The Match Game for Compliance

Many people have fond memories of elementary school where they completed exercises in their “Think and Do” booklets and in other such publications.  A common exercise was matching pictures with words, or words with their definitions.  In the 1960s, the Match Game was a popular nationally televised game show where a participant attempted to match a particular answer to a general “fill in the blank” question.  Correct matches yielded points to the contestant.  In a sense, dealers must also match their compliance efforts with the expected questions and issues prosecuted by regulators.  In other words, dealers’ compliance programs should be mindful of the most likely legal targets and prepare accordingly.  With the shift in political leadership, dealers can expect much more regulatory and enforcement actions.

A Dealer Compliance Caveat

Dealers face voluminous and sundry regulations.  In no particular order, here is only a short list of these laws or “car law”:

NHTSA Regulations, IRS – Sales Incentives, EPA Emissions, Written Warranty, Patriot Act, Cash Reporting Rule, Credit Reporting, Can-Spam Act, Information Privacy, FTC Privacy Rule, Telemarketing Sales, Truth in Advertising, Clean Air Act, Clean Water Act, DOT Hazardous Materials, LIFO/FIFO, OSHA, Resource Conservation, IRS Inventory Valuation, EPA Hazardous Waste, VIN & Parts Marking, Office of Foreign Asset Control (OFAC), Federal Trade Commission Act, Federal Arbitration Act, Automobile Information Disclosure Act  (Monroney Labels), Modern Class Actions Rule, Truth in Lending Act (TILA), Reg M and Reg Z, Fair Credit Reporting Act (FCRA), Federal Odometer Act (FOA), Equal Credit Opportunity Act (ECOA), Magnuson-Moss Warranty Act, Holder Rule, Credit Practices Rule, Do-Not-Call, Fax, or Email laws, Gramm-Leach-Bliley Act (GLBA), Red Flags Rule, Dodd-Frank Act, State Retail Installment Sales Acts, State Consumer Leasing Acts, Civil Theft and Fraud Acts, Civil RICO, State Unfair Acts and Practices (UDAP), Age Discrimination, Revenue Recognition, ADA, Harassment, COBRA, Workmen’s Compensation, Equal Pay Act, Immigration Act, FMLA, Child Support, Drug Testing, Wage & Hour issues, Labor Laws, Auto Labeling Act, Credit Card Processing, , DOE/EPA Mileage Guide, Used Car Rule, and so forth.

This list is most daunting and the reality is that even the most observant dealer will fail in observing all these laws.  Dealers must always make their best efforts in this observation and document these efforts.  This documentation is a legal defense should a dealer be subjected to an investigation about the matter. However, dealers should carefully consider the government’s impending hit list of concerns.

First, the Old Hit List

Regulators will continue to prosecute cases such as payment packing, advertising, lease fraud, and deceptive spot delivery cases.  In addition, they will examine the compliance of dealers pertaining to the list of regulations itemized above. The bottom line is, quite simply, what regulators have done in the past, in prosecuting dealers, is what they are going to be doing now and into the future. Regulators are remarkably imitative. For example, if one state attorney general investigates a matter other attorneys general will follow that lead, as will private attorneys.  Dealers should always be cognizant of these regulator trends.   However, regulators will be targeting certain issues on their new hit list, as these may be the shiny new objects.

The Impending New Hit List

The new leaders of the CFPB and FTC will establish the agenda for dealer prosecutions. State governmental agencies will take the cue from the federal agencies and emulate these activities. As dealers may recall, for example, the CFPB, during the Obama administration, targeted fair lending utilizing the concept of disparate impact. Richard Cordray, the CFPB’s Executive Director during those years, identified the CFPB’s mission as policing the “Four D’s:” discrimination, deception, debt traps, and dead ends. These policies will return with great force and determination by government regulators.

There will be three major foci of the CFPB and FTC:

Fair Lending and the Reserve

An avowed objective of the Biden-Harris administration is to eliminate discrimination and pursue an agenda of equity.  The pursuit of equity is to achieve similar results for all consumers. Regulation by enforcement and regulation, unto itself, will be the means to this end. For example, an attempt at applying the disparate impact theory, in a new way, could return.  Moreover, regulating, or possibly eliminating the reserve, may be attempted.


Abolition of arbitration for consumer disputes will be an objective.  As a corollary, arbitration will be tested in the courts often.

Voluntary Protection Products

As with fair lending, the sale of these products will be investigated rigorously.  How they are priced, presented, and sold will be the subject of much scrutiny.

In addition, the concept of remediating climate change will color all these investigations.  How this evanescent goal will affect these other objectives is completely uncertain. 

Getting the Matches Correct and Winning the Game – Avoid Being Hit

Dealers should match protocols with these potentially serious issues.

Fair Lending and the Reserve

The match game strategy here is to pay very close attention to the announcements and actions of the FTC and the CFPB and respond accordingly. Discrimination and fair lending will be major initiatives as was evident in the FTC’s recent Bronx Honda case.  Dealers should review their current policies and discuss them with their attorneys for direction.  


Dealers should revisit the arbitration provisions in their documents.  First, the language should be consistent in all consumer-facing documents such as buyer’s orders and retail installment sale contracts.  Secondly, the arbitration language needs to be fair for both the dealer and consumer.  One-sided arbitration provisions may fail to be enforced.   

Voluntary Protection Product Policy

The match here is to implement a program such as the NADA’s Voluntary Protection Product Policy.  Dealers need a written policy and a protocol for the sale of these products. 


To paraphrase a famous statement from Palsgrafversus Long Island Railroad Company, the preeminent torts law case: “The risk to be perceived defines the duty to be obeyed.” Dealers may wish to match legal challenges with their remedies before they materialize.

Terry O’Loughlin, J.D., M.B.A., director of compliance for The Reynolds and Reynolds Company, has nearly 30 years of legal and regulatory experience in motor vehicle-related fields. From 1989-2006, O’Loughlin served with the Florida Office of the Attorney General, investigating and prosecuting automobile dealers, manufacturers, and financing and leasing companies. He led a task force that examined more than 100,000 motor vehicle files and settled with over 1,600 vehicle dealers for more than $15,000,000.00. O’Loughlin helped to draft and served as mediator of Florida’s Motor Vehicle Lease Disclosure Act. He has served as a consultant to the Federal Reserve Board’s Leasing Education Committee and has routinely advised numerous states’ agencies on motor vehicle fraud. Admitted to both the Pennsylvania and Florida Bars, O’Loughlin graduated from the University of Pittsburgh and received his graduate degrees from the University of Dayton.