Archive November 2021

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Can a Dealer Require ACH Payments as a Condition of Granting Credit?

An Automated Clearing House (ACH) payment is a form of an electronic funds transfer and cannot be required as a condition of granting credit. The use of preauthorized electronic funds transfers for payments is regulated by Regulation E, 12 C.F.R. §1005.10. An “electronic fund transfer” (EFT) generally refers to a transaction initiated through an electronic terminal, telephone, computer, or magnetic tape that instructs a financial institution to credit or debit a consumer’s asset account.

Checking the Right Box on the Odometer Statement

TIADA recently had a dealer reach out to our attorney referral service due to an issue with the odometer of a vehicle they sold. The dealer knew the odometer was inaccurate and did a standalone odometer disclosure statement, as TIADA recommends dealers do even when the vehicle is exempt from odometer disclosure requirements due to age. Everything would have been great, and this would have been an easy win in court. However, the dealer inadvertently checked the wrong box on the odometer statement. Hopefully, this article will help you avoid the same mistake.

New FTC Rule on Document Retention Affects Dealers

For years, dealers had a plan for disposing of documents, but recent FTC rule changes have made it time for dealers to come up with a new plan. For example, a dealer recently reached out to TIADA’s compliance consultation service for advice on how long to keep denied credit applications.

The Infrastructure Bill's Potential Impact on the Industry

The White House signed H.R.3684, commonly referred to as the Infrastructure Bill, into law on Monday, November 15, 2021. The engrossed bill totals over 1000 pages and features many different policy initiatives, including ones related to vehicles, roads, rails, broadband internet, and pipes.

Are Dealers Legally Allowed to Use Electronic Signatures?

Some dealers are considering using electronic signatures. Electronic signatures are generally allowed under Texas and federal law.

TIADA Monitors New Temp Tag Rules

Last week TIADA attended the TxDMV Board Meeting, where the department laid out several new rule proposals. This included its proposed rule related to HB 3927, which will establish a maximum number of temporary tags a dealer or converter may issue in a calendar year.

Convenience Fees on Motor Vehicle Retail Installment Transactions

A convenience fee is a charge imposed for the privilege of making a payment using a method that is not standard for the company (e.g., credit card payment over the internet). Section 348.108 of the Texas Finance Code lists all the authorized charges for collecting debt on a retail installment contract.

Are You Obligated to Replace Defective or Deployed Airbags?

Due to the inventory shortage, many dealers have inquired as follows: “Am I obligated to replace defective or deployed airbags on a used car before selling the car, and do I have any liability if an airbag on a used car I sell fails to properly deploy in an accident?”