Regulators Propose Stricter Rules for Dealers

By Jeffrey Bellant Compliance

requirements in the retail auto industry don’t go away, they just seem to expand.

The new year brings a couple of major requirements for independent dealers and some proposed rules, which would also mean big changes.

The Federal Trade Commission under the Biden Administration has been active in pushing for new regulations while also inflicting heavy punishments on those who don’t follow the current rules.

The FTC’s most recent proposed rule is to ban non-compete clauses and it has scheduled a Feb. 16 public hearing for people to discuss their experience with such clauses.

The FTC’s proposed rule generally would prohibit employers from using noncompete clauses, includ- ing independent contractors and anyone who works for an employer, whether paid or unpaid. Among other things, the rule would also require employers to rescind existing noncompete clauses and actively inform workers that they are no longer in effect.

Adam Crowell, president and general counsel of ComplyNet, discussed some of the regulatory challenges in the recent Used Car News Podcast.

“With this administration, we have three Democratic FTC Commissioners and currently there’s only one Republican because the other one stepped off the board and hasn’t been replaced (at press time),” Crowell said.

This current version of the FTC is acting aggressively to push rules affecting auto sales.

“With this administration they have a lot of things they are trying to get accomplished and there are a lot of rules they are trying to get passed,” Crowell said.

These rules are likely to get passed, but it’s too early to know their final form or when they will get passed.

Crowell said it’s important for the used-car industry to pay attention to this process, from issues involving dealer markups, the Fair Credit Lending Policy and even with F&I products.

The elephant in the room now is the FTC’s proposed Motor Vehicle Trade and Regulation Rule.

It is something the FTC would like published on every dealer’s website.

That would include every add-on product the dealer sells, what the price of those products are and – if there is no set price – then the range

Continued on page 3 for all your dealership needs!

• Local Point of Service in YOUR market

• Bulk Purchase Program

• Payment Stream Advances (6-15 months)

• Aged Pay Share Program that gives you Capital and Cash Flow!

• Floorplan for select BHPH Dealers

• Servicing for all types of Auto Receivables

1.877.570.8857