Source: Michele Holdosh | Senior Director of Strategic Initiatives | Ally Financial
Like so many things in the automotive retail industry these days, state and federal regulations governing dealerships are constantly evolving, whether they involve advertising, sales and fair-lending practices, customer privacy, or data handling. Michele Holdosh, Senior Director of Strategic Initiatives at Ally Financial, offers some key insights into strategies and best practices that can help dealers keep up with this ever-changing compliance landscape.
Q: What are some of the ways the compliance landscape is changing?
Michele Holdosh: As the compliance landscape in the automotive dealership space continues to evolve due to increased regulatory scrutiny and a heightened focus on consumer protection, it is a good idea for dealers to remain vigilant to avoid penalties and fines, but more importantly to protect their legacy and take care of their customers. These changes might include technological advancements that are transforming compliance monitoring through management software, as well as a greater emphasis on employee compliance training. Overall, these shifts may require dealerships to be more proactive and adaptable in their compliance strategies.
Q: How might dealerships stay informed about evolving regulations?
Holdosh: Keeping up with evolving regulations can be challenging for dealerships. To stay updated, dealers could actively participate in industry associations and attend conferences and workshops focused on regulatory changes. They also could subscribe to legal and compliance newsletters that send timely updates directly to their inboxes. In addition, they can use compliance management software to help track these updates efficiently. Any of these methods are excellent ways to stay informed.
To take it a step further, dealerships also may want to consult with legal experts or add a dedicated compliance officer or team to monitor regulatory developments and communicate changes to staff. These changes can significantly enhance compliance efforts and prove invaluable. Dealers can also implement ongoing training programs to help employees stay up to date with the latest compliance requirements. This helps foster a culture of awareness and adaptability within their organizations.
Q: What are some common compliance challenges dealerships might be facing?
Holdosh: From my experience, dealerships often face common compliance challenges, such as navigating the complex and frequently changing regulations related to consumer protection, data privacy, and financing practices. Another area of concern is managing customer data securely to comply with privacy laws, especially with the increased scrutiny of data-handling practices. Training staff to understand and implement compliance policies effectively is essential, as inconsistencies may result in compliance gaps and legal exposure. Lastly, dealerships may want to remain vigilant against potential fraud and unethical sales practices, which can add to their compliance efforts.
"Promoting collaboration among departments allows compliance considerations to inform business decisions."
Q: What role does employee training play in helping to maintain compliance?
Holdosh: Training helps staff members become knowledgeable about current and upcoming regulations, policies and ethical practices. Implementing ongoing comprehensive training programs also educates employees about the importance of compliance and helps them understand their specific roles and responsibilities in upholding legal and ethical standards. By fostering a culture of awareness and accountability, ongoing training helps reduce the risk of violations and inconsistencies in compliance practices. Moreover, well-trained employees may be better equipped to identify potential compliance issues early on, which enables dealerships to address them proactively before they escalate into more significant problems.
Q: What are some benefits of having a dedicated compliance officer or team within a dealership?
Holdosh: A dedicated compliance officer or team offers several benefits, including improved oversight of regulatory adherence, effective navigation of complex compliance requirements, risk mitigation, protection of the dealership’s reputation, and enhanced long-term operational efficiency. They also serve as a central point of contact for compliance-related inquiries, facilitating clear communication and helping reduce the chance of violations. This important role helps dealerships remain up to date with evolving regulations and implement necessary changes promptly. While a compliance officer or team significantly enhances oversight, it is important to clarify that dealerships remain ultimately responsible for adhering to regulations.
Q: What might help dealerships integrate compliance into their overall business strategy?
Holdosh: Integration begins with a strong commitment from leadership, which sets a positive tone for the entire organization. Developing clear policies and comprehensive training programs helps employees understand their compliance roles, while regular risk assessments can help identify vulnerabilities. Promoting collaboration among departments allows compliance considerations to inform business decisions. Additionally, integrating compliance metrics into performance evaluations reinforces its importance and leveraging technology streamlines processes. Open communication and feedback encourage the proactive identification of issues, while continuous improvement helps compliance practices evolve with changing regulations. By embedding compliance into a dealership’s culture, it becomes a fundamental aspect of its business strategy and supports long-term success.
Q: What are some best practices that might be helpful to dealers in maintaining compliance?
Holdosh: It’s essential to develop clear policies and procedures that align with a dealership’s business goals and regulatory adherence. Conducting regular risk assessments can help identify vulnerabilities, which allows dealerships to proactively address compliance issues. Dealers could also:
Incorporate compliance metrics into performance evaluations to encourage accountability among employees. Emphasize cross-departmental collaboration to help compliance considerations inform all aspects of decision-making. Leverage technology for compliance management, which can help streamline processes and enhance oversight. Develop a relationship with an independent third-party compliance company that can conduct reviews and recommend enhancements to the dealership’s overall compliance plan.