Houston Independent Automobile Dealers Association October 2015 Issue: Sales Training | Page 8

The CARLAWYER©
By Thomas B. Hudson and Nicole Frush Munro
August was a slow month in Washington, but we found a few interesting items for you. This
month, we feature developments from the Consumer Financial Protection Bureau, the Federal
Trade Commission and the Pennsylvania Attorney General we thought might interest to those in
the auto sales, finance or leasing business. We also recap some of the auto sale and financing
lawsuits we follow each month. Remember – we aren’t reporting every recent legal
development, only those we think might be particularly important or interesting to dealers.
Why do we include items from other states? We want to show you new legal developments and
trends. Also, another state’s laws might be a lot like your state’s laws. If attorneys general or
plaintiffs’ lawyers are pursuing particular types of claims in other states, those claims might soon
appear in your state.
Note that this column does not offer legal advice. Always check with your own lawyer to learn
how what we report might apply to you, or if you have questions.
This Month’s CARLAWYER© Compliance Tip
State attorneys general have their collective hair on fire about dealer advertising. Most of the
advertising violations the AGs are prosecuting are for violations of some pretty basic rules. Do
you know the federal and state advertising rules that apply to your dealership? If not, urge your
state dealer association to put on a “Car Dealer Advertising Basics” seminar or webinar. Also,
collect all the advertising rules into a manual, and have your lawyer confirm that you’ve found
them all. Finally, schedule periodic reviews of the material you have gathered and periodic
training of the employees responsible for your ads.
Federal Developments
E-Closings in the F&I Office? On August 5, the CFPB published a report on its “Know Before
You Owe” eClosing project which found that borrowers can benefit from electronic closings
when navigating the mortgage closing process. Specifically, the results of the pilot indicate that
those who closed their mortgage using an electronic platform are generally better off on
measures of understanding, efficiency, and feeling empowered than borrowers who used just
paper forms.
In April 2014 the CFPB released a report that outlined the major pain points associated with the
closing process – the last step before consumers are contractually obligated to their loans. The
report found that consumers felt like they did not have enough time to review the documents.
Consumers also felt overwhelmed by the stack of complex paperwork. Finally, consumers
complained about finding errors in the documents.
The CFPB identified electronic closings, also known as eClosings, as one solution to address
some of these pain points. Electronic closings rely on technology for borrowers to view and sign
closing documents electronically. The benefits can include faster delivery of the documents and
embedded links to help consumers understand specific terms as they come across them.