Compliance: Boundaries For The Wise F&I Manager
F&I professionals attend educational events to gather the latest information on a variety of topics that help them take care of their part of the business, including dealer agreements, merchant agreements, subscriber agreements and federal regulations.
While these agreements and regulations represent common concerns for the F&I function, not all of them fall within the F&I manager’s sphere of influence. Regulations are a case in point. It seems F&I managers feel the weight of the world is on their shoulders when it comes to compliance issues.
When I talk about the Safeguards Rule in F&I seminars I am still often amazed to see the faces of my students turn pale, their pens moving furiously across the page to record a long “to do” list in order to comply with the rule. These managers return to their dealerships armed with all the whys and wherefores and become uneasy when their recommendations are not treated with alacrity.
As I advocate for full compliance, I also remind students that while their dealerships may fall short of that mark, it does not mean there is no intention to follow the rules. I encourage F&I managers to record their concerns as we review the regulations so they can address them with the general manager or owner after the training. I emphasize that although it is appropriate for an F&I manager to provide information for dealership management, the ultimate responsibility for regulatory compliance resides with the general manager and owner.
F&I managers are wise to be concerned about their dealership’s compliance policies and procedures. They are equally wise to recognize that their accountability is limited to their own actions and compliance measures within their department, namely:
* F&I managers have a direct responsibility to make full disclosures of all documentation and to accurately present the customer, the deal structure, and the vehicle to the lender. F&I professionals should not misrepresent any aspect of the deal to anyone, for any reason, at any time.
* F&I managers have a duty to handle customer information carefully, discretely and confidentially. The law requires it and good business practice dictates it. Our customers are entitled to have their non-published information (NPI) protected and secured. F&I office doors and filing cabinets must lock. F&I computers should log off when not in use and employ password protection.
* F&I professionals should share the knowledge they gain through education. Once that knowledge is imparted, it is incumbent upon senior management to decide how to use it.
If you are an F&I manager, remember that educators give you all the facts, which at times can seem overwhelming. The reality is that most of these facts simply represent sound business practice. When something comes to your attention that falls outside of your area of responsibility, the wise course of action is to defer to senior management.
World of Special Finance, March 2006, p.20