Like in Monopoly, one false move and it’s ‘go directly to jail’

Mike BoolosAvoiding the possibility of jail time or a huge fine is a matter of knowing what federal regulations govern the operations of your  F&I office and making sure your employees are following them. To answer the following question, “How compliant are you with federal regulations for your dealership?” regular audits are a must.

Unlike Monopoly, we are not exchanging fake money and moving a figure to a spot on the game board. This is real life, real money, real people and for many of us, everything we have worked for. Now, I know for some of you the list below will seem daunting and scary. But when followed, it becomes a “proceed to Go and collect $$$ card.”

This is a partial list of what you need to have a working knowledge of to keep out of trouble:

1. Red Flags Rule:

  • Fines up to $3,500 per violation. If the violation is not corrected, a $16,000 per violation fine could be given for not complying with the rule.
    • mandatory effective date;
    • guidelines for installation;
    • individual responsibilities.

   2. Gramm-Leach-Biliey Act

This act has two main parts: The Privacy Rule and The Safeguards Rule. Does your staff know and understand what is expected of them regarding these regulations?

3. Regulation Z

This can carry both civil and criminal penalties of not more than $5,000, a year in jail or both. It’s one of the largest and most detailed of all the federal regulations.

4. The Office of Foreign Assets Control (OFAC)


     Penalties are harsh for this one:

  • up to 30 years in jail and fines up to $10 million against corporations;
  • $5 million against individuals and civil penalties up to $1 million per incident.

     You had better be checking this one and maintaining strict adherence.

5. Equal Credit Opportunity and Regulation B

Do you know the notification and retention requirements?

6. Patriot Act

This was enacted in 2001 in response to the attacks on 9/11.

7. Form 8300

Not just reporting $10,000 in cash, but timelines and other factors you have to adhere to.

This is just a partial list of many of the federal regulations and law that affect your F&I business. Over the next few weeks, I will address each of them individually. As new and updated areas of compliance come along, we will explore what you need to be aware of with them. So join in the “blogosphere” with me by responding with questions you may have concerning the effect these areas could have on your dealerships. 

Please e-mail me or Powersports Business with questions or topics that you would like me to discuss in upcoming blogs


  1. Mike, what is your e-mail address? Thanks! Monty

  2. Monty: Mike’s e-mail address — as well as all the bloggers —  can be found by clicking on “authors,” which can be found on the left hand part of your page under the “Pages” menu.

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