plans, payment programs, GAP insurance, emergency road service, VIN etching and other theft protection devices and undercoating. The proposed rule was opposed by the National Automobile Dealers Association. In an Automotive News dealer outlook survey earlier this year, a majority of dealers surveyed responded that the proposed rule would be a net negative for the automotive industry. In April 2023, the CFPB issued another policy statement pertaining to “abusive” practices stating that an abusive practice by a business: “(i) materially interferes with the ability of the consumer to understand a term or condition of a consumer financial product or service, or (ii) takes unreasonable advantage of (a) a lack of understanding on the part of the consumer of the material risks, costs, or conditions of the product or service, or (b) inability of the consumer to protect the interests of the consumer in selecting or using a consumer financial product or service, or (c) the reasonable reliance by the consumer on a covered person to act in the interests of the consumer.”6 Legal experts agree about the ambiguity of this CFPB policy which puts businesses in a compliance “trick bag.” The level of collaboration of enforcement action by federal agencies and State of Illinois agencies tasked with enforcement of consumer protection laws, such as the Illinois Attorney General’s Office, is well-documented. Dealerships should carefully review existing business practices and policies in light of these federal regulatory initiatives which are ongoing in nature, and the cooperative enforcement efforts with state agencies in Illinois. Julie A. Cardosi is Principal of the private firm, Law Office of Julie A. Cardosi, P.C., of Springfield, Illinois. She has practiced law for over 35 years and represents the business interests of franchised motor vehicle dealers throughout Illinois. Formerly in-house staff legal counsel for the Illinois Automobile Dealers Association, she concentrates her private practice in the areas of dealership compliance matters, transfers of ownership, mergers and acquisitions, franchise law, commercial real estate transfers, dealership employment and other areas impacting day-to-day dealership operations. She has also served as former Illinois Assistant Attorney General and Deputy Chief of the Consumer Fraud Bureau of the Attorney General’s Office. The material discussed in this article is for general information only and is not intended as legal advice and should not be acted upon as such. Dealers should consult their own private legal counsel for application to their specific circumstances. For more information, Julie can be reached at jcardosi@autocounsel.com, or at 217-787-9782, ext. 1. 1. See https://www.consumerfinance.gov/about-us/ the-bureau/ 2. Id. 3. See https://www.consumerfinance.gov/about-us/ blog/overcharging-for-add-on-products-onauto-loans/ 4. Id. 5. See https://www.regulations.gov/document/FTC2022-0046-0001 6. https://www.consumerfinance.gov/about-us/ newsroom/cfpb-issues-guidance-to-addressabusive-conduct-in-consumer-financial-markets/ 15 Illinois Automobile Dealer News
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