F&I Managers Help Fight Terrorists

F&I managers have an important additional responsibility as dealerships must comply with the new USA Patriot Act, intended to thwart money laundering, especially involving terrorism. Since the F&I manager's office acts as a central clearinghouse for all vehicle sales in a dealership, dealer accountants say the F&I manager is ideally positioned to function as the compliance officer whom dealers must

F&I managers have an important additional responsibility as dealerships must comply with the new USA Patriot Act, intended to thwart money laundering, especially involving terrorism.

Since the F&I manager's office acts as a central clearinghouse for all vehicle sales in a dealership, dealer accountants say the F&I manager is ideally positioned to function as the compliance officer whom dealers must designate to oversee the program.

Each dealership is required to undertake three other measures in addition to appointing a compliance officer. They are:

  • Develop internal procedures and controls

  • Train employees to follow the program

  • Make sure independent audits are conducted to monitor program compliance.

The USA Patriot Act, which was enacted after the Sept. 11 terrorist attacks, aims to establish links between federal law enforcement agencies and financial businesses, now including dealerships, concerning accounts and transactions that may involve terrorist activity and money laundering.

Several of the terrorists who hijacked airplanes on Sept. 11 were known to have purchased new cars for cash. Dealerships prior to enactment of the Patriot Act were — and still are — required to report cash transactions over $10,000 to the IRS on Form 8300.

Now, under the new rules, Form 8300 is re-designated as “IRS Form 8300/FinCEN Form 8300” and is being shared with the U.S. Department of Treasury's Financial Crimes Enforcement Network (FinCEN). In addition to the reporting requirements, Section 314(a) of the Patriot Act imposes a new obligation on dealers in the ongoing search to uncover potential terrorists.

Dealers must respond to requests for information from regulatory authorities on persons who have bought cars. This adds to the F&I manager's duties as a compliance officer, inasmuch as he or she has obtained personal data on all customers as part of the financing and insuring process.

The FBI, or other federal law enforcers, will have the ability to provide names and identifying information about suspected terrorists to FinCEN, which can access financial institutions to check on accounts and transactions.

As part of overseeing the new program, F&I managers should make sure they and the vehicle salespersons verify the identities of all customers, including passports as well as drivers' licenses, credit reports and Social Security numbers.

'Net Threat to Dealers?

There are websites for everything — even dishing off a vehicle lease! Whether the Internet will pose a threat to dealers who would like to control their own lease returns remains to be seen, but here's the rundown:

Leasetrader.com — $24.95 registration fee to a buyer, $39.95 for the first month of a seller's listing or $99.95 unlimited; transfer fee of $149 to a buyer, up to one monthly lease payment to a seller.

Leasetrading.com — no buyer fees, $39.95 to the seller plus 5% of remaining lease payments.

Swapalease.com — $24.95 registration fee and no transfer fee to a buyer; $49.95 transfer fee to a seller plus a $95 transfer fee.

Lessors still are liable to pay the balance of any mid-contract transferred lease, which some lessors forbid - or, if they allow, will insist on collecting end-of-lease fees.

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