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June 5, 2017
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States Step up Regulatory Enforcement
WATCH OUT: New York Attorney General Eric Schneiderman speaks to reporters during a recent press conference. Schneidermen is among the more active attorneys general in the country when it comes to taking action against automobile dealers.
By Ted Craig
is New York Attorney General Eric Schneiderman. Schneiderman has taken numerous actions against car dealers in the past year, including a recent settlement with more than 100 dealers who sold vehicles with open recalls. But Republican attorneys general are a little better in many cases. For example, Ohio Attorney General Mike DeWine regularly announces actions against car dealers, often involving the failure to deliver titles. The state maintains a fund to reimburse consumers in such cases. Part of the reason state regulators take so many actions against car dealers is complaints about auto
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LAS VEGAS – While federal regulators like the Consumer Financial Protection Bureau and the Federal Trade Commission get all the attention, the real threat for dealers lies in the states. A panel at this year’s National Alliance of Buy-Here, Pay-Here Dealers told attendees that is truer than ever. The Trump administration has taken a very public stance against regulation. At the same time, many attorneys general have taken a very public stance against the president. The website for the Democrat-
ic Attorney Generals Association states, “Democratic attorneys general are the first line of defense against the new administration.� One way the group’s members plan on taking rear-guard action is by taking up causes the federal regulators might back off on. For example, California’s attorney general is considering using disparate impact claims in auto finance cases, just like the CFPB. DAGA represents almost half of the attorneys general in the country. “If you’re in one of these states, prepare for the worst,� said attorney Terry O’Loughlin. A prominent member of this group
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sales and repairs rank high among their constituents. While auto complaints barely register in the FTC’s annual tally of complaints, they rank at or near the top in many states. Elected regulators tend to make a big deal about major actions against car dealers and finance companies because it helps promote their careers, O’Loughlin said. And when they do this, other regulators pay attention and follow suit. O’Loughlin said the worst outcome for a firm is when more than one attorney general goes after it. “It’s like a pack of wolves going after a company,� he said.