Compliance matters – maybe now more than ever

By Myril Shaw

The Senate recently narrowly approved President Biden’s pick, Rohit Chopra, to run the Consumer Financial Protection Bureau. News outlets say the confirmation gives the bureau a director who is likely to embrace an aggressive “watchdog” role as a consumer advocate, and one who favors stiff penalties for bad actors such as predatory lenders.

Like it or not, this is not a political statement – it is a reality statement about today’s business climate. If you are a dealer who handles personally identifiable information and who could be responsible or accountable for identity theft or identity fraud, you need to be aware that the government is now once again very actively involved in looking at all potential compliance issues.  Even without the government concern you should care about an area that has seen a dramatic increase over the last couple of years – identity fraud is a real problem.

Now, let’s go a step beyond that. We know of one dealer who, had they not been diligent in their OFAC processing (cash deals less than $10,00), would have suffered potentially crippling fines and penalties.  The rules about checking for OFAC includes, even for cash purchases less than $10,000 are no joke.

With an active CFPB, an incremental increase of both actual and synthetic identity fraud, and an increase in OFAC named individuals/entities (especially in the area of drug cartels), the risk of falling afoul of compliance standards is VERY high. You can ignore this or you can protect yourself.

Do you have the full set of Compliance documents (Red Flags, Disposal, OFAC, Safeguards, and USA Patriot Act)?  Do you have a trained Compliance Officer? Are you physically compliant? Are you doing regular inspections to make sure that compliance standards are being followed and that compliance is top of mind among your team?

Compliance is not just important to prevent legal issues and huge fines, compliance is good customer service. You should have signs around your store saying “We care about you and your privacy,” “We protect your identity,” “You are safe doing business with us,” and more. You need to let customers know that you care about them and their identity. 

Caring about compliance, and being able to demonstrate and document that compliance caring can save you millions of dollars and even some potential jail time. And it can also add customers who know you care. 

Compliance is not a head-nod. It cannot be dismissed with a simple “Yeah, I know we should be doing these things.” Compliance has serious implications, and it also means you are serious about exemplary customer service.

Myril Shaw is the COO of Dealer Profit Services and a member of the Boating Industry Top 100 Leadership Alliance.