Dealers struggle to keep up with government regulations

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Government regulations are being enforced now more than ever, so boat dealers should know how to be compliant or they risk thousands of dollars in fines and in some cases jail time.

“We’re seeing an increase in dealers calling us and saying, ‘I need information on these types of deals,’ ” Priority One business development director Jared Zimlin told Soundings Trade Only. “We used to get calls maybe two or three times a year. Now we get called monthly.”

States have gotten stricter about cracking down on businesses and enforcing regulations that in many cases have been on the books for years, Zimlin said.

“Each state is looking at different things, so it depends on what they’re looking for,” Zimlin said. “If they’re auditing for disclosure, they’re going to be looking at certain things; if they’re auditing for identity theft, they’ll be looking at different things.”

For example, many dealers are surprised to hear that they have to file specific paperwork with the federal Office of Foreign Assets Control when they are paid in cash, Zimlin said.

Zimlin, who spoke in a panel on finance and insurance at the Marine Dealer Conference & Expo in Orlando, Fla., last month, said dealers were surprised.

“There were dealers at the MDCE that came up to me after the panel — and big dealers, too — and were surprised they had to do this with cash customers for any sales transaction, particularly of a titled vehicle,” Zimlin said.

Privacy rules have gotten extremely stringent. And often dealers don’t know that they can’t negotiate terms by tying finance terms to a deal.

“A lot of times dealers try and upsell a person by saying, ‘I can give you a better rate if you buy a better service contract,’ ” Zimlin said. “You can’t do that. You can’t tie the terms of any product to the rate.”

A rate can change because an upsell bumps the terms into the next bracket, but the dealer must be honest about the reason.

The Marine Retailers Association of the Americas is trying to help members become compliant with a manual that Zimlin helped write.

“We’ve had a number of new members tell us that this book alone is worth far more than their investment in dues,” MRAA president Matt Gruhn said in an email. “It’s very thorough, but the beauty is that it really narrows down the full regulations to only the part that applies to marine dealers. And then it shows them how to be compliant.”

The undertaking can seem daunting, but Zimlin says that as long as dealers are making an effort to address regulations they should be in the clear.

“But what a dealer shouldn’t do is get scared about the word compliance and put his head in the sand,” Zimlin said.

— Reagan Haynes

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Comments

3 comments on “Dealers struggle to keep up with government regulations

  1. Bill

    What a terrible article. Nowhere in the article does it mention dealers “struggling” to keep up with regulations. Then it ends with a sales pitch for a book some guy wrote that supposedly helps these dealers keep up on the regulations. It’s stuff like this that gets people all wound up over very trivial things.

  2. David

    He does not sell this book…it is free if you are an MRAA member. And he is right Compliance is something very few dealers are doing today. This is a ticking time bomb for our industry

  3. Matt Gruhn

    The publication is a free resource for MRAA members, so I don’t think was as much a sales pitch as it was a nod to some free information and assistance that is available. We have been to numerous industry functions where this topic was front and center, including the National Marine Bankers Association Conference this fall, and this compliance issue is a big threat to dealers as much as it is to the lenders. The penalties can be very severe. I’m happy to share more information with you on the publication itself if you’re interested. matt@mraa.com or 763-315-8043.

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