SC IMF UPDATE

Updated Infrastructure Maintenance Fee (IMF) procedure

The following information is an update on the department’s new IMF form, potential exemptions, IMF refunds, as well as Bill of Sale. IMF is to be paid at the time of titling and registering a newly purchased vehicle unless an exemption applies. The IMF is 5% of purchase price, not to exceed $500. In addition to the IMF, there are fees associated with titling and registering the vehicle, as well as property taxes.
Updated IMF Form
The South Carolina Department of Motor Vehicles has implemented a change of form associated with the IMF. The new form, TI-IMF, replaces TI-002T effective immediately. This new form is only to be used for reporting and submitting payment of the IMF collected for sales to government agencies, commercial fleet, commercial vehicles, and out of state purchases. Commercial vehicles additionally need a commercial insurance policy.

Exemptions
Sales of motor vehicles to non-resident active duty military personnel. This exemption does not include motor vehicles designed primarily to carry property such as trucks (with an empty weight of greater than 9,000 lbs. and a gross weight greater than 11,000 lbs.) cargo vans or motor homes.
IMF Payments & Refunds
The retailer is still required to remit the IMF within 45 days from the date of sale.
A signed Bill of Sale/Buyer’s Order will be required for all title transactions showing the total sale prices of the vehicle, minus any trade-in value. This requirement is listed in SC Code: 56-3-627(C) (3).
Customers bringing in a leased vehicle to SC that is registered out-of-state, will be required to pay the $250 move-in fee, unless they meet authorized exemptions.

If a customer leased a vehicle and eventually buys the vehicle through the lease to own option, the customer does not have to pay the IMF a second time as long as the registration stays in that customers name. The owner can add a name as long as the previous owner’s name remains of the title/registration.

When the department, through error, collects any fee not required to be paid, please email your request to cartaxes. The refund request must be made within six months after the date of such overpayment to receive a refund. Requests for refund submitted after 180 days will not be processed.

Kat Messenger
Carolina Dealer Training

This email message and any attachments contain information which may be privileged and confidential. If you are not the intended recipient or have received this transmission in error, please notify the sender immediately and destroy all electronic and hard copies of the communication, including attachments. Any disclosure, copying, distribution or use of this information is strictly prohibited. Please consider the environment before printing this e-mail.

NC DEALER RENEWALS

NC DMV had a delay in mailing out license renewal packets. January renewals were mailed out last month, so if you haven’t received yours you should soon. February renewals will be mailed out mid-January, and March renewals will be mailed late January.

Kat Messenger
Carolina Dealer Training

This email message and any attachments contain information which may be privileged and confidential. If you are not the intended recipient or have received this transmission in error, please notify the sender immediately and destroy all electronic and hard copies of the communication, including attachments. Any disclosure, copying, distribution or use of this information is strictly prohibited. Please consider the environment before printing this e-mail.

NC INSPECTION NEWS

​RALEIGH – Beginning Dec. 1, North Carolina’s vehicle inspections requirement will exempt vehicles 20 years old from obtaining a yearly emissions test in the 22 counties which emissions testing is required.

For example, a 1999 model year vehicle would be exempt from obtaining an emissions inspection starting Dec. 1. The following year a 2000 model year vehicle would be exempt from obtaining an emissions inspection.

The change came about as a result of the passage of Senate Bill 131 (Regulatory Reform Act of 2016-2017). The bill was signed into law in 2017 and then approved by the Environmental Protection Agency. The 20-year rolling inspection is outlined in N.C.G.S. 20-183.2(b)(3).

By law, a motor vehicle must pass an annual safety inspection before it can be registered in North Carolina or the registration can be renewed. All North Carolina counties still require the safety inspection.

Emissions inspections are still be required in 22 counties and will still be required for vehicles under 20 years old, starting Dec. 1. Those counties requiring emissions inspections include Alamance, Buncombe, Cabarrus, Cumberland, Davidson, Durham, Forsyth, Franklin, Gaston, Guilford, Iredell, Johnston, Lee, Lincoln, Mecklenburg, New Hanover, Onslow, Randolph, Rockingham, Rowan, Union and Wake counties.

Kat Messenger
Carolina Dealer Training

This email message and any attachments contain information which may be privileged and confidential. If you are not the intended recipient or have received this transmission in error, please notify the sender immediately and destroy all electronic and hard copies of the communication, including attachments. Any disclosure, copying, distribution or use of this information is strictly prohibited. Please consider the environment before printing this e-mail.

The CARLAWYER©

By Nicole F. Munro and Thomas B. Hudson

After last month’s next-to-nothing report, things in and around the nation’s capital perked up a bit this month. Here’s our monthly article on selected legal developments we think might interest the auto sales, finance, and leasing world. This month, the action involves the Federal Trade Commission, the Consumer Financial Protection Bureau, the National Highway Traffic Safety Administration and the Department of Justice. As usual, our article features the “Case of the Month” and our “Compliance Tip”.

Note that this column does not offer legal advice. Always check with your lawyer to learn how what we report might apply to you, or if you have questions.

Federal Developments

CFPB Releases Report on Trends in Consumer Bankruptcy. On September 25, the CFPB released its quarterly consumer credit trends report on consumer bankruptcy. The report describes how the volume and types of consumer bankruptcy filings have changed from 2001 to 2018 and the impact of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, and the 2007 recession.

CFPB and FTC to Host Workshop on Accuracy in Consumer Reporting. The CFPB and the FTC will host a public workshop on December 10 to discuss issues affecting the accuracy of both traditional consumer credit reports and employment and tenant background screening reports.

CFPB to Continue Publication of Consumer Complaint Database and Make Enhancements. On September 18, the CFPB announced that it will continue the publication of consumer complaints, data fields, and consumers’ narrative descriptions of their complaints through its Consumer Complaint Database, while also making several enhancements to the database.

FTC Comments on CFPB’s Proposed Debt Collection Rules. On September 18, the FTC submitted comments on the CFPB’s proposed debt collection rules. The FTC’s comments address the agency’s legal authority in the debt collection marketplace, describe its law enforcement, policy, and education efforts to protect consumers from unlawful debt collection practices, and address several topics covered by the proposed rule, including improvements to required validation notices; restrictions related to time-barred debts; passive debt collection; prohibitions on the sale, transfer, or placement of certain debts; collection of debts involving people who are deceased; restrictions on the times and places at which debt collectors may communicate with consumers; restrictions on the types of mediums (e.g., phone number, email, text messaging) through which debt collectors may communicate with consumers; restrictions on the disclosure of information about debts to third parties; and telephone call frequency limits. Required reading for buy-here, pay-here dealers.

NHTSA Establishes Standards for Electronic Odometer Disclosures. On September 17, NHTSA issued a final rule establishing standards under which states may allow electronic disclosures of vehicle odometer readings. Among other changes, the final rule will also require odometer disclosures until vehicles are 20 years old, beginning with the 2010 model year. Previously, sellers of vehicles 10 model years old or older at the time of sale were exempt from the odometer disclosure requirement.

CFPB Releases Latest Supervisory Highlights. On September 13, the CFPB released its Supervisory Highlights, covering examinations (generally completed between December 2018 and March 2019) of activities related to the sale of guaranteed asset protection products, credit card origination and account servicing, consumer debt collection, furnishing of consumer information to consumer reporting agencies, and mortgage origination. Among other findings, examiners found one or more instances of creditors selling guaranteed asset protection products to consumers who would not benefit from the products because the loan-to-value ratio associated with the consumers’ vehicle financings was low. Examiners also found that one or more debt collectors sought interest not authorized by the underlying contracts between the debt collectors and the creditors. In addition, examiners found deficiencies in furnisher compliance with the Fair Credit Reporting Act, including failing to timely complete dispute investigations, failing to provide results of dispute investigations to consumer reporting agencies, failing to timely correct and update previously furnished information, failing to provide timely notice to consumer reporting agencies that information is disputed by a consumer, and failing to implement reasonable written policies and procedures regarding the accuracy and integrity of account information furnished to consumer reporting agencies.

CFPB Settles with Debt Collector. On August 28, the CFPB announced a settlement with Asset Recovery Associates, Inc., a debt collection company. The settlement resolves allegations that ARA violated the Fair Debt Collection Practices Act and the Consumer Financial Protection Act of 2010 by threatening to sue or arrest consumers even though it did not intend to take such action, falsely representing to consumers that company employees were attorneys, threatening to garnish consumers’ wages or place liens on their homes even though it did not intend to do so, and representing that consumers’ credit reports would be negatively affected if they did not pay, even though ARA does not report consumer debts to credit reporting agencies. Under the settlement terms, ARA will pay at least $36,800 in restitution to affected consumers and a $200,000 civil money penalty to the Bureau. The consent order also prohibits ARA from continuing to engage in this conduct and requires ARA to record calls with consumers to help ensure collectors do not make false statements in the future.

FTC Settles with School Operator over Use of Lead Generators. On August 27, the FTC announced a settlement with the operator of several post-secondary and vocational schools for using lead generators that employed false and deceptive tactics. The FTC alleged that the lead generators falsely represented to consumers that the schools were affiliated with or recommended by the military, used deceptive tactics to induce consumers to submit their personal information, falsely told consumers their information would not be shared, and called consumers registered on the National Do Not Call Registry, in violation of the Telemarketing Sales Rule. In addition to prohibiting misrepresentations about the defendant’s products or services, the settlement requires the operator to pay $30 million in consumer redress, review all materials that lead generators use to market its schools, investigate complaints about lead generators, and not use or purchase leads obtained deceptively or in violation of the TSR.

Case of the Month

Usually our Case of the Month involves a reported opinion in a civil lawsuit by or against a dealer. Sometimes, though, we report on enforcement actions by federal or state authorities. This month, it’s one of the latter, and the enforcement action is by a federal regulator we don’t often see in the car sale and financing arena.

This time, the Fair Housing Testing Program conducted by the Department of Justice led to a lawsuit against a Maryland independent dealer. The suit alleged that defendant Guaranteed Auto Sales along with its owner and manager, defendants Kelly Ann West and Robert Chesgreen, respectively, violated the federal Equal Credit Opportunity Act by offering different credit terms based on race to those seeking to buy and finance used vehicles in Glen Burnie, Md.

DoJ said the suit is based on the results of testing the department’s Fair Housing Testing Program, in which individuals pose as prospective car buyers to gather information about possible discriminatory practices.

The complaint, filed in federal court in Maryland, alleges that the defendants engaged in a pattern or practice of discrimination by offering less favorable auto-finance terms to African American testers than white testers. Most significantly, officials said the complaint alleges that employees of Guaranteed Auto Sales told African American testers that they needed larger down payments than white testers for the same used cars, and told African American testers that they were required to fund their down payments in one lump sum, while they gave white testers an option of paying in two installments.

“Using race as a factor in determining credit terms, including the amount of down payment that a customer must pay, is despicable and illegal,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division.

Keep in mind that these charges by the DoJ are just that – charges – and that the allegations still must be proven.

A couple of points: We’ve heard of regulators employing mystery shoppers to make discrimination cases, but so far had seen little evidence of the practice. If, however, anything remotely like these activities is going on at your dealership, you need to consider whether that next “up” might well be a DoJ staffer (or, maybe worse, an Action News reporter with a hidden camera and mic).

This Month’s CARLAWYER©Compliance Tip

Every time your dealership sells a vehicle using a retail installment contract, it is entering into a transaction governed by the Uniform Commercial Code. Parts of the UCC apply to sales (Article 2 of the UCC) and secured transactions (Article 9). These UCC provisions apply even when they are not expressly set forth in the agreement between your dealership and your vehicle buyer. Most UCC provisions can be varied by agreement between the parties, but others cannot. Do you know the basics of how the UCC affects your transactions and the rights of your dealership and your buyers? A brief outline memo to your Compliance Officer from your lawyer explaining the UCC’s role in car sales and financing would be money well spent. We don’t recommend do-it-yourself legal work, but if you are allergic to spending money on legal fees, check with Mr. Google – there are several “The UCC for Dummies”-type books available.

So, there’s this month’s article. See you next month!


Nikki (nmunro) is a Partner in the law firm of Hudson Cook, LLP., Editor in Chief of thudson) is Of Counsel to the firm, has written several books and is a frequent writer for Spot Delivery®. He is the Senior Editor of CARLAW®.For information, visit www.counselorlibrary.com. © CounselorLibrary.com 2019, all rights reserved. Single publication rights only, to the Association.

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