Legal Compliance

As compliance questions arise, we provide the resources for answers.

These documents are intended to explain, as well as provide compliance information. They are not intended to address the specific facts and  circumstances of every motor vehicle dealership. Specific applications will vary depending upon how a motor vehicle dealership transacts business.

The Federal Trade Commission and the federal  financial institution regulatory agencies have published  final rules on identity theft “red flags” and address discrepancies. The Final Rules  implement sections 114 and 315 of the Fair and Accurate Credit Transactions Act of 2003.

We have developed materials to assist  Dealers in  complying with the Rules. These materials are being provided  to you for  distribution free of charge.

• An Overview of the Red Flags Rules
• A copy of the Rules
• Guidelines to assist your dealership in analyzing identity theft red flags and developing a written program;
• A model written dealership policy for the detection, prevention and  mitigation of identity theft;

Please keep in mind that these materials are  designed to  assist dealers in the development of a written dealership  policy for the  detection, prevention and mitigation of identity theft  and are intended  to serve as a guide. While not intended as a universal  solution that  every dealership can adopt, since they are drafted from a  used motor  vehicle dealer’s perspective, NIADA members should find  that they are  easy to use and customize for their dealerships. They may wish to  consult with their legal counsel or other professional  consultants to  ensure that their dealership policies are appropriate  and in compliance  with applicable federal and state laws, rules and  regulations. The information contained in this document and the  additional materials  provided are for general information purposes only  and should not be  considered as legal advice.

Executive Anti-Terrorism Order – Verify Customer I.D. & Check Blocked Persons List
With so much attention being directed toward  the rules evolving under the Patriot Act, the requirements under  Presidential Executive Order 13224 are often overlooked. The Executive Order prohibits U.S. citizens from entering into any transaction or dealing with individuals or entities identified either in the Executive Order, by the Department of Treasury or by the Secretaries of State as  posing a significant risk of committing terrorist acts or providing support to these organizations or individuals. The Office of Foreign  Asset Control (OFAC) maintains an alphabetical master list of Specially Designated Nationals and Blocked Persons. Individuals who violate the Order by entering into a transaction with a blocked person or entity can be fined up to $250,000 and serve up to 10 years in prison, while companies can be fined up to $500,000.