The IARA’s Compliance Committee’s primary mission is to foster discussion within the remarketing industry by leading engaging discussions of legal, regulatory, and ethical compliance matters.
The remarketing industry is rapidly changing amid emerging technology, and it can be difficult to keep up with the regulatory changes that affect the vehicle wholesale remarketing channel.
An Active Team
The committee consists of five co-chairs, IARA past president Jeannie Chiaromonte, (Bank of America), Keely Smith (Auto IMS), Tim Meta (Fifth Third Bank), Andrea Amico (Privacy4Cars), and Bob Sullivan (ServNet Auction Group). Each of the members actively participates, and Smith says they engage in a lot of back-and-forth talks. Smith noted Sullivan is primarily responsible for finding speakers for the group to hear on various related topics.
The committee also consults closely with IARA attorney Jim Demetry who advises them on the detailed points of compliance and the development of compliance modules that help members better understand how to apply rules and regulations to their operations and businesses.
The committee is an offshoot of the Standards Committee. “I think there probably were compliance related issues that were being discussed under Standards and it just started to become more voluminous and occupying a lot of that committee’s time,” Smith said.
The IARA needed a committee that could provide more focus on compliance issues such as increased requirements placed upon finance companies. Those finance companies are now imposing many rules on their vendors because of the regulatory issues. This includes more regular inspections of vendors tomake sure they’re doing what they saying they are doing or helping them gain compliance.
There are many complex issues involving the responsibilities of vendors to lenders, since vendors and lenders are not regulated the same way. The committee works closely with everyone to help them all comply. It also strives to understand the core issues industry members face and find common ground and suggestions.
Service As A Resource
Smith said the committee extends the presence of the compliance function beyond IARA membership. To improve and standardize the industry, automotive finance companies, repossession agencies, and auctions participate in discussions to represent the voice of the consigner. “I would say we serve as an informal advisory resource.”
As compliance related matters are discovered that may not be widely known, particularly on the auction side, the committee explores and provides guidance to smaller entities and agencies who lack the experience of finance companies or banks.
“We want to help facilitate that communication process.” Smith said. Members of the committee serve as a resource for all remarketers, regardless of IARA membership status. Smith handles compliance matters within her company and frequently receives calls from remarketers who have compliance related questions.
“If we have mutual clients in common, it makes sense for me to assist them with questions, especially regarding how Auto IMS (Smith’s employer) interacts with their auction software and auction personnel,” she said.
Smith says the committee works closely with the Standards Committee because many issues cross over with some of the functions of that committee. Looking ahead, the two committees will be working closely on the topic of electric vehicles and repairs, as well as the standardization of remarketing electric vehicles.
The committee enlists the expertise of the IARA attorney, Jim Demetry, to ensure the information is gathered and disseminated properly and timely.
One example of progress is a categorized auction checklist that guides auction houses that was put together by Smith with help from Cindy Mitchell from BSC American Auction House and Demetry.
The regulatory landscape is rapidly changing as government agencies that oversee consumer behavior, financial services, and bank behavior seek to provide more transparency and privacy protection for consumers.
Specifically, the Consumer Financial Protection Bureau was created in 2011 to make sure consumers are not taken advantage of. People must be treated fairly, and lending must be done equally. Collections must also be performed equally. There has been more oversight of banks and finance companies that raise more compliance issues.
Over the past few years, states have implemented or modified their own regulations that must be adhered to to avoid problems with the State Attorney General. The Compliance Committee has seen more members requesting help with compliance matters including fair lending practices, email security, onsite visitors, background checks, data storage, password policies, firewalls, and data security.
As consumer privacy concerns increase in a technology driven society, there are compliance concerns with customer data printed on written documents and how those documents are stored. There are rules about storing printed matter with sensitive details and the committee even addresses paper shredding policies. For example, copies of driver’s licenses that may have been required as part of a transaction may not be stored on paper and must be shredded or stored electronically.
Electronic information storage raises cyber security concerns. Consumers expect their personal data will be safely protected and that efforts have been made to prevent data breaches. These concerns have generated an increase in requests for information and guidance from the committee. In the absence of the committee, companies would need a full-time person dedicated to compliance.
The committee has a goal of increasing engagement and participation. As technology spurs changes in the remarketing industry, the committee will remain focused on educating the industry about complying with privacy issues with respect to printed data storage as well as personal data such as phone contacts, garage codes, and GPS locations stored in onboard computers.
The committee is working on improved methods of communications of relevant information to help small, independent auctions remain in compliance. More speakers will share information with the committee about matters such as recalls and title processors, as well as the unique compliance issues they face.
Note: This article appeared in the IARA 20th Anniversary Commemorative Issue published in November 2021.