Pub. 2 2022 Issue 1

Official Publication of the Montana Auto Dealers Association 12 20 36 Why You Should Participate In Your Association’s Convention Getting To Know Audrey Knight – MTADA's Nextgen Director The Ins & Outs of Dealership Communication Auto Dealer PUB. 2 – 2022 – ISSUE 1

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©2022 The Montana Auto Dealers Association (MTADA) | The newsLINK Group, LLC. Al l rights reserved. The Montana Auto Dealers Association is publ ished annual ly each year by The newsLINK Group, LLC for the MTADA and is the official publ ication for this association. The information contained in this publ ication is intended to provide general information for review, consideration and dealer education. The contents do not constitute legal advice and should not be rel ied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your specific circumstances. The statements and opinions expressed in this publ ication are those of the individual authors and do not necessari ly represent the views of the MTADA, its board of directors, or the publ isher. Likewise, the appearance of advertisements within this publ ication does not constitute an endorsement or recommendation of any product or service advertised. The Montana Auto Dealers Association is a col lective work, and as such, some articles are submitted by authors who are independent of the MTADA. Whi le the Montana Auto Dealers Association encourages a first-print pol icy, in cases where this is not possible, every effort has been made to comply with any known reprint guidel ines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publ isher at 855.747.4003. CONTENTS 8 20 5 MTADA 2022 EXECUTIVE BOARD 6 MONTANA AUTOMOBILE DEALERS ASSOCIATION EVP’S MESSAGE 8 LEGAL UPDATE: CONSUMER LOSES SUIT VS. MT DEALER 11 MTADAs 108TH ANNUAL FAMILY CONVENTION 12 WHY YOU SHOULD PARTICIPATE IN YOUR ASSOCIATION’S CONVENTION 14 VITU: PROVIDING DIGITAL REGISTRATION AND TITLING TECHNOLOGY FOR MONTANA AUTO DEALERS 16 MTADA PARTNERS WITH ComplyAuto FOR GLBA COMPLIANCE 20 GETTING TO KNOW AUDREY KNIGHT – MTADA's NextGen DIRECTOR 22 MICHAEL "MIKE" DEAN TAYLOR NOVEMBER 4, 1956 — APRIL 11, 2022 24 MTADA’s EMPLOYEE BENEFITS PROGRAMS KEEP GETTING BETTER 25 SAVE THE DATE! 26 WEIGHING IN ON EVS AND THE VALUE OF DEALERSHIPS 28 AUTO BUYING PREFERENCES 30 HELPING DEALERSHIPS FIND SKILLED EMPLOYEES 35 THANK YOU TO OUR ASSOCIATE MEMBERS 36 THE INS & OUTS OF DEALERSHIP COMMUNICATION 4

MTADA 2022 EXECUTIVE BOARD MTADA Board of Directors Eric Henricksen, Don Aadsen Ford, District 1 Wade Rehbein, Rehbein Ford, District 2 Erick Anderson, Placer Motors, District 3 Craig Tilleman, Tilleman Motors, District 4 Aaron Jones, Courtesy Ford, District 5 Joe Billion, Billion Dodge Chrysler Jeep, District 6 Chuck Notbohm, Notbohm Motors, District 7 James Johnson, High Plains Motors, District 8 Audrey Knight, Clark Nissan/Hyundai, Next Gen Dealer Don Kaltschmidt, Don "K" Whitefish, NADA Director Shane Morinville, Group Dealership Director James Johnson High Plains Motors Chair Erick Anderson Placer Motors President Wade Rehbein Rehbein Ford President Elect Eric Henricksen Don Aadsen Ford Vice President Don Kaltschmidt Don "K" Whitefish NADA Director Insurance Trust Board Bill Underriner, Underriner Motors, Chairman James Johnson, High Plains Motors, Executive Member Craig Tilleman, Tilleman Motor Co. Don Kaltschmidt, Don "K" Whitefish Robert DeMarois, DeMarois Buick GMC Truck Jim Stanger, Helena Motors Erick Anderson, Placer Motors Erick Anderson, Executive Member 5

MONTANA AUTOMOBILE DEALERS ASSOCIATION EVP’S MESSAGE BRUCE KNUDSEN EXECUTIVE VICE PRESIDENT GOVERNMENT RELATIONS BKNUDSEN@MTADA.COM I 406.461.7680 Bruce Knudsen Executive Vice President We are living in turbulent times. At this point, the pandemic and supply chain shortages have become old news even though they refuse to go away. The good news? COVID-19 is declining across the U.S., and manufacturers are doing what they can to produce more vehicles. They are currently using many different strategies to make vehicles, such as having manufacturing plants run night shifts, altering designs to eliminate chip usage, and shipping partially completed vehicles that can be retrofitted later. The entire country is rethinking supply chains, and I have confidence that our supply problems will eventually be solved. Along the same lines, the pandemic may never go away, but medical professionals are doing their best to understand it, prevent it, and (when people are diagnosed) treat it. But the pandemic and the supply chain aren’t the only challenges. The dealership model is still being challenged by manufacturers who want to go around dealers and use a direct sales model instead. Cellphone companies have been using over-the-air data transmission for a while now, and the technology has expanded to applications such as updating autonomous vehicles. These are changes with farreaching consequences. We know the dealer model works. It took decades to develop, and now that it is here, it would be foolish to throw it away. Customers benefit from our ability as dealers to look at their needs and help them with any problems they may have with their vehicles. Now is the time to communicate and help customers understand the value dealers add every day. Another significant business change that seems to have kicked into high gear is EV production and sales. Although the EV market is growing faster in China than in the U.S., the market here is certainly increasing. In 2010, 1,191 EVs were sold in the U.S. By Dec. 31, 2020, the number for that year was 231,088. That’s still a small number compared to the number of vehicles currently on U.S. roads, but EV sales have picked up momentum. Adoption is probably going to be uneven — California will switch over much faster than Montana, for example — but manufacturers are shifting their focus away from combustion engines. On a national level, there will be a great deal of money for building charging stations so that drivers can take road trips and have plentiful choices about where to charge their vehicles if they are away from the outlet or charging station they have at home. A final challenge is rising interest rates. In March 2022, inflation triggered the first interest rate increase in three years. Some economists predicted 25 basis points, and that’s what happened, but it won’t be the last increase and might not be the smallest one. There will be six more meetings this year, and the expectation is that the rate will reach 1.9% by the end of 2022. New and used car prices are already high; higher interest rates will make vehicles even more expensive, making it harder for your customers to afford the vehicles they need. Life isn’t likely to get less complicated anytime soon. Still, a time-honored secret to getting through hard times is facing challenges as a group. MTADA is your ally, and we work hard for you. We advocate for dealerships on a state level, and we help you with benefits, legal advice and a big-picture view of the industry, nationally and locally. It is my privilege to represent and help you, and it will be exciting to see how everything turns out. But if association members stick together and pool our resources, I am certain we can continue to prosper no matter what problems are headed our way. 6

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A February 2022 decision by the Montana Supreme Court upheld a Summary Judgment Order by Hon. Mike Menahan, First Judicial District Judge in Helena, in favor of Lithia Motors, dismissing a consumer lawsuit brought over the installation of a replacement engine in an 8-year-old Subaru Legacy with 100,000 miles on the odometer. On Sept. 12, 2017, Lee purchased a used 2008 Subaru Legacy from Lithia. At the time of purchase, the vehicle was eight years old and had almost 100,000 miles. Lee also purchased a two-year extended service agreement on the vehicle from First Extended Service Corporation (FESC) to cover the cost of any unexpected repairs to the vehicle. In November 2017, Lee began experiencing problems with the engine. He took the vehicle back to Lithia for repair. FESC paid the service department to rebuild a portion of the vehicle’s engine pursuant to its extended service contract. The engine continued to experience issues fol lowing this repair, and Lee took the vehicle back to Lithia. Lithia recommended a ful l engine replacement with a remanufactured engine. FESC approved payment for the replacement engine under Lee’s extended service agreement. Lee initial ly declined FESC’s offer to have the engine replaced. The remanufactured engine had already been delivered to Lithia, so Lithia had to pay over $1,000 to have the remanufactured engine returned. Lee then filed suit. After Lithia’s counsel inquired why Lee had declined the benefits of his extended service agreement with FESC, Lee changed his mind and agreed to allow FESC to pay for the installation of a remanufactured engine. An appointment to install the new engine was scheduled. As the date approached, Lee’s counsel advised Lithia that Lee was also experiencing issues with the vehicle’s clutch. Lithia’s counsel telephoned Lee’s counsel to discuss a settlement agreement. During this call, Lithia offered to have its service department replace the clutch on Lee’s vehicle at Lithia’s expense in exchange for a release of Lee’s claims against Lithia. Lee’s attorney sent a one-line email to Lithia’s counsel stating: “Mr. Lee will accept the offer to have the clutch replaced in exchange for settling all his claims against Lithia.” Later that day, Lithia’s counsel sent a reply email stating that this was “great news” and scheduled the repair work for the clutch. In his reply, CONSUMER LOSES SUIT VS. MT DEALER By R. J. “JIM” SEWELL, JR., MTADA General Counsel LEGAL UPDATE R. J. “JIM” SEWELL, JR. MTADA GENERAL COUNSEL CONTINUED ON PAGE 10 8

Baxter strives to retain top talent. He needed a system that employees could easily learn, to drive the high customer satisfaction that helps his dealership differentiate itself from online vendors. Baxter also wanted a DMS that was accessible offsite and on mobile devices, so he could run the business from anywhere. Thanks to the flexibility and ease of use of VUE DMS, his employees have become more productive. Between the improved workflows and mobile capabilities, the dealership has sped up the process between sales and F&I, dramatically decreasing delivery time and boosting customer satisfaction. EASE OF USE. CONSIDER VUE DMS. RECONSIDER What took me 3 minutes on VUE DMS used to take 45 minutes. Customers will remember that forever. That’s important for customer retention and satisfaction. Baxter Howell General Manager, Brad Howell Ford CONSIDER VUE DMS 866.928.3210 | VUEDMS .COM/MONTANA

Lithia’s counsel also promised to send a more formal release for Lee to sign at a later date. Lithia installed the remanufactured engine for which FESC paid, and replaced the clutch at its own expense. The total cost to FESC to replace the engine was $7,352.06, and the cost to Lithia to replace the Subaru’s clutch was $1,293.99. After the clutch was replaced and the remanufactured engine installed, Lee continued to drive the Subaru for nine more months and 17,349 miles. He then took it back to Lithia, claiming the new engine had many issues. Lithia’s inspection revealed no significant issues with the vehicle. Lee ultimately traded in the Subaru to Lithia for a new Jeep Compass at a discounted price. After purchasing the Jeep, Lee went back to court demanding $11,000 in damages and $4,500 in attorney fees. Lithia asked the court for Summary Judgment dismissing the case because it had already been settled. Judge Menahan granted Lithia’s motion because the November 2018 email correspondence between the parties’ counsel formed a valid settlement agreement that barred Lee’s continued litigation of his misrepresentation and MCPA claims against Lithia. The Supreme Court held it did not matter that Lee had not signed the formal release sent by Lithia, concluding “[i]t is established case law that an unconditional acceptance may bind parties in a settlement agreement, even without a detailed agreement.” In particular, the court noted the clear similarities between Lee’s case and the control ling case of Hetherington v. Ford Motor Co., 257 Mont. 395, 399, CONTINUED FROM PAGE 8 @mcconkeyauctiongroup MEETING YOU WHERE YOU ARE After Lithia’s counsel inquired why Lee had declined the benefits of his extended service agreement with FESC, Lee changed his mind and agreed to allow FESC to pay for the installation of a remanufactured engine. 849 P.2d 1039, 1042 (1993), which held that the failure to execute a formal settlement agreement did not bar the formation of a valid agreement when shorter written correspondence between two parties where one party agreed to release al l legal claims in exchange for payment from the other party constituted an “unconditional” offer and acceptance. While it would have been better to get the settlement agreement signed before the repairs were undertaken, Lithia won the case because Lee’s counsel stated in writing that Lee accepted the offer, Lithia’s counsel accepted as well, and Lithia then performed all its obligations, so the settlement was complete – the correct result. 10

MTADAs 108TH ANNUAL FAMILY CONVENTION! The convention will be held in Billings, Montana at the DoubleTree Hotel from June 9-11, 2022. We are looking forward to seeing you and your family! Register Now Be prepared for the road ahead. Whether you're optimizing operations or preparing for a sale or acquisition, our experienced advisors can help you map the road to success. 11

12 People really do need each other in order to succeed. Association membership can be one of the most important investments you can make professionally, and attending conventions and events is important. Your time is valuable. So are your financial resources. That being the case, why should you invest the time and money in attending an association convention? Couldn’t you have just as much impact professionally by participating in something like social media? Social media is important, of course, and doing it well can be vital to career development. But there is just no substitute for seeing people face-to-face and talking to them. MTADA provides a valuable way to get you in a room with other people, learning from each other; the resources they provide can strengthen you professionally as well. You might be surprised at the number and variety of resources available to you through an association event. WHY YOU SHOULD PARTICIPATE IN YOUR ASSOCIATION’S CONVENTION The Pitch for Professional Development The top reasons why convention attendance should be a must-do item on your list include the following: • Contacts, contacts, contacts: Everyone talks about the importance of networking, but many people don’t understand what networking really is. It’s an intersecting of friendships and acquaintances, some strong, some weak, and it isn’t something you lock in your desk and expect to keep fresh. If you know someone and never call them or have any regular contact with them, there’s always a chance that your friendship will starve a slow and lonely death. More than likely, you will begin to slide away from each other. On the other hand, relationships that benefit from regular feeding will thrive. A cell phone call or a blog entry is better than nothing. But don’t you want to raise the bar just a little? A convention is a great excuse for getting together. Share a lecture, a meal, a

laugh. Done right, it will build you professionally. It might also be fun. • Feeding your brain: How long can you expect to stay at the top of your field – or even just get there in the first place – if you don’t ever put yourself in situations where you can get a lot of different information from a lot of different sources in a short period of time? There’s a collective synergy that can only come to life when you have many competent, professional people all in the same room, ready to talk shop. Don’t fool yourself: search engines can never replace personalized, expert information delivered in real-time. You’ll learn about trends, legislation, and important issues by becoming a member and actively choosing to participate. The Game Plan To get the most out of any convention, you need to start ahead of time. • Do the research. You want to get an idea of what the program MTADA provides a valuable way to get you in a room with other people, learning from each other; the resources they provide can strengthen you professionally as well. will be so you can make the best use of your time. You should also read any available publications to figure out the important players and what people are currently involved in. Figuring out where to spend the time might be a challenge; you may have to make some difficult choices. Which speakers will teach you the most? What subjects could have the most benefit for your life? Who are the most important people to meet? • Focus on being more extroverted than usual. Arrive early, stay late, and look for opportunities to meet people. If you are shy and talking to strangers is hard for you to do, focus on making it easier for other people to talk to you. Strangers don’t have to stay strangers. Getting into a genuine conversation can happen with remarkable speed once you identify some common interests. At the same time, be polite, but make sure you continue to circulate. You will be in many different social situations while at the convention. Each one is an opportunity for another new conversation. • Pay attention to the professional information presented. Education is a privilege in all of its forms. What you learn during a convention may significantly change or enhance your career direction. • Bring business cards, and exchange them with others. It’s easier to reconnect later with someone if you do. • Keep initial conversations light. The first time you talk to someone is probably not the time to talk about your childhood dreams and aspirations. Instead, ask questions about subjects of interest to you, such as finding out major employers in our field, ways to get involved, and skills to focus on for improvement. • Take advantage of discounts and handouts. There may be product and service exhibits that would help you, and the convention cost may be lower than it would normally be. After the Convention The convention should continue to benefit you after you leave: • Your association may offer professional services to members. You may also gain access to directories and journals. • Seasoned professionals may decide to mentor you. • Put the knowledge you gained to work and continue to col lect more insight as you progress forward. • Most importantly, look for service and leadership opportunities where you could benefit others, then make sure you give these opportunities your best efforts. You might write and publish articles, serve and eventual ly lead committees, influence legislation, and become one of the must-meet attendees yourself. 13

When did Vitu get started, and what does it do? Don Armstrong and Kelly Kimball founded the company in 2005 to provide digital registration and titling technology for auto dealers. In Michigan, Don created the first U.S. online vehicle and watercraft registration renewal system in the nation. Kelly is an innovator and eGovernment consultant who has been involved in digital systems for worldwide governments. They combined forces with Rob Cohen at an auto dealer compliance consulting company called Auto Advisory Services and developed Vitu’s title and registration solution. Vitu now specializes in developing registration and titling solutions for auto dealers, consumers and governments. Most recently, Vitu also entered the payments business with solutions for both auto dealers and governments. Products are built on a modern and secure foundation. We work to deliver the industry’s best compliance record and highest customer satisfaction. As of 2022, Vitu has grown to almost 400 employees and 12 offices in 11 states. Vitu processes more than 400,000 vehicle title and registration transactions per month. In addition, Vitu Interstate provides forms, fee calculations and title and registration processing in all 50 states. It is the newest, most comprehensive and accurate interstate title processing system in the nation. VITU: PROVIDING DIGITAL REGISTRATION AND TITLING TECHNOLOGY FOR MONTANA AUTO DEALERS MTADA recently spoke with Kelly Raines, an operations manager at Vitu since June 2016, about the company, its current Montana products and its plans. How long has the company been in Montana? Vitu established its Montana team in 2018. It has grown to eight members and continues to expand rapidly. Vitu’s entry into Montana was led by John Brueggeman, Vitu’s Chief Strategy Officer, a former Montana senator born and raised in Montana. After he got out of government, he started working for 3M, then met Don Armstrong and joined Vitu in 2012. He has strong ties to Montana. It may be a large state, but it has a small-town vibe. Everyone knows everyone. What is the connection between the Motor Vehicle Division and Montana’s state government? Montana’s Motor Vehicle Division is housed within the Montana Department of Justice. The Montana State Attorney General, Austin Knudsen, is charged with delivering vehicle and driver licensing services to the public. What does Vitu do in Montana? We have a contract with Montana’s Motor Vehicle Division to provide consumers and businesses with the latest government technology and services. Over the next couple of years, Vitu will be launching an extensive list of technologies, beginning with consumer services such as online vehicle registration and driver licensing. Next, 14

we will be deploying systems for Montana’s auto dealers, lenders, and fleet operators. Vitu’s first solution in the state was its lending system that allows Montana lenders to electronically file lien releases on vehicles, dramatically speeding up the process for the industry as well as for Montana’s citizens and auto dealers. If a dealer reaches out to one of the lenders on our list, the lender can immediately use the portal to release the vehicle online. In the next phase of this project, we will be adding the ability for lenders to file liens electronically as well. How many lenders are using the lending portal? For the first phase, we started with credit unions and Montana-chartered banks. We now have 30 lenders out of 110. Many financial institutions are waiting to onboard, but the remaining lenders are on hold until the MVD approves the second phase. During the second phase, we will electronically add lanes so that as soon as a dealer applies for a loan on a vehicle, the dealer can add it so that their interest in the vehicle appears online. Our new online vehicle registration renewal system was launched in September 2021. Montana residents can renew their vehicle registration online, and they generally don’t have to go into the County Treasurer’s office. Instead, they can visit the MVD website for online vehicle registration renewal, and it redirects them to our website. There are only three steps, and inquiries and checkout are extremely fast. The rollout was smooth, and now we are doing thousands of renewals per month. Our inquiries system allows people to look up information about drivers or vehicles. There is an onboarding process, but it is simple. We ask for some information and have customers sign documents. Once someone has been set up, they can click one link for driver records and a separate link for vehicle records. Typical users include auto dealers, airports, court systems, employers, hospitals, insurance companies, security companies and tow companies. The only way to pull a driver’s license in Montana and see the history on a driver’s record is through Vitu. Court systems use it, but not police officers. Vitu Interstate is for interstate transactions, and there are three levels of service. For full-service customers, Vitu finishes the transaction after the buyer has signed the papers. Vitu follows the rules for the buyers’ local jurisdictions during the entire process and delivers plates, registration and stickers. Dealers can track each step of the process until it is complete. What programs are in development for the future? Two programs are very close to being rolled out, and some others are further away, but I will tell you about the ones that are almost here. Dealer title-only transactions for digital titles might be available sometime during the first half of the year, and online driver’s license renewal should be in place on a similar schedule. Dealer Digital Titling is an incredible new product. It’s cutting-edge and very exciting. Digital dealer titling is the first phase of our partnership with the Montana MVD to make vehicle titling through auto dealers completely digital. They will be able to process the title transfer online. When a Montana dealership buys a vehicle and needs to re-title its vehicle into its name, they will be able to log into the Vitu system. Vehicle data will be entered into the Vitu system through integration with each dealer’s management system; the transaction can then be digitally signed and submitted to MVD. Dealers will upload any required paperwork, such as a previous title or lien release, into the Vitu system to be filed with MVD. When Vitu handles the digital-title process, the title will go to the MVD system and be printed at the state office the next day. Dealers will then have three different ways to get the title. If they need it for something such as an auction, they can choose to have the MVD send the title to them. Alternatively, they can ask the MVD to send it to the appropriate party or a one-time separate mailing address. We are currently testing the process. When the MVD signs off, it will go into beta testing with some dealers, and then there will be a full rollout to the rest of the state and its dealers. It is very, very close to happening. In the next phases, Vitu will implement its compete registration and titling platform. Dealers will then be able to submit title and registration through the Vitu system eliminating the need for dealers or their customers to make a trip to the county office. Instead, customers will be able to choose and pay for their license plates at the dealership. Once the transaction has been submitted to MVD, the license plates will then be shipped directly to the customer or the dealership for installation. All transactions will be available electronically with digital signatures for each form. Vitu will work with each dealer to integrate with their DMS and contracting flow to create a fully digital, streamlined title and registration process. We are also pretty close to being done with a driver’s license renewal system. The MVD has two departments, one for drivers and one for vehicles. Suppose someone has a Montana driver’s license but doesn’t want to come to the MVD to renew it. Once our system is in place, they will be able to go to a website and renew their license through that, and then the license will be mailed out to them. There will be some restrictions on it, depending on who wants to renew, but the eligibility criteria will be posted on the website, and the software will stop people who aren’t eligible from renewing online. Kelly Raines is an Operations Manager at Vitu since 2016. For more information visit 15

MTADA PARTNERS WITH ComplyAuto FOR GLBA COMPLIANCE The Montana Automobile Dealers Association (MTADA) is continually looking for ways to protect its dealer members, so we are proud to announce a partnership between us and MTADA to help Montana dealerships comply with the Gramm-Leach-Bliley Act (GLBA). We know that Bruce and the rest of the team at MTADA go through a very strict process in onboarding partners, so to secure this relationship is a very validating and humbling achievement. We look forward to helping Montana dealers with this complex set of federal regulations so that dealers can go back to what they do best: selling and servicing vehicles. Dealers need to be compliant with the updated Federal Safeguards Rule as soon as possible, given that the law went into effect on Jan. 10, 2022. Compliance with these federal regulations will not be an overnight solution, and the penalties associated with not complying are extremely expensive (up to $46,517 per violation, to be exact). Dealers are urged to begin immediately if they want to put themselves in a position to succeed in the ever-changing legal landscape. With over 60 years of dealer experience, ComplyAuto’s dealer-focused suite of tools is helping over 1,000 dealerships across the country achieve state and federal compliance in an efficient and cost-effective way. What is the revised Safeguards Rule under the Gramm-Leach-Bliley Act? On Oct. 27, 2021, the Federal Trade Commission (FTC) announced the revision of the GLBA’s Safeguards Rule (“Rule”) for the first time since the Rule was issued in 2002. 16

In its announcement, the FTC specifically names “automobile dealerships” as non-banking financial institutions that fall under the purview of these new revisions. The Rule requires dealers to implement operational changes regarding their data protection and cybersecurity measures, such as creating, updating, and implementing a written information security program (“ISP”) to protect consumer financial information as well as to conduct periodic risk assessments to make sure the organization is abiding by strict protocols to protect this information. Dealers must act immediately to meet compliance with the new rules or otherwise face stiff penalties of up to $46,517 per violation. What does the revised Safeguards Rule require? Here is a short list of requirements that impact dealerships the most: 1. Submit a periodic written report to the dealership’s board of directors or senior officers on compliance with these new requirements and the overall status and results of the Information Security Program (ISP). 2. Implement a written Incident Response Plan in case of a data breach. 3. Perform periodic written risk assessments within the organization that adhere to certain requirements. This will be discussed at length below. 4. Encrypt all data in transit over external networks and at rest. 5. Require Multi-Factor Authentication (MFA), such as an SMS/text verification code, for all systems containing customer nonpublic personal information (NPI). 6. Implement a data retention policy and dispose of customer information within two years after the end of a customer relationship, unless doing so conflicts with state or federal law. 7. Adopt procedures for IT change management. 8. Appoint a single Qualified Individual to oversee the dealership’s ISP. 9. Monitor and log the activity of authorized users and detect unauthorized use or access of customer information. 10. Implement a system or software to continuously monitor cybersecurity threats, including annual penetration tests and bi-annual vulnerability tests. This will be discussed at length below. 11. Perform security awareness training for all employees. 12. Periodically assess service providers for their adequacy of physical and technical safeguards and have agreements that contractually obligate them to implement and maintain appropriate safeguards. Written Risk Assessment: The Revised Rule revisits the requirement and expands on it with more detail and specificity. The Revised Rule requires that dealerships create a written risk assessment that includes: • Criteria for the evaluation and categorization of identified security risks or threats faced by the dealership; • Criteria to assess the confidentiality, integrity, and availability of the dealership’s information systems and customer information, including the adequacy of existing controls; and • Requirements describing how identified risks will be mitigated and how the information security program will address the risks. Annual Penetration Testing: New to the Revised Rule, dealers are required to perform annual penetration testing to evaluate the effectiveness of the safeguards’ key controls, systems, and procedures. Penetration testing means a test methodology in which assessors attempt to circumvent or defeat the security features of an information system by attempting penetration of databases or controls from outside or inside your information systems. Additionally, the FTC cited “social engineering and phishing” as an important part of penetration testing because the testing involves employees with access to the information system rather than the system itself, which does not exclude them from the definition of penetration testing. Biannual Vulnerability Assessments: The Rule now requires that dealers conduct biannual vulnerability assessments to detect publicly known vulnerabilities. Note that these tests, in this context, are not relevant to information in the physical form. In its comments, the FTC notes free resources are available that automate vulnerability assessments, such as “OpenVAS” and “” Service Provider Agreements and Other Requirements: The definition of “service provider” is not updated with this revision, nor is the requirement for dealers to “take reasonable steps to select and retain service providers that are capable of maintaining appropriate safeguard for customer information and require those service providers by contract to implement and maintain such safeguards.” First, dealers should contractually require the service providers (i.e., any person or entity that receives, maintains, processes, or otherwise is permitted to access customer information through its provision of services directly to a financial institution) they work with to implement and maintain appropriate safeguards including encrypting the information they process for the dealers. Second, dealers must periodically assess these measures that their service providers have purported to put in place. To accomplish this, dealers should consider requiring vendors to complete a risk assessment questionnaire to ensure the vendor confirms to applicable industry standards regarding physical and technical safeguards. For example, any vendor with access to nonpublic personal information should confirm that they support MFA login and encryption of data at rest and in transit. Incident Response Plan: New in the Rule, these required plans must outline goals and address internal processes for responding to security events, define clear roles and responsibilities of parties involved, prescribe internal and external communications and CONTINUED ON PAGE 18 17

information sharing, identify weaknesses in information systems and how to remediate, document and report security events and related response activities, and evaluate and revise the incident response plan as necessary following the security event. It needs only to establish a system that outlines the dealers’ response if such incidents should occur. If you feel overwhelmed by the content and potential time and expense that abiding by these new revisions may require, you’re not alone. In 2019, the National Automobile Dealers Association (NADA) suggested that fulfilling these new rules would cost dealerships an average of $277,000 per year. Introducing: ComplyAuto ComplyAuto is the most trusted privacy software tool for dealers representing over 1,000 dealerships and some of the largest groups in the United States. Partnered with NADA as their first Affinity Provider in compliance, ComplyAuto can not only help dealerships at a fraction of this cost, it can get dealerships compliant with these new rules in a matter of days, not months. Here is a short summary of what ComplyAuto’s suite of tools can accomplish. 1. Privacy Rights Management This software serves as an all-in-one privacy solution for dealers. It offers an efficient data mapping tool and vendor management system that identifies how consumers’ personal information is captured and which vendors have access. 2. Federal Safeguards Rule Compliance This is the first dealership software to operationalize and automate the complexities of the FTC Safeguards Rule. It creates information security programs unique to each dealership with a user-friendly tool that updates all required documents in real-time. It also allows dealers to perform and document required physical and technical risk assessments and efficiently collect data processing agreements from service providers using its proprietary built-in eSign feature. 3. Advanced Cybersecurity Suite This solution reinforces data protection and cybersecurity protocols through completely remote vulnerability assessments and penetration testing (VAPT) software. With online security training, it integrates dealershipspecific phishing simulation software into your data protection processes. For more information on ComplyAuto products and services, or to learn more about its transparent pricing, please visit or email them at Disclaimer: Nothing in this email is intended to be legal advice. Please consult with competent legal counsel if you have questions regarding this article, the Gramm-Leach-Bliley Act, or the federal Safeguards Rule. CONTINUED FROM PAGE 17 ComplyAuto is the most trusted privacy software tool for dealers representing over 1,000 dealerships and some of the largest groups in the United States. 18

Audrey Knight is the general manager at Clark Nissan and Clark Hyundai in Kalispell, an MTADA member and MTADA’s NextGen director. The association recently spoke with Audrey about her life, career and plans as a director. Audrey Knight grew up in Renton, Washington. “I feel like I was very blessed to grow up with a family who supported me and gave me a really solid start to life,” she said. “There has been less for me to overcome because I had a supportive family growing up.” She is close to both her parents and her older sister. “My dad started taking me to horse shows when I was a little child. We spent a lot of time on the road together, and our experiences gave me confidence and independence. My mom has been a solid rock throughout my whole life, and I am also close to my sister. She’s about a year and a half older than I am. When life is hard, or even when it just seems that way, my family and friends give me the support I need. I am grateful that I don’t have to walk through life alone.” Horses have always been a big part of Audrey’s life. She worked at the barn when she was a child, cleaning stables and exercising or working with the horses. Audrey did Running Start while she was attending high school at John F. Kennedy Catholic High School. The program allows high school students in Washington State to take college courses at community and technical colleges for high school and college credit. She moved to Helena, Montana, in 2008 to study at Carroll College, and she graduated with a bachelor’s degree in civil engineering and a minor in Spanish. The college motto is “Non scholae, sed vitae” (Not for school, but for life). Audrey loves the beautiful outdoors in Montana. She is often outdoors to ride horses or hike, and she enjoys the scenery, too. “I stayed here after graduation because I loved living in Montana so much,” said Audrey. “I’m very active, and Montana fits my lifestyle.” Working at a dealership was not part of Audrey’s original plan. She needed a job after doing some internships with the forest service and an engineering company, saw a job ad on Craig’s list and applied. She was hired as a dealership finance manager at Penco Power Products and worked there for a year and a half. Audrey was referred to the Green Auto Group when they purchased a Hyundai franchise in 2014, and they hired her to work in finance at Hyundai and Nissan for six years. Steve Justice, the regional manager for the Green Auto Group, GETTING TO KNOW AUDREY KNIGHT – MTADA's NextGen DIRECTOR 20

promoted Audrey as the general manager about two years ago. The Clark Auto Group acquired the Green Auto Group’s Hyundai stores about a year ago. Audrey is now the general manager at Clark Nissan and Clark Hyundai in Kalispell. Audrey is grateful to her mentors. “I’ve learned from so many people,” she said, “but the ones who stand out are the initial people who gave me opportunities despite my lack of experience.” For that reason, she is especially grateful to Rob and Larry Green, the owners of the Green Auto Group, and the late Ricky Franks, the former general manager. “I’m thankful to them for being open-minded and giving me the opportunity,” she said. Audrey’s current mentor is Steve Justice. “He is the one who saw the potential in me in finance and offered me the general manager role. He taught me the value of doing right by the customer and our employees. He also taught me how important our people are.” She also values the current dealership owner, Cam Clark: “I couldn’t ask for a better person to learn from,” she said. Audrey became an MTADA member because she appreciated the association’s support, and she wanted to support the association’s work for the dealership and the local community. Membership has benefited Audrey personally and professionally because of the association’s amazing collective knowledge. She can ask questions about regulations or the correct procedure for situations that arise at work. “Personally, it’s great knowing there is a network of people I can talk to about ideas and the problems I am up against,” she said. Audrey has now reached a point in her career where she is in a position to mentor others. When asked about the three most valuable lessons she has learned during her life so far, she gave the following list: 1. Trust your gut. Be self-confident. 2. Be honest with yourself and others. 3. Stand firm in your convictions and always be open to learning. Ask the questions. Audrey saw two important problems when she was asked about the problems currently facing the auto industry in Montana. One had to do with trust, and the other was about staffing problems. “As a whole, the auto industry has a tough time shedding past stigmas and earning our customers’ trust again,” she said. “In this market, it is important to establish trust and really take care of customers. But it takes good people at our dealership to give people the experience we want to give them, and it’s hard to find and train the right people.” Audrey suggests that “the biggest part in earning our customers’ trust is having the right people and culture to solve those problems. You have to invest in your people and dictate a firm culture about how you want to treat employees and customers.” She continued, “It’s important to invest in training our people on how we want them to interact with our customers and the end goal of the experience we want customers to have when they come into the dealership. It’s a long-term investment, but we will reap the rewards for years if we can invest in the right people and maintain the right culture and standards.” When the MTADA board recently approved Audrey as next year’s NextGen Director, she made plans for what she wants to accomplish during the year. Audrey has decided to invest in the future of Montana’s auto dealers by encouraging them through support and education. She also wants to reach out to people outside the dealership industry and encourage them to have a career in the car business. “Too many people don’t know about the employment opportunities, or they don’t think it’s an option for them,” she said. Audrey plans to have networking events to tell people about the many jobs that dealerships can offer. These events will be educational and a good place to recruit employees. “Dealerships have a lot of opportunities,” she said. “People know you can work at a dealership if you are on the sales side or are a skilled mechanic, but there’s also the whole support staff. You can also be a customer relations manager or a receptionist, work at the parts counter, provide office support, and be a delivery or shuttle driver. Many people don’t think about all the different jobs at the dealership.” Audrey is glad she is an association member, and she is also grateful for the opportunity to be the NextGen Director. “I look forward to being part of the team and having an opportunity to learn,” she said. Trust your gut. Be self-confident. 21

MICHAEL "MIKE" DEAN TAYLOR NOVEMBER 4, 1956 — APRIL 11, 2022 Michael “Mike” Dean Taylor, 65, Great Falls, died April 11, 2022, in a motorcycle accident near Parker, CA. He was an owner-partner of Taylor’s Auto Group. A viewing was held at Hillcrest Lawn Memorial Chapel on Wednesday, April 27, 2022. The funeral took place on Thursday, April 28, 2022, at the Central Assembly of God followed by the burial at Highland Cemetery. Mike Taylor was born Nov. 4, 1956, in Clovis, NM, the fifth of six sons of Lloyd and Barbara Taylor. An Air Force family, they moved to Sembach Air Force Base, Germany, then to Glasgow Air Force Base, Montana. The family settled in Great Falls in 1964 when his father retired from the military. At 17, he became a car salesman, which was the beginning of a long career in the automobile business. In those early years, he was passionate about building and racing stock cars. He loved his horses and hunting trips in the mountains. A hard worker, he also played hard. He loved to ski, dirt bike, and snowmobile with his family, brothers, nephews, and his many friends. He was passionate about riding his Harley Davidson, traveling the open roads of most of the western U.S. and Canada for the past 24 years as one of the “Three Amigos,” including wife, Karon and brother, Ron. Mike loved his earlier vacations at Camp Tuffit on Lake Mary Ronan, his special cabin in the Little Belt Mountains, and boating, most lately at Flathead Lake. He lived “Large,” touching many people in many ways. He had an especially huge heart for anyone who was alone or down on their luck. In the early 1980s, he started a business venture with his brother Jim, and sister-in-law, Bamma. He made a Catholic Cursillo and started his walk with Jesus Christ and joined Alcoholics Anonymous. He was a few months from celebrating 40 years of sobriety. He helped many become sober, and shared this ministry with several brothers, mentoring more people than can be listed. He loved all animals! His dogs, Rusty, Jake, Chevy, and now Torque and Wesson, were precious to him. Over 20 years ago he became a private pilot, eventually accomplishing the coveted instrument rating. Starting with basically nothing, the business venture became what is now known as “Taylor’s Auto Group.” This includes Taylor’s Automax, Buick GMC, Nissan, Jim Taylor’s Motors, Taylor’s Transportation, and The Taylor Land Partnership. He was a beloved, phenomenal car man, and the best brother-partner you could ever have. Without Mike, the Taylor’s Auto Group would not be what it is today. He traveled millions of miles and bought thousands of cars. He truly was our Superman. Mike’s children from a previous marriage, Lindsay and Chad are the delights of his life. In 2009 he met his true love, Karon. She would bring her sons Joey and Trevor into 22

the family. Altogether they would bless Mike and Karon with eleven grandchildren, Kade, Henley, Aspen, Grey, Caelin, Rilynn, Remingtyn, Koen, Jackson, Hailey, and Lincoln. He was crazy about the times he spent with them. Mike also made sure that his special needs son, Trevor, was living life to the fullest. Whatever he decided to do, he was all in. He knew he wasn’t perfect, as none of us are, but he never quit trying to change for the better. Mike had a deep personal relationship with Jesus Christ and loved God with all his heart, all his soul, all his mind, and all his strength. He was always trying to make a friend, be a friend, and bring that friend to Christ. We all love you and will miss you, Mike. Mike was preceded in death by his parents. He is survived by his wife, Karon Taylor; daughter, Lindsay (Corbett) Somerfeld; sons, Chad (Abbey) Taylor and Trevor Taylor; stepson, Joey (Stephanie) Iverson; and eleven grandchildren, all of Great Falls; brothers, Lloyd (Sharolyn) Taylor of Great Falls, Ronald (Peggy) Taylor of Missoula, James (Bamma) Taylor of Great Falls, Steven (Annie) Taylor of Great Falls, Mark (Heidi) Taylor of Great Falls; and numerous nieces and nephews. Memorials may be made to New City Church building fund or Echoz. Condolences for the family may be shared online at Whatever he decided to do, he was all in. He knew he wasn’t perfect, as none of us are, but he never quit trying to change for the better. Mike had a deep personal relationship with Jesus Christ and loved God with all his heart, all his soul, all his mind, and all his strength. He was always trying to make a friend, be a friend, and bring that friend to Christ. 23