Reynolds and Reynolds
Solutions
Dealership Compliance

Protect Your Business
We offer a comprehensive set of solutions to help you manage risk and protect your dealership, from Credit Bureau Inquiry’s ID verification, Adverse Action and Risk-based pricing notifications to docuPAD, laser forms, and menus solutions. 

Red Flags Rule

The Red Flags Rule was issued by the Federal Trade Commission (FTC) and federal banking regulators and is part of the Fair and Accurate Credit Transactions Act of 2003 ("FACT Act"). The effective enforcement date was January 1, 2011.

How does Reynolds help address this?
Reynolds offers an ID verification service through the Credit Bureau Inquiry (CBI) solution for ERA and POWER. With CBI, dealerships can request to automatically receive a Red Flag Report with every credit report, as well as free monthly Red Flags compliance summary reports.

Overview
The Red Flags Rule requires dealers who originate or maintain "covered accounts" (consumer loan or lease transactions) to implement a written identity theft prevention program.

The program needs to:
  • Identify relevant Red Flags.
  • Include processes on how to detect these Red Flags.
  • Outline actions on how to respond to a Red Flag.
  • Be updated periodically to reflect changes in risk.
Administrative requirements:
  • The program must be approved by the board of directors or a senior manager.
  • The program must be overseen by a program coordinator.
  • The program must include staff training as required to implement the program.
A solid identity theft program also helps with Patriot Act compliance.

For more information on Red Flags Rule check the Red Flags Rule FAQ.

The above is offered for informational purposes only and is not intended as legal advice. You should consult an attorney who is familiar with applicable law and your operations for guidance on the full scope of your compliance obligations.

Protect Your Business
We offer a comprehensive set of solutions to help you manage risk and protect your dealership, from Credit Bureau Inquiry’s ID verification, Adverse Action and Risk-based pricing notifications to docuPAD, laser forms, and menus solutions. 

OFAC

The Office of Foreign Assets Control (OFAC) prohibits transactions with the U.S. government's list of names and aliases of individuals, organizations and companies that has been classified as potentially dangerous and a potential threat to national security. The list is updated frequently. Dealerships need to screen all consumers against the OFAC list prior to a sale. Failure to comply with OFAC regulations can expose the dealership to criminal violations and fines.

For more information on OFAC see the FAQ.

How does Reynolds help address this?
Reynolds provides the ability to do an automatic OFAC check when a credit report is run in ERA or POWER. As an option, OFAC reports can be ordered separately for cash-paying customers.

ERA also documents the due diligence process taken to determine whether an OFAC hit is a positive or negative match. The OFAC Documentation screen helps determine a positive or negative match based on a number of customer data points and whether or not they match the OFAC report. The OFAC hit and any potential discrepancies are documented and stored with the deal.

The above is offered for informational purposes only and is not intended as legal advice. You should consult an attorney who is familiar with applicable law and your operations for guidance on the full scope of your compliance obligations.

Protect Your Business
We offer a comprehensive set of solutions to help you manage risk and protect your dealership, from Credit Bureau Inquiry’s ID verification, Adverse Action and Risk-based pricing notifications to docuPAD, laser forms, and menus solutions. 

Risk-based Pricing Rule

The Risk-based Pricing Rule is in compliance with the FACT Act amendments to the FRCA. The effective enforcement date was January 1, 2011.

How does Reynolds help address this?
Reynolds provides an automatic exception notice with every Credit Bureau Inquiry report for ERA and POWER.

Overview
The Risk-based Pricing Rule requires dealers and other creditors to provide a notice to consumers when they are granted materially less favorable terms than other consumers, based on data included in their credit report. Dealerships have two options to comply:

1) Risk-based Pricing Notice: Provide a Risk-based Pricing Notice to consumers who apply for financing and based on their credit report the financing rate is less favorable than the financing rate of a substantial proportion of the dealer's customers.
    OR
2) Exception Notice: Provide a Credit Score Disclosure to every consumer.

Most dealers use the exception notice as it is easier to implement.

For more information on risk-based pricing check the FAQ.

The above is offered for informational purposes only and is not intended as legal advice. You should consult an attorney who is familiar with applicable law and your operations for guidance on the full scope of your compliance obligations.

Protect Your Business
We offer a comprehensive set of solutions to help you manage risk and protect your dealership, from Credit Bureau Inquiry’s ID verification, Adverse Action and Risk-based pricing notifications to docuPAD, laser forms, and menus solutions. 

Adverse Action Notices

Dealers who participate in making credit decisions and who are unable to place financing must provide a notice of Adverse Action. The following conditions indicate a need for this notice:
  • Take a credit application but cannot find any financing who will accept the original terms of the deal.
  • Take a credit application but do not send to any lenders.
  • Unwind or re-contract a spot deal.
How does Reynolds help address this?
Reynolds provides the option to automatically receive an Adverse Action Notice through the Credit Bureau Inquiry solution for ERA and POWER. All adverse action notices are stored with the deal to provide an audit trail.

Overview
A copy of the notice and proof of mailing must be retained. The Equal Credit Opportunity Act (ECOA) requires the dealership to retain these notices for 25 months but many lawyers recommend dealers keep them for five years which is equivalent to the statue of limitations for a consumer to bring a lawsuit under the Fair Credit Reporting Act (FCRA).

Time period to send the Adverse Action Notice:
  • 30 days from the completion / receipt of the consumer's credit application.
  • 90 days after a counter offer is rejected.
The above is offered for informational purposes only and is not intended as legal advice. You should consult an attorney who is familiar with applicable law and your operations for guidance on the full scope of your compliance obligations.

Protect Your Business
We offer a comprehensive set of solutions to help you manage risk and protect your dealership, from Credit Bureau Inquiry’s ID verification, Adverse Action and Risk-based pricing notifications to docuPAD, laser forms, and menus solutions. 

Privacy Notices

The Privacy Rule requires dealerships to give consumers a notice and opt-out procedures concerning the collection, use, and sharing of their non-public personal information. In an effort to ensure uniformity, a new model form has been created by a number of federal agencies (the Federal Trade Commission is the enforcer) to comply with requirements of the Gramm-Leach-Bliley Privacy Act. Dealers are not required to use the new model form; however, in order to qualify for safe-harbor protection, the form used must comply with the more strict requirements regarding language and format effective January 1, 2011.

How does Reynolds help address this?
Reynolds Document Solutions offers three versions of privacy notes derived from the Government "No Opt Out" Model Form. Reynolds has partnered with Hudson Cook LLC to provide dealers assistance in determining the appropriate content for their privacy form. This program benefits those dealerships that may not have access to legal counsel with expertise in Federal Privacy law and need to construct a legally sufficient privacy notice.

Overview
The Government offers an online Forms Builder via their website.

The Privacy Notices requires dealer specific information related to the dealership's business practices and organization printed on them. The type of privacy notice depends on the complexity of the dealer's business requirements and organizational structure.

Rules are stringent, and dealers will likely require legal counsel to determine what will be sufficient for their business.

The above is offered for informational purposes only and is not intended as legal advice. You should consult an attorney who is familiar with applicable law and your operations for guidance on the full scope of your compliance obligations.

Protect Your Business
We offer a comprehensive set of solutions to help you manage risk and protect your dealership, from Credit Bureau Inquiry’s ID verification, Adverse Action and Risk-based pricing notifications to docuPAD, laser forms, and menus solutions. 

Fair and Accurate Credit Transactions Act (FACT Act)

aims to:
  • Prevent identity theft
  • Improve the resolution of consumer disputes
  • Improve the accuracy of consumer records, and
  • Make improvements in the use of, and consumer access to, credit information.
Several rules have been implemented as a result of the FACT Act, one of the most significant being the "Red Flags Rule."

For more information on the U.S. government's requirements please visit:
Fighting fraud with the Red Flags Rule
Federal Register Rules and Regulations

Fair Credit Reporting Act (FCRA)

promotes the accuracy and privacy of information in the files of the nation's credit reporting companies. It requires credit agencies to investigate disputed items in credit reports and establishes procedures for correcting mistakes in a credit record. The Act is intended to protect consumers from having their credit ruined by incomplete or misleading credit report information. It also requires dealerships to have permissible purpose to access a consumer's credit report or credit score.

For more information on the U.S. government's requirements please visit:
The Fair Credit Reporting Act.

Equal Credit Opportunity Act (ECOA)

requires lenders and other creditors to make credit equally available without discrimination and notify credit applicants in writing of any adverse credit action taken. The applicants must be informed in writing of their right to a statement of reasons for any adverse action.

For more information on the U.S. government's requirements please visit:
Equal Credit Opportunity Act.

US Patriot Act

requires dealers to screen all customers prior to a sale against the Office of Foreign Assets Control (OFAC) list of known terrorists, drug traffickers and other "blocked" individuals prior to sale. Due to its length and frequent updates, manually screening the OFAC list is an extremely labor-intensive process.

For more information on The U.S. government's requirement please visit:
Office of Foreign Assets Control (OFAC).

Truth in Lending Act (TILA)

requires dealers to provide written disclosure of important terms in credit and lease agreements. The intent is to disclosure significant points of the agreement so that consumers can make comparisons between credit offerings.

For more information on the U.S. government's requirements please visit:
Truth in Lending Act.

Gramm-Leach-Bliley Act (GLBA) - Privacy Rule

requires dealers to give consumers privacy notices and provide opt-out procedures regarding the collection, use, and sharing of personal information.

For more information on the U.S. government's requirements please visit:
GLBA Privacy of Consumer Financial Information.

Gramm-Leach-Bliley Act (GLB) FTC - Safeguards Rule

requires dealers to ensure the security and confidentiality of the consumer information they collect. Dealers must implement a written information security program.

For more information on the U.S. government's requirements please visit:
GLBA Safeguards Rule.

FTC Address Discrepancy Rule

notice sent by a consumer reporting agency (CRA) that informs the user of a substantial difference between the inputted consumer address and the address found in the bureau's file. Users of consumer reports are required to furnish the consumer's address to the consumer reporting agency that provided the address discrepancy notice, if all of the following conditions are met:
  • Reasonable belief that the consumer report belongs to the consumer.
  • Establishes a continuing relationship with the consumer.
  • Regularly, and in the ordinary course of business, furnishes information to the CRA from which the notice came from.
For more information on the U.S. government's requirements please visit: Address Discrepancy Rule.

The above is offered for informational purposes only and is not intended as legal advice. You should consult an attorney who is familiar with applicable law and your operations for guidance on the full scope of your compliance obligations.
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