Should Dealerships Employ Data Compliance Officers as is Mandated
Transcript
Kelly : So, how common is it for a dealership to actually employ a compliance officer to oversee data? Or do they generally go after third parties or bring in subcontractors to evaluate and ameliorate their risk as an outsource? n
nKen : Well, I think from a technology standpoint, you know, there’s probably a dealership level of sophistication based on size car sales, where they start to outsource technology, and then even bring in, you know, and have a technology staff that may be overseas and have third party assessments to ensure that everything’s secure and they have good procedures in place.n
nBut from a compliance officers standpoint, the government mandated that dealerships have a compliance officer defined when they put the red flags law in seven to 10 years ago, when they put the red flags and they they dictated their expectations of a dealership and they said that dealership is, you know, basically a lender, they consider dealerships lenders because of the financial institution. n
nYeah, I’m an arranger credit model. So when they came out with the red flags law, they said you need to have a policy on site. And you need to have a defined compliance officer and he needs to sign this document. And they outlaid a bunch of expectations of things that they wanted dealers to have in place for those red flag regulations. So it should be common. If dealers don’t have one they need to get one quickly. And because it’s also part of the new safeguards regulation that’s going into this year you need to have wealth and they classify it as I believe it’s called a well qualified individual. Let’s say you can hire an intern and make him your compliance officer. You need to have someone that knows how to manage this process and manage your compliance functions and your safeguards within your dealership.nn
nKen : Well, I think from a technology standpoint, you know, there’s probably a dealership level of sophistication based on size car sales, where they start to outsource technology, and then even bring in, you know, and have a technology staff that may be overseas and have third party assessments to ensure that everything’s secure and they have good procedures in place.n
nBut from a compliance officers standpoint, the government mandated that dealerships have a compliance officer defined when they put the red flags law in seven to 10 years ago, when they put the red flags and they they dictated their expectations of a dealership and they said that dealership is, you know, basically a lender, they consider dealerships lenders because of the financial institution. n
nYeah, I’m an arranger credit model. So when they came out with the red flags law, they said you need to have a policy on site. And you need to have a defined compliance officer and he needs to sign this document. And they outlaid a bunch of expectations of things that they wanted dealers to have in place for those red flag regulations. So it should be common. If dealers don’t have one they need to get one quickly. And because it’s also part of the new safeguards regulation that’s going into this year you need to have wealth and they classify it as I believe it’s called a well qualified individual. Let’s say you can hire an intern and make him your compliance officer. You need to have someone that knows how to manage this process and manage your compliance functions and your safeguards within your dealership.nn