A lot can change in 15 years. Just ask Michael Benoit, Chairman of Hudson Cook, LLP.
“It used to be difficult to get a meeting with dealers to talk about compliance because it had never been a big issue,” says Benoit. As an attorney who serves the automotive industry, he likes to use a driving analogy to illustrate dealerships’ long-held views toward compliance: “If I’m speeding but I don’t get caught, am I really speeding?”
Following the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act, and the Obama administration’s increased focus on finance law enforcement, dealerships and their capital providers now know what speeding looks like. These days, most organizations have learned to accept the serious consequences associated with non-compliance—consequences that include penalties, employee turnover, lawsuits, reputational damage, and more.
But just as F&I professionals were getting used to the status quo, the automotive industry has entered another period of upheaval, spearheaded by an administration taking a very different approach to regulation. President Trump aims to enact his agenda swiftly and boldly, through a reverse “2-for-1” approach in which 2 existing regulations are repealed for every new one passed.
While the new administration’s decisions have thus far left dealerships and lenders guessing, Benoit has been there before.
“I’m likening what will happen to what happened when the Reagan Administration came in,” the attorney says. “There was a distinct change in the regulatory environment in this country from the Carter administration to the Reagan administration, and I think we’re going to see that kind of metamorphosis.”
The next few years of metamorphosis may entail significant changes for the automotive industry. Benoit believes the bar will be higher for enforcement actions. Elements of Dodd–Frank, including the Consumer Financial Protection Bureau, may be replaced, or repealed entirely. But the president can’t make these changes alone, without Congressional approval, and supporters of regulations are prepared to put up a fight.
There’s never been a better moment to start paying attention to politics—and to adopt a smart approach to workforce compliance. When regulations are changing by the day, auto lenders need to take appropriate measures to keep up.
Wondering what regulatory changes are in store? Compli would like to welcome you to join us and Michael Benoit for “Fair Lending in the Trump Era,” a free webinar on February 28th. Over the course of an hour, we will cover the latest regulation and compliance news straight from Washington, D.C.; what these changes mean for your business; and what you need to do in response to the changes. For more information, click here.