2. Regulatory Update: Where Do We Stand? Lewis D. Kuhl Attorney at Law Kurkin Forehand Brandes LLP

3. Regulatory Framework Dodd Frank Act The Magnuson-Moss Warranty Act FTC Act and Regulations State Warranty and VSC Acts and Regulations State Insurance Regulations State UDAP Acts State Lemon Laws State UCC’s State MVRISA’s State Attorneys General

4. Product Terminology Retail Installment Sales Contract (RISC) vs. Loan GAP Waiver vs. GAP Insurance Warranty vs. Service Contract Insurance vs. Non-insurance Terms –Coverage vs. Contract Terms –Premium vs. Enrollment Charge/Purchase Price –Contract vs. Policy

5. Dodd Frank Act Creates the Consumer Financial Protection Bureau (CFPB) Exempts some motor vehicle dealers Rulemaking/enforcement of consumer laws (TILA, ECOA, FCRA, FDCPA, GLB) Consumer Financial Products Covered Person – any person providing a consumer financial product (banks, credit unions, captive and independent finance companies) Regulation of Supplemental Products Unfair and Deceptive Acts and Practices Continuing to evolve – stay tuned – reg’s on F&I products

6. Magnuson Moss Warranty Act Requires manufacturers and seller to provide consumers with detailed information about warranty coverage Does NOT require a written warranty – if in writing must comply with the Act Does NOT apply to oral warranties Applies to consumer goods – not services Dealer provided warranty Used Car Buyer’s Guide is not a warranty Lifetime Warranties. Seller is obligor. Tie in sales provisions not allowed unless product or service required to make product work, FTC prior approval or free of charge

7. Privacy Part I - Privacy Rule –privacy notices - opt out rights - limits use and disclosure of nonpublic financial information –Affiliate – Non-Affiliate issue Part II - Safeguards Rule –mandates security and protection of nonpublic financial information –Includes service providers - contract Revised Privacy Notice State Data Security Laws Impacts VSC Administrators Recent Enforcement Actions

8. Fair Credit Reporting Governs the use of consumer’s credit information Regulates “firm offer of credit” “Permissible purpose” to pull credit Document Disposal rules Risked Based Pricing FCRA Privacy Notice Dealer miss programs Direct to Consumer

9. Equal Credit The purpose of the ECOA is to promote the availability of credit to all creditworthy applicants without regard to: –Race –Age (provided the applicant is of legal age) –Sex –Color –National Origin –Religion –Marital Status –Income Derived from Public Assistance Concern is with the offering of supplemental products to all.

10. Truth in Lending Reg. Z implements and helps to interpret and understand portions of TILA. Both TILA and Reg. Z require specific term and cost disclosures in order to promote the informed use of consumer credit. Reg. Z also provides a foundation for consumers to compare various credit costs. Reg. Z applies to every creditor that extends consumer credit under the following four conditions: –The credit is offered or extended to consumers –The offering or extension of credit is done regularly –The credit is subject to a finance charge, or is payable in more than four installments –The credit is primarily for personal, family, or household purposes Does not apply if amount financed exceeds $50,000 (now $51,800)

11. Unfair and Deceptive Acts FTC Act State UDAP Acts Prohibits unfair and deceptive acts and practices Enforced by CFPB, FTC and state Attorneys General Applies to supplemental products sold by dealers – product disclosure Payment packing Advertising – “pay off your trade” Sale of VSC on car that was not eligible - TX

12. State Issues and Activity NY – PDR and Windshield Repair – Filing Price KY – VSC not insurance – can include in cash price PA – Removed price cap – can still review/investigate complaints OH – clarified that GAP can be on RISC NE – protection products not insurance – revised form filing FL – Filing price/Refund guidelines

13. Other Items Data Security Finance Company Approval of Products Refunds Licensing of Sales Representatives Advertising Issues Merger/Integration Product Pricing/Forms Filing Direct to Consumer VSC and GAP State Model Acts

14. Solutions Product compliance Current Forms Relationship with dealers Training Education

15. Questions

16. Thank You Lewis D. Kuhl Kurkin Forehand Brandes LLP Attorneys at Law 18851 NE 29 th Avenue, Suite 303 Aventura, Florida 33180 (305)929-8500 lkuhl@kfb-law.com www.kfb-law.com