Document LpONn16NyJwdZgxzZG44kyj7Q

1F RBaULATORfMffi NADA's Annual Update on Federal Regulations 17cv1906 Sierra Club v. EPA - 6/22 Production ED 001523 00008296-00001 AUTOMOBILES ThE RBGULATOFYM^ Gjr annual list of major federal regulations; state and local laws al90 apply and sometimes include additional requirements. 17cv1906 Sierra Club v. EPA - 6/22 Production ED 001523 00008296-00002 All Departnents (General Management/Personnel) tilf #af|Uirements All Departments (Customer) Americans With Disabilities Act CAN-SPAM Act Driver's Privacy Protection Act Electronic Funds Transfer Act FTC Privacy Rule FTC prohibition against deceptive and unfair trade practices FTC Safeguards Rule FTC Telemarketing Sales Rule FTC Warranty Rules IRS Cash-Reporting Rule Magnuson-Moss Act OFAC restrictions Telephone Consumer Protection Act USA PATRIOT Act Body Shop Clean Air Act EPA hazardous-waste rules OSHA Hazard Communication Standard OSHA Respiratory Protection Standard OSHA workplace health and safety standards UNICAP VIN and parts marking F&l Department Dodd-Frank Financial Reform Law Equal Credit Opportunity Act Fair Credit Reporting Act FACT Act of 2003 FTC Credit Practices Rule FTC Holder-in-Due-Course Rule Gramm-Leach-Bliley Act Producer-Owned Reinsurance Companies Truth in Lending and Consumer Leasing Acts New- and Used-Vehicle Safes Departments American Automobile Labeling Act < CAFE and GHGs Rules Diplomat vehicle purchases < DOE/EPA gas-mileage guide < Federal bankruptcy law < FTC Door-to-Door Sales Rule < FTC guidelines for fuel-mileage advertising and alternative-fueled- vehicie advertising arid labeling FTC Used Car Rule < Gray-market vehicles IRS treatment of salesperson incentives LIFO inventory accounting method < Heavy-highway-vehicie excise tax Motor vehicle tax credits < Monroney sticker (Price Labeling Law'** NHTSA alteration and tire-placarding rules NHTSA odometer rule NHTSA recall regulations < NHTSA safety belt/sirbag deactivation < NHTSA tire regulations < School van sales UNICAP Service and Parts Department Clean Air Act Clean Water Act DOT hazardous-materials-handling procedures FTC Used Parts Guide IRS Core Inventory Valuation LIFO/FIFO inventory accounting method NHTSA tampering rules NHTSA tire rules OSHA asbestos standards OSHA Hazard Communication Standard OSHA lock-out/tag-out procedures OSHA workplace health and safety standards RCRA Safe Drinking Water Act Superfund UNICAP 17cv1906 Sierra Club v. EPA - 6/22 Production ED 001523 00008296-00003 IN AZDITICN ID THIS LISTCF FHB^L LAAS/H) FEULATOvB, be sure Id consult nada.org/regulatDrv9ffeirs for more detai Is. All Departments (General Management/Personnel) MbrdabteGareM: Extensive health-care reforms enacted in 2010 affect dealerships and their health-care plans. For ample, rrcst large dealerships (with mere than 50 full-time employees) must have decided by January 1, 2015, whether they will offer health ocverage that meets the federal requirementsap^/a pen alty. IVfeny additional reporting, reoord-keeping and other duties apply to dealerships and other businesses. For mere information, visit healthcaragcv. Age Discrimination in Employment Act: Protects older indi viduals against age-based employment discrimination. AmericansVMth Disabilities Act (ADA): Dealerships with 15a mere employees must reasonably aooerrmedate disabled workers and job applicants. Consolidated Omnibus Budget Reconciliation Act (CXERA): Requires dealerships with 20 or more employees to continue health-care coverage for e<-errplcyees and their families for 18 to 36 months, depending on circumstances. Bectronic deposit of faces: Dealerships having mere than a de minimis amount of aggregate depository taxes generally must deposit through theEectronicFederal Tax Foment System. Electronic records retention: Revenue Procedure 98-25 plains the IRS requirements for retaining computerized account ing records. Emergency-response planning: Federal, state and local laws require dealers to have emergency-response plans. Employee drug testing: Union iaed dealerships must bargain with unions before implementing employer drug policies (not necessary for pre-emplcyment drug testing). The ADA prohibits employers from disaiminating against employees a applicants who have completed a are currently undergoing a drug treatment program, as long as they aren't currently abusing drugs. Employee Polygraph Protection Act: Prohibits dealerships from using polygraphs in pre-employment screening; allows use in limited cases where an employee is reasonably suspected of a workplaoe incident involving eooncmic loss to the employer. Employee Retirement Inocme Security Act (ERI8\): Dealers offering retirerent a health plans must, among other things, pro vide employees with plan information, keep records, and abide by fiduciary responsibi I ities and other cbl igations. Employment Verification Rjles: Dealerships must verify the employment eligibility of prospective new employees using 1-9 fam and proper support doamentation. UeeofE-verify is optional. Equal RayAct: Prohibitswagsdiscrimination on basis of see Estate tape The top ratewas 40 percent on amounts ever 5.45 million (for individuals) in 2016, and increased to $5.49 million in 2017. Family and Msdical Leave Act: Dealerships must post a notioe informing employees of their right to take limited, unpaid leave for personal and family medical emergencies and must comply with appropriate requests for such leave Special previsions apply to leave related to military servioe. Dealerships must display the revised Fami ly and IVbdical LeaveM poster from February 2013. Federal child-support enforcement regulations: Rsquires states to govern liens put on personal property--including vehicles--for overdue child support. Dealerships should check that child-support liens don't cist on used cars, and must place liens on wages of employees who are del inquent on chi Idsupport payments. Federal Civil Rights M: Bars employment discrimination on the basis of race, s<, ookcr, religion a national aigin. Prerents employers from asking job applicants oertain questions (such as age, marital status a childbearing plans). Prohibits workplaoe ssoral harassment, including behavtor that creates a hostile work environment. FTC ^possession Rile: Requires formal aooounting of money ool lected for repossessed vehicles. Federal wage-hour and child tor taws: Address mininxmwage and overtime pay standards and exemptions as well as standards for employing minors, including teen driving restric tions. Federal minimum wage is $7.25 per hour; state minimum wags rates may be hiefer. Genetic Information Nondiscrimination Act: Prohibits dis crimination based on health-related employee DI\A information. Health Insurance FbiletoilityaxIAxount^jilityA^: Generally prohibits health insurers from denying ocverage to workers who lose a change jobs and bars insures from eluding ocverage for pre-existing conditions for more than a year. IRS/DCL worker classification: Dealers must determine whether their workas are employees a independent contractors. The IRS and the Department of Labor use multi-factor legal stan dards and tests to evaluate this question. V\hen making worker classification decisions, dealerships should be careful, conser- 4 JANUARY 20 17 17cv1906 Sierra Club v. EPA - 6/22 Production ED 001523 00008296-00004 vative and prepared to document their decisions. Of greatest importance: the level of oontrol employers ercise ever waters as measuied by the means and manner of the work performed. The IRS \foluntary Classification Settlement Rogrsm is aimed at encouraging employs to admit past water misclassificatbns. IFB treatment of demo wshicles: Revenue Procedure 2001 -56 offers dealers alternative methods for determining the value of demo use by qualified salespeople and other dealership employ ees. It defines what constitutes limited personal use and stream lines leoord-teepirg requirements. IRS treatment of tool plans: Tool and equipment plans for ser vice technicians and other employees must amply with the IRSs requirements for business connection, substantiation and letum of oess payment. Mandatory workplace posters: Notices, such as "Your Rights Linder the RVLA," "Equal Employment (Opportunity Is the Law," "Federal Minimum \A&ge" and "Netice: Employee Fblygiaph Pro tection Ad," must be conspicuously displaced. Dealerships must display the reused Federal MinimumVtege and the Employee Fblygraph Protection Ad (EFFA) pesters fromAjgust 2016. Mental Health Ferity Act: Requires insurers and health plans to offer mental illness coverage comparable to that for physical illness. Group health plans may not set dollar limits on mental health care lower than limits for general medical and suigical serviaes. Nothing requires dealerships to provide mental health coverage, and certain exemptions apply. Miscellaneous record-keeping requirements: A multitude of requirements govern the length of time records must be main tained. Examples: Fteraonal and corporate inacme tax records must be kept at least three years; notification forms for underground storage tanks must be tept indefinitely; and copies of Form 8300 cash reports must be kept for five years. Nevvborns' and Mothers' Health Protection Ad: Employers and insurers must provide minimum hcspital-stay benefits. National Labor Ftelatiorrs Board (NLRB) unionization rules: Qcvem unionization activities, including employee rights, election rules, postings, unfair labor practices and others. CEHA Blood-Borne Ffethogens Role: Dealerships more than four minutes from an emergency health facility must have a program to respond to employees who suffer cuts. AI dealerships must have adequate first-aid kits. CSHA injury and illness recording and reporting requirements: Dealers with 10 or more employees are required to maintain a yearly log ofwork-related injuries and illnesses cm CEHAFam 300. Dealers must also complete a report on each workplace injury a illness that oocurs using CEHAFam 301. Ben if no injuries a illnesses have occurred in a calendar year, all dealers with more than 10 employees must fill out and post an annual summary of work-related injuries and illnesses on CEHAFam 30QA Dealers must also report the following eents to CEHA all work-related fatalities; all work-related inpatient hospitalization of one a more employees; all work-related amputations; and all work-related losses of an eye. Starting in 2017, heavy-duty truck dealerships with 20 to 249 employees per establishment must electroni cally submit to CEH\ CE-FAFom 30GA Both heavy-duty truck and I ight-duty car dealerships with mate than 250 employes per establishment must electronically submit toC6H\ CSFAFam 300,CS^F^30CAarxl(3^FbnTi301 starting in 2017. Section 89 of the Tax FteformAct: Dealerships are prohib ited from discriminating against Icwer-paid employees in their employee benefits packages. Section 179 exposing: Generally, businesses can expense qualified Section 179 property, subject to phaseout. Until further notioe, the total Section 179 deduction limitation is $500,000. The bonus depreciation provisions are extended to 2019, with a 50 percent level for 2016 and 2017,40 percent for 2018 and 30 percent for 2019. Uniformed Services Employment and Ffeerrployment Rights Arf (UEEFTW): Governs the employrrent and reemployment rights of rrarbers of the U.S. unifarred services. Wbrker Adjustment and Retraining Notification Act (APFM): Dealership rrust give 60 days' notice to workers before termina tion or store closings under certain drcumstanoes. All Departments (Customer) Americans With Disabilities Act (TEA): Rchibits discrimina tion against the physically handicapped in areas erf publicaoocmrrodation. Must mate reasonable aooerrmedations to facilities, such as by installing ramps and accessible parking spaces, drink ing fountains, public toilets and doois. CAN-SRAM (Controlling the Assault of Non-Solicited Porn ography and Marketing) Act: E-mailers must identify a com mercial message as an advertisement or solicitation and provide their physical postal addresses and a mechanism to opt out of future ccmmercial e-mails. If recipients opt out, senders must stop sending them ocnmercial e-mail within 10 busi ness days. The disclosure requirements don't apply to e-mails that relate to transactions or relationship, such as those con taining exclusively warranty information or recall-repair mes sages, a messages related to the ocmpletion of transactions requested by the consumer. No one may send commercial e-mails to wireless da/ices unless recipients provide express prior authorization to receive them. So that senders can recog nize wireless addresses, the FOC maintains a list of wireless domain names at transitim,fe,g)v/^b/pli^/[MHinl%TC Dtwilcad.htrnl. GCrrmercial e-maileis must check the list month ly. (Additional provisions prohibit deceptive headers, misleading subject lines and other spem tactics.) Atect message may also be considered an e-mail and therefore subject to the CAN-SRAMAot if it is sent to an e-mail address-- that is, if it has an Internet domain name after the "@" symbol (whether the e-mai I address is displayed or not). This means that no commercial tact message (deemed to be an e-mail), may be sent to a wireless device without "express prior authorization." IVferely having an "established business relationship" with the recipient is not enoucfi. Driver's Privacy Protection Act: Denies access to personal information in state motor vehicle records except for limited pur poses, such as driver safety, theft and recalls. Aso restricts the release a use of personal info for marteting. Electronic Funcfe Transfer Act (EFIA): ffTAand its mpterentirg "F^gulation E" govern a variety of electronic transactions. Cer tain provisions of F^gulatkn E apply directly to any "person" that engages in oertain activities a transactions, regardless ofwhether the person is a financial institution. Bsrrples of such transactions include: issuing access cfe/iaes (such as debit cards, personal identification numbers [PINs] a pa/roll cards); issuing a selling gift cards; initiating electronic check conversions; preauthorizing electronic fond transfers; oroperatingAllVk. FIC Privacy Rule: Dealers must issue notices of their privacy policies to their finanoe and lease customers and, in sore cases, to consumers when the dealer discloses nonpublic information about consumers to third parties. The rule also restricts disclo sures of nonpublic personal information and requires dealers to contractually limit their service providers' access to and use of that information. Dealas who correctly use a FIC model privacy notioe receive safe-harbor protection for the language used to describe their privacy policy. FIC prohibition against deceptive and unfair trade practices: Section 5 of the FICArf prohibits unfair and deceptive trade prac tices. For sample, the FIC has found oertain advertising practices to be deceptive, including recent safety inspection claims related to used vehicles that are subject to open safety recalls. FTC Safeguards Rjle: Dealers must develop, implement and maintain--and regularly audit--a comprehensive, written secu rity program to protect customer information and must ensure that theirserviae providers provide similar safeguards. FTC Telemarketing Sales Rule (HER): Imposes many of the TCFA restrictions (below) cn dealers who telemarket across state lines. Ftequires dealers who sell, a obtain parent authorization 6 JANUARY 20 17 17cv1906 Sierra Club v. EPA - 6/22 Production ED 001523 00008296-00006 for, goods or servioes during interstate phone calls to abide by the prohibition against numerous deceptive and abusive acts and to maintain certain records. Rohibits prereoorded telemarteting calls without a consumer's express written agreement, requires such calls to provide a key-press or voioe-activated opt-out mechanism at the outset of the cal Is, and requires the cal Is to ring for 15 seconds or four rings before disconnecting. FIC Warranty Riles: Pursuant to Mag-Moss, the FTC has issued Iwo rules governing written warranties. The `Disclosure Rule" provides disclosure requirements for written warranties, specifies language for certain disclosures and requires simple language in a single document. He "Re-Sale Availability Rile" detai Is the methods bywhich warrantors and sel lers must provide warranty terms before a sale. The reoently passed EAAbrrantyM al lews warrantors to oorply by posting warranty terms to an Inter net website, as long as the warrantor also provides consumers with a non-lntemet-based method to obtain warranty terms, and al lews sel lers to use electronic methods to provide consumers with warranty terms pre-sale. ire Cash-Reporting Rule: Dealers receiving more than $10,000 in cash in one transaction or in two a more related transactions must file IRSFirCEM Rorm 8300 with the IRSwithin 15 calendar days and must provide written notice that the report was filed to the person named on the report by January 31 of the fol towing year. "Cash" includes certain cashier's checks, traveler's checks, money orders and bank drafts. Magnuson-Moss Act: Dealers must give consumers oertain required information on warranties and limited warranties. Dealers are also generally prohibited from requiring routine serviae to be performed at their dealership as a oonditkon of a used-carwarranty. Office of Foreign Assets Control (CFAC) restrictions: Dealer ships may not enter into transactions with oertain sanctioned countries, governments, and specially designated organizations and individuals. Dealers should check the electronic list main tained byCFAC to ensure ocmpl ianoe. TeleptxreCbnsm^rProtedionArt(lCR^): Imposes numer ous restrictions on telemarketing, including the national and ocmpany-specific do-not-call (DNC) rules, calling-time restrictions, caller ID requirements, fax advertising rules, and restrictions on the use of autodialers and prerecorded messages. Fax ads rra/ be sent only to authored recipients and must include a phone num ber, fax number and toll-free opt-out mechanism (each available 24/7)on the first page of the fax ad. The FOCoonsidas tod messages to be "phone calls" under the TBA This means yxi cannot send a text message "solicitation" toa phone number on either the national DISC list (subject to the "established business relationship" and "prior express permis sion" eremptions to the national DISC rules) or yxir oempany-specific DSC list (to which there are no eemptions). See additional ted message restrictions under "GANEFAMAct." Rquires express written consent prior to any prerecorded or auto-dialed telemarketing call to a oell phone a text message. Ffeoent FCC guidanoe indicates a very broad view of what is an "auto-dialed" call a a ted message/You carrot send any ted mes sage whatsoever to a cellular telephone number--solicitation a rot, whether the number is on a DSC list a not--using an "autodi aler" unlessycu have the called consumer's "priorerpress consent." USA PATRIOT Act: Dealers must search their records and provide information about individuals or entities with whom they conducted transactions a created aooounts if requested by the federal Rnancial Crimes Enforcement Ifetwork. Dealers are tem porarily exempt from the law's anti-money-laundering program requirements. ^ New- aid Used-Vehicle Sales Deparfrnents ATBricanAjtorrobile Labeling Act: New cars and light trucks must have a dorestic-parts content label shewing percentage of U.S. a Canadian parts; countries contributing more than 15 peroent of the parts; origin of engine and transmission; and location of vehicle assembly. Dealers must ensure that labels remain on vehicles until sold. Corporate Average Fuel Economy (CAFE) and Greenhouse Gases (GKi) Rules: N-flSA and ERA rules on CAFE and G-GB govern the fuel-eooncrry performance of all light, medium-duty and heavy-duty vehicles, which affects their design, perfornanos and cost. The rules also impact the use of alternative technologies and fuels. Diplomat vehicle purchases: The State Department's Office of Foreign Missions must approve a diplomat's vehicle purchase before that diplomat's tax sorption request me/ be honored. DCErtEPA gas-mileage guide: Dealers must mate this guide available to prospective new-vehicle buyers upon request. Down load the guide from fuefeooncrry.gcv. Federal bankruptcy lav Dealerships should perfect security interests within 30 days after a customer fates possession of a vehicle, regardless of state law. Otherwise, if the customer files for bankruptcy within 90 days of when the financing agreement is signed, the bankruptcy trustee avoid the lien. Dealerships fail ing toperfectliereinatnrelyrmarrBrrm^ be liabte for ary toes. JANUARY 2017 7 17cv1906 Sierra Club v. EPA - 6/22 Production ED 001523 00008296-00007  FTC Door-To-Door Sales Rjle: Qves oonsurrers a three-da/ "cooling off" period only for sales not oonsurrmated at the deal ership. Coes rot apply to auctions, tent sales a other temporary plaaes of business if the sel ler has a permanent plaoe of business. FTC guidelines for fuel-mileage advertising and altemative- fueled-vrehicle advei eling: Coaler and manufactur er fuel-eooncrry advertisements must state that the numbers are estimates and ocrne from EFA; alternative-fueled vehicles must be properly labeled. Ff Used Gar Rile: "Buyers Guides" are required on all used vehicles offered for sale, disclosing whether the vehicle is offered "as is" a with a dealer warranty, other non-dealer warranty dis closures and servioe oontract availability. Coalers must use F1C requited tom Buyers Guide. Ncte that a new version of the Buyers Guide was adopted in 2016. Coalers must use the new version of the Buyers Guide by January 27,2017, but dealers may use their remaining stock of Buyers Guides for one ^ear. Gray-market vehicles: EFA, Cepartrrent of Transportation and Customs restrict the importation/sale of vehicles lacking safety a emissions certification. IFS treatment of salesperson incentives: Factory incentives paid directly tosalespecple are not wages for tax purposes. LIFO (last-in/first-out) inventory accounting method: The use of the LIFO inventory method requires ocmplianc with the oonfoimity requirement. Ffeavy-highvvay-vehicle excise tax: A12 percent edse tax generally applies to the first retail sale of (1) truck chassis and bodies with a gross vehicle weight rating (GJ(AR) in excess of 33,000 lb. (Class 8); (2) truck trailer and semitrailer bodies with a QXAR in ecess of 26,000 lb. (Gasses 7 and 8); and (3) "highway tractors," unless they have aQJtARof 19,500 lb. a less (Gass 5 and under) and a gross combined weight rating of 33,000 lb. a less. Cealers selling Gass 5 vehicles with rrore than 33,000-lb. gross combined weight rating a Gasses 6 a 7 vehicles should apply the "primary design" test to determine if a vehicle is a tax able tractor or a nontaxable truck. Motor vehicle tax credits: Consumers rcey be eligible for up to a $7,500 personal federal tax credit when they buy a qualifying plug-in electric vehicle or dedicated electric vehicle at a dealer ship ("B/TaxCredit"). Eigibility for the B/TaxCredit is based on a taxpayer's income and tax status. Monroney sticker (Price Labeling Law): Dealerships must keep stickers on new passenger cars showing the manufacturer's suggested retail price, plus other oosts, such as options, fed eral taxes, and handling and freight charges. Stickers also include ERA'S na/ised fuel-eooncmy information and N-llSANZAP revised crash-test star ratings. Dealerships that alter covered vehicles must attach a second label adjacent to the Monroney label, stat ing, `This vehicle has been altered. The stated star ratings cn the safety label may no longer be appl icabla " No size or foim of this label is specified, only that it be plaoed as does as possible to Monroney labels on autemobi les that (1) have been altered by the dealership and (2) have test results posted. National Fli^TAayTrafficSafety Administration (N-fISA) alter ation and tire-placarding rules: Significantly altered newvehides must have labels affixBd identifying the alterations and stating that they meet federal safety and theft standards. Tire-placarding and -relabeling rules require a new tire information placard/label wherever parts a equipment are added that m=y reduce a vehicle's cargo-carrying capacity, a when replacement tires differ in sis a inflation pressure from these referred tocn the original. 17cv1906 Sierra Club v. EPA - 6/22 Production 1 t V 1 ED 001523 00008296-00008  N-fISA odcmeter rule: Prohibits ocfcmeter removal a tamper ing and misrepresention of odometer readings. Squires record keeping to create a "paper trail," and odcrreter disclosures on titles. Vehicles with a greater than 16,000-lb. gross vehicle weic^it rating and these 10 model years old a older are ererrpt. (\HT5A recall regulations: New vehicles and parts held in inventory that are subject to safety recalls must be brought into ocrrpl ianoe before del ivery. NH15A safety belt/airbag deactivation: Dealerships may install airbag switches for consumers with N-fT3\ authorization. Dealerships must be responsive to oonsirrer requests for rearseat lap/shoulder safety belt retrofits in older vehicles. I\He\ tire regulations: Rule requires proper replacement or modification of the tire-information label when replacing tires a adding weight before first sale or lease. Also, aonsurers must be given registration cards when buying new tires a tires must be registered electronically. Gher rules govern handling and disposal of recalled new and used tires. School van sales: Dealers may not sell, lease or give away large, new passenger vans with more than 10 seating positions if they know the vehicle will be used to transport students to a from school a school activities. Schools must purchase a lease a school bus or multifunction school activity bus for such purposes. Uniform capitalization (UNICAP): Dealers who (1) "produce" properly a (2) aoquire it for resale if their average annual gross receipts ever the three preceding tax years exoeed $10 million must amply with the UNICAP requirerents contained in Section 263Aof the Internal F^enue Code. F^enue FAooedure 2010-44 creates two safe-harbor methods of aooounting, which dealers rmjelect by filing Form 3115with the RB, that generally permit dealers toe<pense, instead of capitali$, all handling and storage oosts at certain dealership facilities. Dodd-Frank Financial Fteform Law: Comprehensive legisla tion enacted in July 2010 created a new, independent Consumer Financial Ftotectkn Bureau and granted it unprecedented author ity to regulate financial products and servioes. Dealers engaged in three-party financing are eduded from the authority of the bureau and remain subject to regulation by the Federal Ffeserve Board, the Federal Trade Commission (which has been given streamlined authority to declare dealer practices as unfair or deoeptive) and state consumer protection agencies. Rnanoe sources, including dealers who engage in B-FH financing, are subject to the bureau's jurisdiction. The Dbdd-Fiank law also created saeral new obliga tions for creditors, including additional disclosure requirements for risk-based pricing and adverse-action notioes under the Fair Credit Importing Act (Section-110CF). Hus, it oontains a require ment to oollect, report to the federal geverrment, retain, and mate available to the public upon request certain data collected in credit applications from arall, waren-owred and rrirDrity-cwned businesses. Dealers are tarpoiarily eerpt from this requirarent pending promulgation of specific regulations. Equal Gedit Cpportunity Act (BXA): F^gulatkn B prohibits discrimination in credit transactions based on race, sex, oofor, marital status, religion, national origin, age and pufolic-assistanoe status. The government interprets this prohibition as applying not just to intentional discrimination, but also to credit practices that result in a negative "disparate impact" on consumers based on one of these prohibited factors. The Consumer Financial [detec tion Bureau (CFFB) addressed disparate impact discrimination in March 2013 guidanoe to indirect auto lenders (CFFB Bulletin 2013-02). In addition, the dealer/creditor is required both to notify applicants in a timely fashion of actions taten on--and reasons for denying--applications, and to retain certain reoords. (See also "Dodd-Frank Financial Fdeform Law," above, for a descrip tion of rBwsmall-business loan data collection requirements.)An optional BOCAocmplianoe program tarplate is available to deal ers at nada.org/faircredit Fair Gedit Fteporting Act (FCFA): Dealers are restricted in their use of credit reports for consumers, job applicants and employees. Credit reports generally may be obtained only pursu ant to consumers' written instructions or if consumers initiate a business transaction (not if they merely talk with salespeople). Dealers must give jcb applicants and employees a separate docu ment informing them that a credit report may be obtained and must obtain prior, written authorization to access the report. Dealers generally m=y not share credit information with affiliates unless they give consumers rotiae and the opportunity to opt out. If dealers tateadverse action based on the report, they must notify consumers and follow additional procedures with job applicants andarplcyees. Fair aid Accurate Gedit Transactions (FACT) Act of 2003: This law significantly amended FCF3A by adding several identitytheft prevention and other duties. Duties include responding to requests for reoords from victims of D theft and to fraud and active-duty alerts on credit reports; disposal requirements for credit report information; opt-out disclosure formatting require ments for prescreened credit solicitations; truncating the e<pi- JANUARY 2017 9 17cv1906 Sierra Club v. EPA - 6/22 Production ED 001523 00008296-00009 ration date and all but the last five digits on electronically printed credit and debit card receipts provided to purchasers at the point of sale; the Federal Reserxre's Regulation FF restrictions on obtaining, using and sharing "medical information" in credit transactions; the FTC Red Rags Rjle, which requires creditors and financial institutions to develop and implement a written Identity Theft Prevention Program that contains procedures to identify, detect and respond to "red flags" indicating the pos sibility of identity theft; the FTC Address Discrepancy Rjle, which requires Leers of credit reports to develop and implement proce dures to verify a customer's identity when receiving a "Notice of Address Discrepancy" from a oonsirner reporting agency; the FTC Affiliate IVbrketing Rule, which generally requires a business to offer customers the opportunity to opt out of receiving solicita tions from the business's affiliates before affiliates rmj market to the customers; and the Risk-Based Pricing Rjle, which gener ally requires initial creditors to issue either risk-based pricing notiaes to consumers to whom credit is granted but on relatively unfavorable terms, a credit score disclosure exception notiaes to all oonsirner credit applicants. Additional requirements apply to businesses that furnish negative information about oonsimers to oonsimer reporting agencies. FTC Credit Practices FMe: Dealers are required to provide a written disclosure statement to a cosigner before the cosigner signs an installment saleoontiact. Dealers cannot "pyramid" late charges (that is, add a late charge onto a payment made in full and on time when the only delinquency was a late charge on a pre/ious installment). FTC Holder-in-Due-Course Ftoile: Preserves the consumer's right to raise claims and defenses against purchasers of con sumer credit contracts (with aufcmcbi le sales, it protects consum ers who buy cars from dealerships on credit). V\hen dealerships sell credit contracts to lenders, oonsimers are obligated to pa/ the lenders instead of the dealerships. Under the rule, if a dealer ship engaged in fraud a made misrepresentations in selling a car on credit, a consumer could raise the dealership's conduct as a defense against the lender's demand for payments. Dealerships must ensure that their credit contracts contain the precise disclo sure required fcy the rule. Gramm-Leach-Bliley Act: See "FTC Privacy Rjle" and "FTC Safeguards Rule" under "AI Departments (Customer)." Producer-Owned Fteinsurance Companies (FUTCs): IRS Notioe 2004-65 removed certain reinsurance arrangements as "listed transactions," but states that the IRS will continue to scrutiny transactions that shift income from taxpayers to related companies "purported to be insurance companies that are subject to little or noU.S. federal inacme tax." Truth in Lending and Consumer Leasing Acts: Regulations Z and M cover consumer credit and consumer leasing transac tions, respectively, specifying information to be disclosed to a consumer before completing the transaction, and information to be disclosed when advertising consumer credit transactions or leases. For example, dealers who advertise a lease dcwn parent or monthly parent amount must disclose in lease ads that the advertised deal is a lease; the total amount due at lease signing; number, amount and period (for example, monthly) of parents; and whether a security deposit is required. Service and Parts Department Glean Air Act Dealerships may not tamper with, replace a remove emissbns-oontiol equipment, such as catalytic convert ers. CFC recycling regs require dealership air-conditioning techs to obtain certification and to use certified recycling and recovery equipment to capture spent refrigerant, including l-FC-134a and other non-cnre-depleting refrigerants. The act also regulates any fuels dealers store and dispense, as well as the alternative fuels motorists use, including gaschol. It restricts amissions from sol vents and chemicals. Clean \Mer Act: Sets standards for regulation of wastewater and stam water at dealerships and comprehensive rules govern ing aboveground oi I storage tanks. Department of Transportation (DDT) hazardous-materialshandling procedures: Require parts employees who bad, unbad and package hazardous products, such as airbags, batteries and brake fluid, to be trained in safe handling practices. FTC Used Parts Guide: Prohibits misrepresentations that a part is new a about the condition, dent of previous use, recon struction or repair of a part. Previously used parts must be clearly and conspicuously identified as such in advertising and packag ing, and, if the part appears new, on the part itself. IKS Gore Inventory Valuation: Ffevenue Procedure 2003-20 creates an optional method for valuing core inventories for these usirglrovrercfGCstalVbrtet^iluatbnlVfethod. LIFOFIFD inventory accounting method: Ffevenue Ftocedure 2002-17 provides a safe-harbor method of aooounting that autho rizes the use of replacement cost to value year-end parts inventory. NKISA tampering rules: FTohibit dealerships from rendering inoperative safety equipment installed on vehicles in ccmplianoe with federal law. 10 JANUARY 20 17 17cv1906 Sierra Club v. EPA - 6/22 Production ED 001523 00008296-00010  NHEA tire rules: Dealerships rrust report sales of defective tires when the tires are sold separately from vehicles, and must properly manage recalled tires. Q3-A asbestos standards: Dealerships must use certain pro cedures during brake and clutch inspections and repairs to mini mis vvorkplacee<pcsure.V\i&ter, aerosol cleaners or brakewashers may be used to ocrrplywith the standard. C8-A Hazard Ocrrmnication Standard (right-to-know Isas): Dealers must inform employees about chemical hazards they rcaj besqxsed to in theworkplace, keep chemical product information sheets on-site and aooessible, and train staffers to properly han dle the hazardous materials theyworkwith. Also, EB\'scrrmrmunity ric^t-to-know rules require dealers to list annually with state and local authorities tanks holding more than 1,600 gal Ions. C6J-A lock-out/tag-out procedures: Bqolain what service departments must do to ensure machines, including vehicles, are safely disengaged before being serviced. QUA workplace health and safety standards: Bctensive regulations aver a multitude of workplace issues and practices, from chemical labeling requirements to the number of toilets required. Example: Dealerships must determine if workplace hazards warrant personal protective equipment and, if so, to train employees on its use. \ferbal or online reports must be made within eight hours of any incident involving the hospitalization or death of anyworker. Fteource Conservation and Recovery Act (RDRA): Compre hensive environmental law regulating many dealership functions, including underground storage tanks and the storage, manage ment and disposal of used oil, antifrese, mercury products and hazardous wastes. Uhdergiound tanks must be monitored, tested and insured against leaks; leaks and spills must be reported to federal and local authorities and cleaned up. The law also regulates new-tank installations. Dealers must obtain EPA ID numbers if they generate more than 220 lb. per month (about half of a 55-gallon drum) of oertain substances and must use Decertified haulers to remove the waste from the site; dealers must keep records of the shipments. Used oil should be burned in spaas heaters or hauled off-site for recycling. Used oil filters must be punctured and drained for 24 hours before disposal. Safe Drinking \Nater Act: To protect underground drinking water from contamination, dealerships maj be barred from dis charging waste liquids (such as used oil, antifreae and brake fluid) into septic system drain fields, drywells, oesspoolsor pits. Superfund (Comprehensive Environmental Response, Com pensation and Liability Act [CEFQA]): As waste generators, dealerships may be subject to Superfund liability. Carefully select companies to haul waste off-site. Dealers can deduct the oost of cleaning up oontaminated soil and water in the year it's done. Dealers msy qual ify for an sorption from I iabi I ity at sites involv ing used oil managed after 1993. The service station dealer serption application (SEDE) requires dealers to properly manage theiroil and toaooeptoil from do-it-yourselfers. INICAP: S3e"New-artoU3ed-\fehicleSalesDepartments." toyshop Clean Ar Act: National paint and hazardous air-pollution rules require reformulated, envircrrrentally safer paints and finishes, special handling procedures, and reoord keeping. EPA hazardous-waste rules: See "RDRA," under "Service and Parts Department." CSHAhtazard Communication Standard (rk^t-to-know Isas): See "Service and FSrts Department." C6HA Respiratory Protection Standard: Requires written programs describing how to select, fit and maintain respirators to protect body shopworkers from hazardous chemicals. QUA workplace health and safety standards: Bctensive regulations affect body shops in many ways, including man dating the use and care of protective equipment such as face masks, gloves and respirators. The he< chrome standard limits air amissions during sanding and painting. (See also "Service and F^rts Department. ") INIQP: See "New- and UbedAfehicleSales Departments." VIN and parts marking: Dealers may not alter, destroy or tamper with vehicle identification numbers or antitheft parts- marking ID numbers and should use only properly marked replacement parts. Doug Greenhaus, Paul Metrey, Brad Miller and Lauren Bailey of the NADA Legal and Regulatory Affairs Department contributed to this guide. JANUARY 2017 11 17cv1906 Sierra Club v. EPA - 6/22 Production ED 001523 00008296-00011 NADA ,^g National Automobile Dealers Association Legal axl F^gulatoryAffairs 8400V\stparkDri\/e Tysons, VA 22102 703.821.7040 regulatoryaffiai rs@iacla.org nada.org Jamary 2017 17cv1906 Sierra Club v. EPA 6/22 Production ED 001523 00008296-00012