Since there seemed to be some differing opinions from the "experts" on how a dealer could assure compliance with these rules, we went directly to those enforcement agencies for advice and clarification of the rules. We then applied their recommendations to our training. Then, in 2010, the rules were updated and clarified when Congress passed the Brownback Amendment to the Dodd-Frank Act which specifically carved out a special exemption giving sole enforcement and rule making authority regarding motor vehicle dealers to the FTC. Subsequently, the FTC clearly defined deceptive practice (and “payment packing”) with a clear definition of proper disclosure during TILA regulated financing agreements and payment negotiation. Attorney Generals agreed and have also determined that not doing so is a deceptive practice. “The FTC has determined that the Truth in Lending Act requires that, when the customer negotiates a payment, before they agree to a final payment, (they call it consummation) they must be given “written disclosure” of certain terms of the agreement such as APR, monthly payment amount, length of the loan and a full, written disclosure of the payment before any add-ons were included in the payment calculation”. By far, the most effective process is still to separate F&I from the sale of the vehicle. “F&I is a completely different process than selling a car. What we have learned is to allow the F&I process to evoke the positive, security driven motivators that cause people to buy F&I products and create top performance. The F&I process must be perceived by the customer as a separate, isolated function from the sale of the vehicle” Having the sales department use a base payment disclosure to negotiate and then do a proper turn to a professional F&I manager has become an integral part of our process because it makes the whole process produce, by far, more income, enhances the customer’s experience, and oh, as an added bonus, you never have to worry about someone saying you weren't honest or that the proper disclosures weren't being done. I am not an attorney and this is not legal advice. Dealers can make their own determinations as to how risky this practice is in their stores. But after working with enforcement officials in the past, I am quite sure that the practice of including F&I and ancillary products to the negotiated payment will be clearly seen as a deceptive practice by enforcement types, no matter what our opinions are. I understand that some people would like to speed up F&I, eliminate a step, (maybe eliminate those F&I commissions), and truly believe they can do it without deceptive practice. But there was a reason the industry took the F&I functions out of the sales process and created the F&I department. It’s because the F&I process is a critical function in terms of compliance, efficacy, and production. And it should be conducted by trained professionals. It is simply, a better way of doing things. 15

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