Pub. 56 2015-2016 Issue 1

35 FALL 2015 unfair or deceptive acts or practices by motor vehicle dealers. 31 Under Section 1029 of the Dodd-Frank Act, the FTC retains its enforcement authority over a motor vehicle dealer, which is the exclusive authority for a motor vehicle dealer that routinely assigns a credit contract to an unaffiliated third party and concur- rent authority with the Consumer Financial Protection Bureau as to dealers that do not. 32 Under the Dodd-Frank Act, the FTC retained its authority to enforce Regulations Z, M, and E. In addition, the FTC is authorized to enforce any Consumer Financial Protection Bureau (CFPB) rule applicable to an entity within the FTC’s jurisdiction. After the signing of the Dodd-Frank Act, the FTC elected to conduct roundtables to gather information regarding consumer protection issues and how to address those issues through rule- making or other initiatives. The first roundtable was held at Wayne State University Law School in Detroit, Michigan on April 12, 2011; the second oc- curred in San Antonio, Texas at St. Mary’s University School of Law, on August 2-3; and, the third roundtable was inWashington, D.C., on November 17, 2011. The roundtables covered topics on motor vehicle leasing; financ- ing; military consumers; financial literacy; fair lending; interest rates; dealer reserves; markups; locator devices; consumer privacy; spot delivery; contract add-ons; and, title issues. The FTC is responsible for the Equal Credit Opportunity Act (ECOA) enforcement and other statutes and regulations regarding financial services such as TILA, CLA, Regulation Z, M, and E, related to most non-bank financial service providers. Fair lending is frequently discussed among federal regulators and NADA has issued a policy and program for dealers to assist in compliance as well as a brochure for consumers in conjunction with the FTC, “Understanding Vehicle Financing.” Dealers and representatives of the automobile industry testified regarding best practices common in the industry and although anecdotal examples were given by consumer advocates, there were no systemic findings in the franchised dealer new motor vehicle practices. Gramm-Leach-Bliley Act Enacted in 1999, the Gramm-Leach-Bliley Act (GLBA) 33 provides a framework for regulating the privacy practices of a broad range of entities such as banks and mortgage brokers as well as certain motor vehicle dealers. In 2011, the Dodd-Frank Act transferred the GLBA’s privacy notice rulemaking to the CFPB except that the FTC retained authority over the franchised new motor vehicle dealers. 34 The GLBA and the FTC Privacy Rule require a dealer to provide a consumer with a privacy notice describing their privacy policy as well as a consumer’s opt-out of sharing of nonpublic personal information with certain non-affiliated third parties. 35 In addition, the Affiliate Marketing Rule 36 provides that an af- filiate of a motor vehicle dealer that receives certain information about a consumer from the dealer may not use that information for marketing purposes, unless the consumer is provided with an opportunity to opt out of that use. 37 The Privacy Rule also requires that the privacy notice describe how the dealer protects the collected and retained nonpublic personal information. 38 The FTC also issued the “Safeguards Rule,” effective May 23, 2003, as a part of its implementation of GLBA. 39 This rule requires a dealer to develop a written information security plan to protect customer information. As a part of the plan, each dealer must identify and assess the risks to customer information at the dealership; implement a program to safeguard customer’s information and regularly monitor and test it; select appropriate service providers to implement the dealership’s safeguards; and adjust the program, as needed. The FTC Privacy Rule obligates a dealer to create and distribute a Privacy Notice to customers advising about the types of information the dealership collects and the dealership’s policy for sharing that information; whereas, the Safeguards Rule requires a dealer to insure that a customer’s confidential informa- tion is secure and protected against unauthorized access.  FTC — CONTINUED FROM PAGE 33  FTC — CONTINUED ON PAGE 36