Moery Motors, LLC Jim Nichols Motor Company, Inc. Joe Watt Auto Sales, Inc. Magic Auto Repair & Sales Mike Mowdy Autoplex New A & B Auto Sales New A & B Auto Sales Norris Auto Sales & Service, LLC #2 R & S Truck & Auto Sales Riverside Auto Salvage Sal’s Auto Sales, LLC Shields Credit Connection Auto Inc. Tycoon Motorsports, LLC United Cars Young Auto Sales

CITY Ada Del City Norman Oklahoma City Seguin Tulsa Oklahoma City Oklahoma City Oklahoma City Oklahoma City Oklahoma City Midwest City Oklahoma City El Reno Oklahoma City Miami Shawnee Oklahoma City Vinita Oklahoma City Midwest City Sapulpa Sapulpa Oklahoma City Vinita Oklahoma City Warr Acres Oklahoma City Kingston Oklahoma City Midwest City

COMPLAINT Miscellaneous Contract Mechanical Title Miscellaneous Mechanical Contract Miscellaneous Contract Contract Contract Contract Contract Title Mechanical Mechanical Mechanical Contract Contract Mechanical Contract Title Title Contract Mechanical Miscellaneous Mechanical Title Mechanical Miscellaneous Miscellaneous

RESOLVED 05/31/2012 05/11/2012 05/07/2012 05/21/2012 05/17/2012 05/07/2012 05/29/2012 05/25/2012 05/01/2012 05/10/2012 05/29/2012 05/01/2012 05/08/2012 05/17/2012 05/01/2012 05/07/2012 05/29/2012 05/11/2012 05/14/2012 05/10/2012 05/01/2012 05/25/2012 05/07/2012 05/11/2012 05/07/2012 05/01/2012 05/01/2012 05/30/2012 05/07/2012 05/22/2012 05/04/2012

LICENSES SUSPENDED OR ABANDONED

In other action, the following licenses were suspended or abandoned: BUSINESS NAME Best Buy Car Dealership B & G Wholesale Autos Car Hop #2 D & J Used Cars & Trucks FASR Auto Sales, LLC J & E Performance Motors, LLC Lobos Auto Sales M & M Auto Center, Inc. Speedline Auto Center II, LLC

LOT CITY Oklahoma City Tulsa Oklahoma City Thackerville Yukon Stillwater Tulsa Ada Tulsa

REASON Out of business per Investigator’s report Out of business; phone disconnected Out of business per Annette Rumreich Out of business per owner David Morton Out of business; applied for retail license Out of business per owner Joshua English Out of business per owner Abed El Kour Out of business per owner Mari Plumlee Out of business per owner Steve Adams

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OIADA REPORT

OIADA Legislative Tracking Report 05/30/2012

The second session of the 53rd Oklahoma Legislature has adjourned. The following is OIADA’s final bill tracker, which contains all legislative measures (dead and alive) and the legislative week in review for this session. The governor has 10 days post sine die adjournment to sign or veto bills. If she takes no action, they automatically become law. 

HB 1222, McCullough, Sykes Directs the OK Motor Vehicle Commission to provide a dealer license for powersports vehicle dealers; the license will only allow the sale of a specific type of powersports vehicles of the same manufacturer as requested. Bill History 05-25-12 S Dead pursuant to the rules

HB 1743, Johnson, Sykes Empowers the Corporation Commission to supervise, govern and control wrecker fees, tariffs, and rates for transporting and storing vehicles removed in a nonconsent tow; empowers the Commission to set fees and charges; EMERGENCY. Bill History 05-19-11 S Laid out for consideration in the Senate 05-19-11 S Senate accepted the conference report 05-19-11 S Senate finally passed conference bill (Vote: Y: 44/N: 0) 05-20-11 G Sent to the Governor 05-26-11 G Signed by the Governor

On behalf of the association membership, the OIADA board wishes to extend its appreciation to our legislative liaison, Ms. Jami Longacre, for her diligence in tracking these bills through the most recent session and for continually monitoring the interests of our Oklahoma state dealers. We especially wish to recognize her efforts preventing passage of two particular pieces of legislation. The first, a proposed amendment to SB 2374, was language requiring extensive disclosure of vehicle damage, whether the damage could be known to the dealer or not, and would have subjected dealers to fraud charges for failure to comply. The second, SB 201, would have allowed local municipalities, counties or the Department of Public Safety to place holds on the registration renewal of motor vehicles associated with violations. That bill was resurrected on the last day of the session and was being pushed for passage. Ms. Longacre caught it and it was stopped. Thank you, Jami!

HB 1230, Ownbey, Mazzei Allows the transfer of the title of a salvage or junk vehicle when requested by the insurer to be processed as one transaction; sets the fee of such transfer at $22, of which $2 will be deposited in the OTC Reimbursement Fund. Bill History 05-19-11 S Laid out for consideration in the Senate 05-19-11 S Senate accepted the conference report 05-19-11 S Senate finally passed conference bill (Vote: Y: 44/N: 0) 05-20-11 G Sent to the Governor 05-26-11 G Vetoed by the Governor: “This change would weaken the law designed to prevent appointments arising from nepotism instead of merit.” HB 1260, Rousselot Establishes the Motor Vehicle Analysis Act. Bill History 03-02-12 H Dead pursuant to the rules

HB 2100, Terrill Creates the “Oklahoma Motor Vehicles Act of 2011”. Bill History 03-02-12 H Dead pursuant to the rules

HB 1064, Lockhart Repeals sections of law regarding registration and the excise tax exemptions for vessels and motors. EMERGENCY. Bill History 03-02-12 H Dead pursuant to the rules

HB 1295, Derby Any driver that causes an accident that does not comply with the Compulsory Insurance Law will have their vehicle towed home and placed in a tire boot until the time the accident is paid in full and the driver has insurance. Bill History 03-02-12 H Dead pursuant to the rules

HB 2129, Steele Specifies that an employee in violation of the Workers’ Compensation Act can be reinstated to their former position. Bill History 03-02-12 H Dead pursuant to the rules

HB 1087, Bennett, Allen Relates to motor vehicle size restrictions; limits size load; provides oversize annual permits and sets annual fee. EMERGENCY. Bill History 03-16-12 H Dead pursuant to the rules HB 1201, Inman Requires any seller of a motor vehicle to disclose in writing to the buyer all warranty repairs, modifications or other warranty work performed on the motor vehicle. Bill History 03-02-12 H Dead pursuant to the rules HB 1207, Murphey, Sykes Creates the Oklahoma Innovation, Efficiency and Accountability Act of 2011; requires each state agency to utilize the Portal System that allows for a link to a web-based application for any license or permit issued. Bill History 05-19-11 S Laid out for consideration in the Senate 05-19-11 S Senate accepted the conference report 05-19-11 S Senate finally passed conference bill (Vote: Y: 47/N: 0) 05-20-11 G Sent to the Governor 05-26-11 G Signed by the Governor

HB 1476, Armes, Anderson Includes recreational off-highway vehicle with the requirements for all-terrain vehicles. Bill History 03-16-12 H Dead pursuant to the rules HB 1485, Roberts, Dustin; Schulz Directs the Commissioner of Public Safety to negotiate an agreement that would allow agricultural producers to subject themselves to the motor vehicle laws of their residing state when within 150 miles of their residence. Bill History 04-05-12 S Dead pursuant to the rules HB 1536, Blackwell Removes the limit on discounts or credits for tradein vehicles as prescribed by the Oklahoma Tax Commission. EMERGENCY. Bill History 03-02-12 H Dead pursuant to the rules HB 1596, Martin, Steve Broadens acceptable documentation of legal residency for vehicle owners. Bill History 03-02-12 H Dead pursuant to the rules

HB 1761, Nelson Creates the “Motor Vehicle Records Act of 2011”. Bill History 03-02-12 H Dead pursuant to the rules HB 1908, Jackson, Aldridge Eliminates the reduction of fees for online registration renewals for motor vehicle registration; EMERGENCY. Bill History 03-16-12 H Dead pursuant to the rules

HB 2135, Steele, Myers Allows local ordinances to address issues related to smoking; removes legislative intent from the Smoking in Public Places & Indoor Workplaces Act. Bill History 03-16-12 H Dead pursuant to the rules HB 2140, Steele, Bingman Consolidates various agencies including DCS, Personnel Management, Benefits Council, the State and Ed. Employees Group Insurance Board into the Office of State Finance; the structures will be maintained until provided by law General Remarks: Agency Consolidation  Bill History 05-20-11 S Bingman closes debate saying that every agency consolidated will still have their own organization and OSF will help realize more efficiencies. 05-20-11 S Bingman says that as far as insurance goes, the systems will still offer options and he urges support. 05-20-11 S Passed/Adopted (Vote: Y: 32/N: 13) 05-20-11 G Sent to the Governor 05-24-11 G Signed by the Governor

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C O N T I N U E D F R O M PA G E 1 6

HB 2242, Denney, Halligan The license fee of a wrecker or tow vehicle to be based on the gross weight of the wrecker or tow vehicle alone without inclusion of weight towed by the vehicle; provides exception for applications. Bill History 05-24-12 S Laid out for consideration in the Senate 05-24-12 S Senate accepted the conference report 05-24-12 S Passed/Adopted (Vote: Y: 40/N: 0) 05-25-12 G Sent to the Governor 05-29-12 G Signed by the Governor HB 2274, Murphey Adds a vehicle’s average trade-in value according to the National Auto Dealers Association to the formula for figuring out a vehicle’s excise tax. EMERGENCY. Bill History 03-02-12 H Dead pursuant to the rules HB 2291, Roberts, Dustin Creates the “Oklahoma Motor Vehicle Inspection Act”; sets guidelines for vehicles that require inspections; sets guidelines for inspection stations and licensing. Bill History 03-02-12 H Dead pursuant to the rules HB 2374, Tibbs, Sykes Exempts vehicles towed by a licensed wrecker operator from confiscation by any law enforcement officer. Bill History 05-02-12 H Laid out for consideration in the House 05-02-12 H House concurred in Senate amendments 05-02-12 H Passed/Adopted (Vote: Y: 93/N: 0) 05-03-12 G Sent to the Governor 05-08-12 G Signed by the Governor HB 2418, Enns, Russell Makes it unlawful for any person licensed to sell, trade, or transfer from or to Oklahoma residents certain vehicles unless they have a handle mounted above the driver side door to be used for entering and exiting the vehicle. Bill History 03-16-12 H Dead pursuant to the rules HB 2467, Stiles, Shortey Exempts individual licensing processes from the One-Stop Business Licensing Program; exemptions will not be granted on an agency-by-agency basis and will be renewed on an annual basis. Bill History 04-05-12 S Dead pursuant to the rules HB 2542, McCullough Updates language to include powersports vehicles and adds multiple definitions that relate to motored vehicles and licensing thereof. Bill History 03-02-12 H Dead pursuant to the rules HB 2575, Ownbey, Holt Modifies how to obtain a salvage or junk title; Defines fee; Defines how to obtain a salvage title; EMERGENCY. Bill History 04-19-12 S Holt introduces amendment to restore title 04-19-12 S Title restored 04-19-12 S Passed/Adopted (Vote: Y: 40/N: 0) 04-23-12 G Sent to the Governor 04-27-12 G Signed by the Governor

HB 2688, Banz Modifies the renewal of driver licenses and identification cards. Bill History 03-02-12 H Dead pursuant to the rules HB 2705, Vaughan Creates Oklahoma Used Motor Vehicle Education and Recovery Commission; Provides appointments of board requirements, payments, terms, hiring, powers, reports, and duties; Amends licensing. EMERGENCY. Bill History 03-02-12 H Dead pursuant to the rules HB 2706, Vaughan Creates requirements for out-of-state licensed dealers including registering, not being denied a license in the past, and has paid all fees. EMERGENCY. Bill History 03-02-12 H Dead pursuant to the rules HB 2711, Jackson Defines terms; adds resident broker; each applicant for a resident broker’s license shall procure and file with the Commission a good and sufficient bond in the amount of $25,000. Bill History 03-16-12 H Dead pursuant to the rules HB 2775, Stiles Creates the Motor Vehicles Act of 2012. Bill History 03-16-12 H Dead pursuant to the rules HB 2845, Ownbey Amends existing legislation related to motor vehicles and security interests; providing lien release alternatives and defines terms. Bill History 03-02-12 H Dead pursuant to the rules HB 2860, Hoskin Creates the “Employee Credit Privacy Act”; prohibits an employer from using credit reports or history for hiring criteria with certain exceptions; see exceptions; sets legal guidelines for civil remedies. Bill History 03-02-12 H Dead pursuant to the rules HB 2961, Christian Creates a new section of law to be cited as the Oklahoma Motor Vehicles Act of 2012. Bill History 03-02-12 H Dead pursuant to the rules HB 3007, Terrill Changes the definition of autonomous vehicles to include those with artificial intelligence that drives itself without active human operation; directs the Department of Public Safety to adopt rules authorizing their operation. Bill History 03-02-12 H Dead pursuant to the rules HB 3117, Hickman, Anderson Authorizes the creation of the Oklahoma Energy License Plate. Bill History 03-16-12 H Dead pursuant to the rules

SB 189, Aldridge, Faught Limits the maximum amount of damages a plaintiff or claimant can receive if either is not in compliance with the Compulsory Insurance Law; removes awards for pain and suffering except in select cases. Bill History 04-27-12 H Dead pursuant to the rules SB 197, Aldridge, Banz Lowers fee for motor vehicle transfer from $10 to $5; Changes wording from ‘may’ to ‘shall’. Bill History 03-16-12 S Dead pursuant to the rules SB 199, Aldridge Eliminates the option of vehicle owners to choose the Oklahoma Tax Commission as their preferred place of license and registration renewal online. Bill History 02-28-12 S Dead pursuant to the rules ****SB 201, Aldridge, Nelson Allows local municipalities, counties, or the Department of Public Safety to place holds on the registration renewal for motor vehicles associated with violations; Allows fees to be collected by motor license agents. Bill History 05-04-12 H Referred to House Committee on House Conf. Comm. on Public Safety and Jud. 05-23-12 S Referred to Senate Committee Senate GCCA 05-23-12 S Meeting set for 11:00 a.m., Room 419C, State Capitol, Senate GCCA 05-23-12 S Conferees unable to agree ****05-25-12 S Dead pursuant to the rules NOTE: THIS BILL WAS RESURRECTED ON THE LAST DAY OF THE SESSION – WAS BEING PUSHED FOR PASSAGE – JAMI LONGACRE CAUGHT IT AND IT WAS STOPPED! – WE APPRECIATE HER VERY MUCH!! SB 215, Adelson A new law creating the Oklahoma Motor Vehicle Inspection Act. Requires annual inspections of all motor vehicles; Prohibits the operation of unsafe motor vehicles; Confers authority upon the Commissioner of Public Safety to supervise. Bill History 02-28-12 S Dead pursuant to the rules SB 272, Aldridge, Armes Limits the amount of recoverable damages arising out of an accident involving the operation of a motor vehicle or for any claim against the motor vehicle liability insurance; damages will not include awards for pain and suffering. Bill History 05-19-11 H House accepted the conference report 05-19-11 H Grau and Morrissette debate in opposition to the bill; Faught debates in favor of the bill. 05-19-11 H House finally passed conference bill (Vote: Y: 71/N: 25) 05-20-11 G Sent to the Governor 05-26-11 G Signed by the Governor C O N T I N U E D O N PA G E 2 0

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SB 38, Jolley, Schwartz Amends the Oklahoma Vehicle License and Registration Act to include “rebodied vehicles.” Bill History 04-21-11 H Set on the House Floor Agenda 04-21-11 H Laid out for consideration in the House 04-21-11 H Passed/Adopted (Vote: Y: 91/N: 1) 04-26-11 G Sent to the Governor 05-02-11 G Signed by the Governor

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C O N T I N U E D F R O M PA G E 1 8

SB 303, Ivester Allows officers in the Department of Public Safety or other law enforcement officers to have financial interest in wrecker or towing services provided that they disclose the information to their supervisor; EMERGENCY. Bill History 02-28-12 S Dead pursuant to the rules SB 321, Sparks Adds “during any time” to the date requirements for releasing liens. Bill History 02-28-12 S Dead pursuant to the rules SB 342, Shortey Makes section of law regarding authorized car vendors place of business gender neutral. Bill History 03-02-12 S Dead pursuant to the rules SB 343, Johnson, Rob Directs the Oklahoma Tax Commission to implement a pilot program for an electronic, print on-demand, temporary license plate issuance system for use by motor vehicle dealers. Bill History 02-28-12 S Dead pursuant to the rules SB 392, Jolley, Cooksey Adds that individuals who were affected by the June 14, 2010 floods may be eligible for the following credits: vehicle registration fees, income tax, and excise tax. EMERGENCY. Bill History 04-27-12 H Dead pursuant to the rules

SB 448, Barrington, Billy Modifies definitions and license requirements for commercial motor vehicles transporting empty storage container tanks; provides exceptions; Requires medical examinations of drivers; Bans texting while driving. EMERGENCY. Bill History 05-01-12 S Laid out for consideration in the Senate 05-01-12 S Senate concurred in House amendments 05-01-12 S Passed/Adopted (Vote: Y: 42/N: 0) 05-02-12 G Sent to the Governor 05-08-12 G Signed by the Governor SB 462, Bingman Specifies which sections of the title deal with motor vehicles. Bill History 02-28-12 S Dead pursuant to the rules SB 463, Bingman Specifies which sections of the title deal with motor vehicles. Bill History 02-28-12 S Dead pursuant to the rules SB 506, Burrage Creates the “Recreational Vehicle Franchise Act”; outlines protocol for recreational vehicle manufacturers, distributors, dealers, representatives, salespersons and warrantors; includes rights of each group and defines all relevant terms. Bill History 02-28-12 S Dead pursuant to the rules

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SB 729, Mazzei, Dank Allows fifty cents of the one dollar per day penalty for late motor vehicle registration to be apportioned to the General Revenue Fund for the fiscal year ending June 30, 2012. Bill History 05-19-11 H Reconsider motion passed 53-31 05-19-11 H House finally passed conference bill (Vote: Y: 51/N: 35) 05-19-11 H Emergency failed (Vote: Y: 45/N: 35) 05-20-11 G Sent to the Governor 05-26-11 G Signed by the Governor SB 772, Jolley, Murphey Creates the Business and Professional License Facilitation Task Force to study the existing governmental models of states that have a central contact point or agency facilitating professional licenses and applications. Bill History 05-19-11 H House accepted the conference report (Vote: Y: 37/N: 10) 05-19-11 H House finally passed conference bill (Vote: Y: 74/N: 20) 05-19-11 H Emergency failed (Vote: Y: 61/N: 35) 05-20-11 G Sent to the Governor 05-24-11 G Signed by the Governor SB 785, Aldridge; Martin, Steve Eliminates the requirement of additional release from the registered vehicle owner when an insurer has determined the vehicle to be a total loss. Bill History 04-13-12 H Dead pursuant to the rules SB 890, Crain Any order affecting land titles will include the full name of all parties; failure to provide names will not affect the title. Bill History 02-28-12 S Dead pursuant to the rules SB 902, Marlatt, Sanders Mandates that the state will regulate and license recreational vehicle manufacturers, distributors, dealers, and salespersons. Bill History 05-11-11 S Senate concurred in House amendments 05-11-11 S Passed/Adopted (Vote: Y: 46/N: 0) 05-13-11 S Set on the Senate Floor Agenda 05-12-11 G Sent to the Governor 05-18-11 G Signed by the Governor SB 929, Newberry, Sullivan Creates a task force to study the potential for consolidation of licensing functions for professional and trade occupations. Bill History 05-25-12 S Dead pursuant to the rules SB 968, Johnson, Rob Requires a motor vehicle license agent issuing a certificate of title to inquire whether the applicant chooses to make a voluntary $1.00 contribution to the Oklahoma Sports Eye Safety Program Revolving Fund. Bill History 02-28-12 S Dead pursuant to the rules SB 1021, Ellis Exempts the portion of gross receipts or gross proceeds that come from the sale of automobile parts that are core charges meant to secure a tradein from the Oklahoma Sales Tax Code; does not apply to non-trade-ins. Bill History 02-28-12 S Dead pursuant to the rules

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SB 1024, Laster Removes the requirement that the value of a tradein vehicle prior to the subtraction of discounts and credits be within 20 percent of average retail price in regards to the motor vehicle excise tax. Bill History 02-28-12 S Dead pursuant to the rules SB 1067, Barrington, Roan Authorizes officers of the Department of Public Safety or any other political subdivision to tow any vehicle found on a public place or upon any private road that provides access to single or multi-family dwellings. Bill History 05-25-12 S Dead pursuant to the rules SB 1099, Wilson Increases the required bond amount for used motor vehicle auction licenses from $50,000 to $300,000; allows dealers with proof of check and title insurance in the amount of $300,000 to have a bond of $150,000; EMERGENCY. Bill History 02-28-12 S Dead pursuant to the rules SB 1106, Ballenger, Nelson Creates written hold order requirements; not to exceed thirty days; out-of-state dealers will be subject to jurisdiction per transaction of one hundred dollars or more. Bill History 04-13-12 H Dead pursuant to the rules SB 1164, Marlatt, Watson Defines “synthetic diesel” regarding rules promulgation by the Corporation Commission; EMERGENCY.

Bill History 04-02-12 H Laid out for consideration in the House 04-02-12 H Passed/Adopted (Vote: Y: 88/N: 0) 04-02-12 H Emergency Passed 04-03-12 G Sent to the Governor 04-09-12 G Signed by the Governor SB 1168, Aldridge Debt cancellation agreements between creditors and borrowers shall remain a part of the loan or retail installment upon the assignment, transfer, or sale of the loan or retail installment contract. Bill History 02-28-12 S Dead pursuant to the rules SB 1354, Burrage, Quinn Allows citizens who use bioptic telescopic devices to obtain drivers licenses. Bill History 04-11-12 H Set on the House Floor Agenda 04-11-12 H Laid out for consideration in the House 04-11-12 H Passed/Adopted (Vote: Y: 92/N: 2) 04-12-12 G Sent to the Governor 04-18-12 G Signed by the Governor (Chap: 1830) SB 1361, Barrington Transfers the property and employees of the Wrecker Services Division of the Department of Public Safety to the Corporation Commission; present salaries and accrued annual and sick leave to be transferred. Bill History 03-16-12 S Dead pursuant to the rules

SB 1458, Johnson, Rob Renames the act the “Use of Aftermarket Emissions and Safety Parts Notice and Consent Act”; modifies definitions of parts and practices; requires notification in estimates. Bill History 02-28-12 S Dead pursuant to the rules SB 1460, Allen Requires a certificate of title for all noncommercial boat trailers, farm trailers, and utility-type trailers; sets fees, registrations, plate requirements and other rules. Bill History 02-28-12 S Dead pursuant to the rules SB 1461, Coates Adds special mobilized machinery utilized in oil and gas exploration, servicing and production to those eligible for excise tax. Bill History 02-28-12 S Dead pursuant to the rules SB 1475, Johnson, Rob; Jordan Creates the Service Warranty Act; defines terms; defines requirements; Details contracts and fees; Declares penalties and confidentiality; Amends Oklahoma Statute 36. Bill History 04-18-12 H Set on the House Floor Agenda 04-18-12 H Laid out for consideration in the House 04-18-12 H Passed/Adopted (Vote: Y: 83/N: 2) 04-19-12 G Sent to the Governor 04-25-12 G Signed by the Governor C O N T I N U E D O N PA G E 2 2

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C O N T I N U E D F R O M PA G E 2 1

SB 1476, Johnson, Rob; McNiel Addition of service contracts requiring information for administrators; Not requiring all parties to be printed on contract, but may be added at the time of sale. Bill History 04-27-12 H Dead pursuant to the rules SB 1497, Brinkley, Mulready Removes unnecessary section references and increases one year period to 36 months for closing out sales from the expiration date of the closing out sale license in regards to OK Consumer Protection Act violations; EMERGENCY. Bill History 05-08-12 S Set on the Senate Floor Agenda 05-08-12 S Laid out for consideration in the Senate 05-08-12 S Senate concurred in House amendments 05-08-12 S Passed/Adopted (Vote: Y: 41/N: 0) 05-15-12 G Signed by the Governor SB 1515, Johnson, Rob Adds the core charge for automobile parts to the list of sales tax exempt items. Bill History 02-28-12 S Dead pursuant to the rules SB 1536, Johnson, Rob Amends the definitions and licensing requirements of motor vehicle and parts dealers. Adds licenses required, provides for fees, and changes bonds. Bill History 02-28-12 S Dead pursuant to the rules SB 1542, Marlatt Salaried deputy sheriffs can demand weight registration certification from vehicles. Bill History 02-28-12 S Dead pursuant to the rules

SB 1762, Sykes Defines sections relating to false information in drivers education. Bill History 02-28-12 S Dead pursuant to the rules SB 1776, Johnson, Rob; Grau Notices of impoundment sent by appropriate agency to be sent by certified mail; allows lienholder of vehicle to provide copy of lien and affidavit approved by OKDPS to have vehicle released from impoundment. Bill History 04-13-12 H Dead pursuant to the rules SB 1793, Jolley; Murphey Removes certain license plates types from authorized special plates; authorizes Administrator of Oklahoma Tax Commission to reissue special plates authorized before January 1st, 2004. Bill History 04-27-12 H Dead pursuant to the rules SB 1833, Childers, Greg Removes previous information regarding offroad vehicles; defines off-road vehicles, sets new requirements and rules for enforcement. Bill History 02-28-12 S Dead pursuant to the rules SB 1839, Ballenger Clarifies language of existing legislation pertaining to removal of vehicles from roadway. Bill History 02-28-12 S Dead pursuant to the rules SB 1840, Newberry Clarifies language of existing legislation pertaining to wreckers and towing services. Bill History 02-28-12 S Dead pursuant to the rules

SB 1844, Childers, Greg Creates the “Off-road Vehicle Safety and Control Act”. Bill History 02-28-12 S Dead pursuant to the rules SB 1846, Childers, Greg Creates the “Off-road Vehicle Safety and Control Act”. Bill History 02-28-12 S Dead pursuant to the rules SB 1870, Newberry Defines certain rules that the Motor Vehicle Commission can apply to fines and fees. Bill History 02-28-12 S Dead pursuant to the rules SB 1929, Bingman Relates to certain agencies that are to be consolidated. Bill History 02-28-12 S Dead pursuant to the rules SJR 16, Sparks, Schwartz Sends to a vote of the people a measure that would allow permanently disabled veterans to claim a homestead exemption for a manufactured home whether or not the home is located on the veterans’ real property. Bill History 05-25-12 S Dead pursuant to the rules

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Dinner is served from 5:30 till 6:30pm. • We have a host of New Car Stores, Loan companies, Banks, and credit unions. • We strive to provide an extremely friendly atmosphere and full service to our dealer family. • Come Experience where Dealers will be treated with more respect and service !! • We are a family owned and operated, experienced business with a respected reputation thru out the automobile industry. We take great pridein being the best we can possibly be.

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NIADA’s Petersen Joins NMVTIS Advisory Board

Independent dealers were given a voice in the National Motor Vehicle Title Information System (NMVTIS) when NIADA legislative / regulatory/compliance counsel Shaun Petersen was named to the NMVTIS Advisory Board. Petersen becomes the second auto industry representative on the 27-member board, joining James Moors of the National Auto Dealers Association. Moors, who represents new car dealers, suggested adding Petersen to the board to represent the used car business, Petersen said. “My appointment to the board will bring the voice of the used car dealer to the table,” Petersen said. “NIADA is seen as an independent and different voice from the new car dealer. I think it is significant they sought us out.” The board – which also includes members representing the insurance industry, the salvage industry, law enforcement, consumer advocates, state departments of motor vehicles, organizations focused on preventing vehicle-related crime and the system’s technology partners – was established to advise the Department of Justice’s Bureau of Justice Assistance on ways to promote the effective and efficient administration of the NMVTIS program and database. NMVTIS was created to prevent the introduction of stolen vehicles into commerce, to protect states and consumers from fraud, to reduce the use of stolen vehicles for illicit purposes and to provide consumer protection from unsafe vehicles. NMVTIS reports provide title and branding data, odometer readings, total loss history and salvage history. Insurance carriers, auto recyclers and junk and salvage yards are required to report data to the system, and states must perform an NMVTIS check before issuing a title.

OIADA New and Renewal Members

The following list includes members who joined or renewed their OIADA/NIADA membership during May, 2012. We express our sincere appreciation for all the members of OIADA and we extend our invitation to dealers who are not members. A membership application can be found elsewhere in this Newsletter. We urge you to be an active part of maintaining a strong and effective used car industry voice in the legislative and regulatory environment. With the current Administration’s attitude toward the motor vehicle sales industry, we need that voice more than ever! Chris Goad, President

R R R R R R R R R R R R R R R R N R R R N

COMPANY

Diffee Motor Company Jerry’s Auto Sales Results, Inc. Autos Wilmes Ford-Lincoln-Mercury Dan Mullins Nissan Sunwest Motors, Inc. Overdrive Automotive Center Tallgrass Motors, LLC Auto Ranch, Inc. Scott Auto Sales Parker’s Used Cars Amigo Land Motors, Inc. Car Mart #1 The Key Ray Hibdon’s Car Choice Cars, Etc. Hitchin Post Motors M & R Motors Dealers Finance Co., LLC Roy Burch Auto Sales, Inc. Sissortail Auto Sales

NAME

Diffee Motor Company Jerry Peffer Larry Spencer Jeff Wilmes Dan Mullins Carroll Isbell United Auto Sales, Inc. Craig Demuth Joni Countryman Herbert Garner Scott H. W. Parker Raul Machado Bryan Adams David Frayer Denny Dodd David W. Blalock, Jr. Tresa Lackey Meredith Grizzle Max Maxey Roy Neil Bruch Calvin Ruth

JOINED CITY

1991 2003 2010 1991 1995 1991 1997 2006 2004 2000 2003 2010 1996 1996 2009 2007 2012 2006 2002 1991 2012

Bethany Elk City Norman Altus Lawton Oklahoma City Tulsa Pawhuska Ardmore Tulsa Prague Oklahoma City Tulsa Oklahoma City Del City Anadarko Fairview Holdenville Oklahoma City Duncan Tulsa

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G I V I N G B A C K T O T H E C O M M U N I T Y H A S A LWAY S B E E N O N T H E T O P O F H I S L I S T

NIADA Names 2012 Quality Dealer of the Year Former Ohio State football player Michael T. D’Andrea of Columbus, Ohio was named 2012 National Quality Dealer of the Year by the National Independent Automobile Dealers Association during NIADA’s 66th Annual Convention and Expo in Las Vegas. In a ceremony televised live from Caesars Palace to an online audience of 150,000 viewers, D’Andrea was chosen from the 21 State Quality Dealers nominated for highest honor given to one of the NIADA’s 20,000 dealer members. D’Andrea is co-owner of Miracle Motor Mart in Columbus, a dealership he founded in 1989 with 40 cars and $150,000 worth of inventory. Miracle Motor Mart now has two locations and 46 employees, and has a combined inventory of more than 400 vehicles. NIADA National Quality Dealer candidates are judged on a variety of factors, including contributions to the automotive industry and community involvement. A panel of judges from Northwood University selects the

annual winner. NIADA chief executive officer Michael Linn said D’Andrea “has provided a superior level of service for his customers, his community and his industry that is beyond reproach. He says his goal each and every day is, ‘God first, others second and myself last.’ “Giving back to the community has always been on the top of his list – supporting youth summer camps, working for his church, distributing food, clothing, toys, medical supplies and prayer to more than 700 families each year. It is an honor and a privilege to bestow this great award to a well deserving dealer, member and automotive professional.” D’Andrea, who played linebacker for Ohio State from 1979-81, and his partner, Mark Meadows, are heavily involved in charity projects in Columbus, including the Run the Race Club, St. Paul’s Outreach, Catholic Youth Summer Camp and St. Patrick’s Youth Ministry. D’Andrea said his business prides itself on “teamwork, loyalty, ethics and honesty,”

and said as the dealership has grown, “in that growth you’re almost forced to do more. You’re almost required to do more. “I’m proud of NIADA’s commitment to encourage dealers to make a difference in their community. We have all been given a great gift of self-employment and being in a free country. … We have a great responsibility with all these gifts we have been given. Let us share them with our friends, our families and our community.”

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License Applicants Approved

The following applicants, as listed in the Agenda for the Used Motor Vehicle and Parts Commission Regular Meeting of June 12, 2012, were considered for issuance of used motor vehicle dealer licenses and wholesale vehicle dealer licenses. The applications were approved pending compliance with the State licensing laws and rules, and subject to final approval by Commission staff.

USED DEALER LICENSES

Stars GPS

We are pleased to include Stars GPS as an OIADA Branded Provider of vehicle tracking and recovery solutions for our industry. Stars GPS specializes in providing the best technology with personal service, training and support for the independent and franchise dealership. For more information, go to www.stars-gps.com, email info@stat-gps. com or call 877-828-4770.

David L. Nunn, Esq.

David L. Nunn heads the Edmond, Okla., law office of David L. Nunn, P.C., which serves the greater metro Oklahoma City area. We are pleased to include Mr. Nunn as an OIADA Select Provider of legal services to the industry. David L. Nunn, P.C. is located at 17 East First Street, Edmond, OK 73034. He can be reached at 405-330-4053 or by fax at 405-330-8470. Mr. Nunn is included as a Select Provider not because he asked to be, but because we know the quality of service that he provides to dealers.

B & C Auto Transport, Inc.

COMPANY Backroad Autos, LLC Big Dog Auto Auction, LLC C & D Truck & Auto Sales Cars 4 Credit Gable Motors & Equipment, LLC *Kerry Davis Chevrolet (Two on a lot with Don Cannon Motors, Inc.) Lakeshore Boat & Auto, LLC Norman Direct Auto, LLC Quality Global Auto Exports, LLC Souled Out Motors Stroud Auto The Car Choice, LLC Universal Vehicle Sales, Inc. Willie’s Used Cars Youngblood Auto Sports, LLC

NAME Chris L. Hays David L. Bridges Terry Ishmael Richard Ishmael Darlene Neely Jack Murdock Levi Gable Dan Gable Kerry Davis

CITY Velma

Stephen Baker David Baker Patricia Melton Robert S. Banfield Lindsay M. Mayes Richard T. Howard, II Charles Gooch Shaun Keith Alia Rula ‘Lia’ Al-Assaf Ali Ray Assaf Lisa McCoy Casey McCoy Jason Wilson Patte Wilson Gregory Jones Juan Westfall Virdiana Herrera Kay Willison Buddy Leon Youngblood

Eufaula

Earlsboro Cameron

NAME Mohammad Karimian Weam Kalidy Tyler Vaughn Nicholas Shahbazi

CITY Tulsa Edmond Oklahoma City Norman

Collinsville Claremore Coweta Tulsa Cordell

Newcastle

Oklahoma City Hartshorne

Stroud Tulsa

* Special circumstances

B & C Auto Transport takes pride in providing fast, dependable transport service to auto dealers nationwide. We are pleased to include B & C Auto Transport, Inc. as an OIADA Select Provider of transport services for auto dealers nationwide because of its record of providing outstanding service at reasonable rates. Call 405-381-0114 or 405-6416057 (cell), or email BCAutoTransportInc@gmail.com.

WHOLESALE DEALER LICENSES COMPANY Capital Cars Eagle International Autos, Inc. GTO Motors Remington Auto Finance, LLC

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OIADA Can Help Make

Your Path

Certain.

Oklahoma Independent Automobile Dealers Association For $295 You Get Membership In Both OIADA and NIADA Plus All Of The Following Benefits And Even More That Are Not Listed!

Programs for Extra Profit

• Access to Insured Warranty & Service Agreements • How to Structure a Related Finance Company • Networking Opportunities With Other Dealers

Programs to Help Keep Profit

• NADA Guide Books – single copy or subscription • Black Book Guide Books – single copy or subscription • Dealer Bonds - Salesmen’s Bonds • Discount on complete line of State approved Business Forms • Discount on Dealer supplies National Dealer Network Skip Tracing Contacts

Publications Public

• OIADA Magazine/Newsletter • Federally Required Safeguards Policy Document • Federally Required Red Flags Rules Policy Documents • IRS Audit Technique Guide For the Independent Used Car Dealer • Current Industry Information • Legislative Alerts • NIADA Monthly Magazine • NIADA Annual Buyer’s Guide

Professional Development

• Dealer Educational Seminars • Certified Master Dealer Program • Regional Professional Development Compliance Seminars • Free Access to NIADA.tv Training at Your Business • Access to IndependentDealer.com where dealers go for answers • NIADA Membership and Window Decal • OIADA “Symbol of Integrity” Logo, Window Decal and Membership Plaque • NIADA Annual Convention and Trade Show • Individual Assistance by phone • Code of Ethics

Representation

• State Lobby and Consultant Services • State Legislative and Regulatory Tracking and Reporting • Federal Lobby and Consulting Services • Federal Legal, Legislative and Regulatory Tracking and Reporting • Used Motor Vehicle and Parts Commission Liaison • Oklahoma Tax Commission Liaison • Oklahoma Department of Consumer Credit Liaison • Full Time Professional Staff to assist you when problems arise

Members Can Also Sign Up For Automotive Dealers Rewards From

Automotive Dealers Resource Of Oklahoma and Earn Money Saving Coupons For Their Future Purchases. Visit http://rewards.buyadr.com/

Automotive Dealers Rewards is open to Members and Non-Members Who Purchase From ADR of Oklahoma

Join OIADA online at http://www.e-oiada.com/join 29

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F O R M O R E I N F O , G O O N L I N E T O W W W. N H T S A . G O V O R W W W. S A F E R C A R . G O V.

NHTSA Recalls

Chevrolet Cruze, My 2011-2012 NHTSA ID number: 12V289000 Fuel system, gasoline: Storage: Tank assembly: Mounting Units affected: 52,239 General Motors (GM) is recalling certain model year 2011 and 2012 Chevrolet Cruze vehicles manufactured from Oct. 2, 2009 through May 14, 2012. Attachment welds for the fuel tank strap secondary brackets might have been omitted. The fuel tank could come loose in a crash, possibly allowing fuel to leak from the tank. A fuel leak in the presence of an ignition source could result in a fire. GM will notify owners, and dealers will inspect the vehicle for missing welds. If the vehicle is missing welds, dealers will secure the bracket attachments with fasteners. Repairs will be performed free of charge. The safety recall is expected to begin on or about July 11, 2012. Owners can contact the Chevrolet Owner Center at 1-866-694-6546. GM’s campaign number is 12133. Chevrolet Cruze, My 2011-2012 NHTSA ID number: 12V288000 Engine and engine cooling Units affected: 413,148 GM is recalling certain model year 2011 and 2012 Chevrolet Cruze vehicles manufactured from Oct. 2, 2009 through May 31, 2012. Spilled or dripping oil (such as after an oil change) can collect in the engine shield (bellypan) near hot engine or exhaust system surfaces. As a result, the oil and the engine shield could ignite and burn. Either condition could result in an engine compartment fire, possibly causing injury or death. GM will notify owners, and dealers will modify the engine shield to prevent fluid from contacting the shield. Also, on vehicles with a manual transmission, dealers will apply a protective tape to the electronic power steering wire harness. Repairs will be performed free of charge to the owner. The safety recall is expected to begin on or about July 11, 2012. Owners can contact the Chevrolet Owner Center at 1-866-694-6546. GM’s campaign number is 12081.

Mercedes-Benz E350, MY 2007-2009 NHTSA ID number: 12V264000 Suspension: Rear Units affected: 3,613 Mercedes-Benz is recalling certain model year 2007-2009 E350 4Matic Wagon vehicles manufactured from July 1, 2006 through April 30, 2009. A connecting rod for the load leveling rear suspension system could fail. If that occurs, the driver can have reduced vehicle control, increasing the risk of a crash. Mercedes-Benz will notify owners, and dealers will replace all the connecting rods, free of charge. The safety recall is expected to begin during August 2012. Owners can contact Mercedes-Benz at 1-201-573-0350. BMW X5, MY 2012-2013 BMW X6, MY, 2013 NHTSA ID number: 12V267000 Steering Units affected: 2,642 BMW is recalling certain model year 2012 X5 vehicles equipped with a diesel engine and 2013 X5 and X6 vehicles. Due to a machining error of the steering gear surface, power steering fluid can leak. Leaking power steering fluid can spray onto hot exhaust parts, increasing the risk of an engine compartment fire. BMW will notify owners, and dealers will

inspect, and if necessary, replace the steering gear free of charge. The safety recall is expected to begin during July 2012. Owners can contact BMW customer relations and services at 1-800-525-7417. Honda Civic, MY 2012 NHTSA ID number: 12V256000 Power train: Driveline: Drive shaft Units affected: 50,190 Honda is recalling certain model year 2012 Honda Civic vehicles. During assembly, the process required to seat the driver’s side drive shaft and set the retaining clip was not completed. As a result, the drive shaft can separate. If that occurs, the vehicle will have a loss of drive power and could roll away if the parking brake has not been set when the gear selector has been placed in the “Park” position, increasing the risk of crash or pedestrian injury. Honda will notify owners, and dealers will inspect the driver’s side drive shaft and install a new drive shaft, as needed, free of charge. The safety recall is expected to begin on or about, June 21, 2012. Owners can contact Honda Customer Service at 1-800999-1009. Honda’s recall campaign number is S40. KIA Borrego, MY 2009 NHTSA ID number: 12V245000 Service brakes, Hydraulic: Pedals and linkages Units affected: 21,912 KIA is recalling certain model year 2009 Borrego vehicles, manufactured from May 2, 2008 through Jan. 20, 2009, equipped with non-adjustable brake pedals. Certain pedal mounts can have a fiberglass composition that allows them to break off in a collision where the impact has not immobilized the vehicle, which would then allow the vehicle to roll. If that occurs, the driver would need to stop the vehicle with the parking brake or experience a possible second impact, increasing the risk of personal injury. KIA will notify owners, and dealers will replace the brake pedal mount, free of charge. The recall will begin during June 2012. Owners can contact KIA Consumer Assistance Center at 1-800-3334542. KIA’s safety recall campaign number is SC096. KIA Rio, MY 2006-2008 NHTSA ID number: 12V244000 Air bags: Frontal: Sensor/control module Units affected: 72,568 KIA is recalling certain model year 20062008 Rio vehicles, manufactured from Feb. 20, 2005 through Dec. 9, 2007. The front passenger seat occupant sensor mat can experience fatigue cracking. If sufficient cracking occurs, the occupant classification system (OCS) will cease to function such that the system will not be able to detect whether a child passenger is in the seat and the airbag will deploy during a crash necessitating deployment. Air bag deployment with a child in the front passenger side seat increases the risk of injury to that child. KIA will notify owners, and dealers will replace the OCS seat sensor mat, free of charge. The recall is expected to begin during July 2012. Owners may contact KIA Consumer Assistance Center at 1-800-333-4542. KIA’s safety recall campaign number is SC097. For more information, go online to www. NHTSA.gov or www.SaferCar.gov.

EXTENDED COMMITMENT

Rent-A-Wreck Offers $1,000 Off a Franchise Rent-A-Wreck of America, a franchise company with more than 150 used car rental locations throughout the U.S., is now offering NIADA members a $1,000 discount off the purchase of a franchise. Rent-A-Wreck, an endorsed NIADA National Member Benefit Partner, has extended its commitment to independent dealers by pledging to contribute $1,000 to the dealer’s state association or the national association for every franchise sold to an NIADA member. Since 1973, Rent-A-Wreck of America has offered used car dealers a franchise they can operate at their existing retail sales lot to bring extra revenue and additional foot traffic with little additional overhead. “Our franchise brings used car dealers everything they need to become a player in their local car rental marketplace,” Rent-A-Wreck of America vice president of operations Michael DeLorenzo said. “We have financing, insurance, a global reservation system and a comprehensive and sophisticated training system that makes car rental a near turnkey opportunity for a used car dealer. “Rent-A-Wreck is a great brand with a long and successful history with used car dealers. Our franchisees who are used car dealers see the benefit of additional cash flow and profits from rentals, but also see that the increased foot traffic helps them sell more cars as well.” Rent-A-Wreck franchise owners receive access to a fleet leasing and purchase program that includes access to closed factory sales, a reservation system connected to multiple global booking channels, online travel agencies, rentawreck.com and 1-800 telephone reservations, point of sale integration with the reservation system, a comprehensive training program in pre-open and post-open phases, a dedicated area representative for recurrent and ongoing needs, insurance and more. For more information, visit www.rentawreck.com/NIADA or call (469) 939-6132 to speak to a company representative.

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V I S I T W W W. N I A D A H E A LT H P L A N S . C O M .

What Health Care Ruling Means to You The U.S. Supreme Court found in favor of the 2010 health care law, deeming the individual mandate to purchase health insurance unconstitutional under the commerce clause but upholding the mandate by now calling it a tax. Because of the ruling, some of the key factors that will be taking place in the year and a half include: Individual mandate: Starting in 2014, everyone in the United States must buy health insurance or be subject to a tax.

STARTING IN 2014, ALL HEALTH INSURANCE COMPANIES MUST ACCEPT ALL APPLICANTS REGARDLESS OF PRE-EXISTING CONDITIONS. NIADA MEMBERS HAVE ACCESS TO GUARANTEED-ISSUE, LIMITED MEDICAL RIGHT NOW BY VISITING WWW. NIADAHEALTHPLANS.COM.

Those who cannot afford to buy health insurance – families at poverty level – will be subsidized by the government. Families making more than $80,000 per year will not receive a subsidy. That provision was the heart of the lawsuit challenging the law. The individual mandate goes hand-in-hand with the next provision: guaranteed issue. Making everyone buy insurance stops people from buying it only when they become sick. Guaranteed issue: Also starting in 2014, all health insurance companies must accept all applicants regardless of pre-existing conditions. NIADA members have access to guaranteedissue, limited medical right now by visiting www.niadahealthplans.com. Minimum essential coverage (MEC): The provision states the government will regulate what plans will cover and will not cover as a means to qualifying acceptable coverage. Having acceptable coverage means not facing fines or penalties.

It is expected the highest deductible will be $2,000 for an individual and $4,000 for a family. That, however, could jeopardize Health Saving Accounts (HSAs), which are linked to high-deductible health plans and are a popular option for the self-employed and for small businesses. Health insurance exchanges: Each state will set up a health insurance exchange for consumers to shop for health plans. If they qualify, consumers will be able to receive subsidies through the exchange. NIADA members can Visit the NIADA Health Insurance Exchange right now to shop for rates from multiple carriers through www.niadahealthplans.com. Additional questions on the law and how it will affect you? NIADA members can call the NIADA Member Health Plans hotline at 888-308-9340 or visit www.niadahealthplans.com.

BY TODD PAGE, JLBG HEALTH

TODD PAGE IS VICE PRESIDENT OF JLBG HEALTH, THE ADMINISTRATOR OF NIADA MEMBER HEALTH PLANS.

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COMPLIANCE OVERDRIVE

Look Before You Lease When I attend industry events, I enjoy meeting dealers and hearing their takes on current challenges and trends facing the industry. One topic that has come up recently is leasing. I have heard a number of dealers comment on how they would like to expand their dealership and start leasing vehicles. While that might sound like a natural step in growing a business, dealers must consider the differences between selling and leasing. To be clear, by “lease,” I mean a contract allowing a customer to use your vehicle for a period of time (minimum: four months). At the end of the lease, the customer returns the vehicle and doesn’t owe you any more money as long as the vehicle has only reasonable wear and tear and was driven no more than the agreed mileage. If there is an option to purchase, the option price bears some relation to the vehicle’s expected market value at the time the option is exercised. In other words, the lessee doesn’t have the option to purchase for $1 because that would really be a sale, disguised as a lease.

Adding leasing to an independent dealership might sound simple. You’re already arranging loans and payments for the vehicles you sell, so why not expand your in-house financing to offer customers another option? But it’s not as easy as it looks. Here are key areas to consider when making your decision. Licensing: Make sure your license for selling vehicles also allows you to lease vehicles. Your current license might not be broad enough to authorize leasing. Insurance: When you sell a car, the title is transferred to the buyer. You focus on receiving timely payments and confirming the buyer has sufficient insurance to protect your security interest in the vehicle. You probably have property and liability insurance to protect your inventory and sales. However, when a dealer leases a car, he still owns it. If the vehicle is involved in an accident, you might be subject to liability as the owner. As part of researching a leasing operation, meet with your legal counsel and insurance carrier to make sure you protect against liability exposure with appropriate insurance coverage. Pricing: Determining the sales price of a vehicle is pretty straightforward. You know your costs to purchase and prepare the vehicle for sale, sales costs and profit margins, and sell the vehicle for more than your costs. You know at the time of sale whether you are making money on the deal. With a lease, the calculations are more complicated. It might be easy to determine what the vehicle is worth today, but how do you know what it will be worth when the lease is up, say, two or three years from now? That depends on factors such as how many miles it will be driven and how well it is maintained. There are also unknown variables. What if gas prices rise drastically and the vehicle is a gas-guzzler? That could impact the market value at the end of the lease (residual value). In most consumer leases, the dealer is on the hook if the residual value is less than predicted. You won’t really know if you’re making money on a lease until you find out how well you predicted the residual value. You might be two or three years into the lease program before you realize you’ve set your residual values too high – and by then it’s too late. Documentation and disclosures: You can’t just modify a retail sales contract to make it a lease. If you are planning to include leasing, you must make sure

your documents meet state and federal consumer lease requirements. The federal Consumer Leasing Act and its implementing Regulation M are the lease disclosure equivalents of the Truth in Lending Act and Regulation Z for consumer lending. Reg M requires dealers to provide a great deal of specific pricing information in lease contracts. Many states require additional disclosures and consumer protections. As part of your leasing startup, you will need to create a unique document set of disclosures and contracts. Taxes: In a lease you retain ownership, so you might roll your sales taxes to purchase the vehicle into your costs and lease calculations, but you might also need to collect use or other taxes on the payments throughout the lease term. Contact your accountant and/or the state to understand your tax obligations and how they differ for leases. Collections: If a buyer doesn’t make timely retail contract payments, you can repossess the car. Fear of losing the car can help motivate a buyer into making past due payments. In a lease, the lessee doesn’t own the car and may expect to return it and walk away at the end. That might make it a little easier for the lessee to emotionally handle repossession, but it might mean the lessee isn’t afraid of having the car repossessed and isn’t as motivated to make past due payments. As with a financed sale, once you repossess a vehicle, the lessee has even less motivation to pay any balance still due. If a car is returned with wear or damage beyond what’s agreed on in the lease, it can be difficult to collect money to cover those costs. You can use the lessee’s damage deposit, so make sure you set it at a practical amount – it might be the only money you end up recovering for excess wear and tear. These are only some issues to consider when starting a lease program. You can identify more by simply reading a motor vehicle lease contract. The differences between selling and leasing are dramatic and can’t be overlooked. Your operations and compliance can be affected by the type of transaction, the vehicle and the state in which you are doing business.

BY CHIP ZYVOLOSKI

CHIP ZYVOLOSKI IS A SENIOR ATTORNEY FOR INDIRECT LENDING AT WOLTERS KLUWER FINANCIAL SERVICES. FOR MORE INFORMATION, VISIT WWW.WOLTERSKLUWERFS. COM/INDIRECT.

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Oklahoma Dealers Resource Aug 2012