How did you feel on:

  • The last day of school before summer vacation?
  • After finalizing your divorce?
  • Pressing “submit” on a large application or proposal?
  • Paying off a loan?
  • After filing your taxes?

You felt amazing! You felt alive and without responsibilities! Ahhhh!

Some dealers felt this way when the current President was elected. They felt it was going to be a golden era where they would make lots of money and be free of regulatory interference.

Hopefully, all dealers are always making lots of money. As for the lack of regulatory enforcement? Nothing could be further from the truth – regulators are engaged and looking for bad actors (or alleged bad actors).

Most business owners would never consider themselves as a “bad actor,” because they never intended to harm anyone (with an emphasis on “intent.”) Lawyers and regulators have no concern over this notion. They act when they see what they perceive as harm.

Why Regulatory Enforcement Never Truly Disappears

There are both political and legal forces at play here. Let’s start with the politics.

Number One:

The Wall Street Journal recently reported that “America’s two political parties have traded places economically. Where American once referred upper-income ‘country club Republicians’ and blue-collar ‘lunchpail Democrats,’ they now see a working-class GOP and, in many ways, a professional-class Democratic Party”[1] Said differently, the Republican party has become more populist.

This populism means the party will need to respond to claims which affect “the small guy.” That means, alongside removal of many regulatory barriers, the Republicans will have to walk a fine line about enforcing laws, rules, and regulations that would protect “the little guy.”

You may not agree here and we can agree to disagree. But there’s more.

How State and Federal Powers Expand Compliance Exposure

Number Two:

On January 15, 2025, Rohit Chopra – former Commissioner of the Federal Trade Commission and the third Director of the Consumer Financial Protection Bureau – and Seth Frotman wrote an article entitled “State Enforcement As A Federal Legislative Tool,” for the Harvard Journal On Legislation.

They make the argument (in thirty-eight pages) as a result of the 2008 Consumer Financial Protection Act (“CFPA”) that “Among the most important features of the CFPA is its embrace of cooperative federalism.”[2]

Cooperative federalism is a term which means that states may enforce federal laws thereby expanding states into more policy areas.

The article further asserts that there is “wide, bipartisan success that state law enforcement has had in bringing claims against consumer finance companies.”[3]

This means that the “attorneys general and other appropriate regulators of states, territories, and Indian tribes-the ability to enforce federal consumer financial protections without being beholden to the priorities of federal agencies.”[5]

Why Compliance Systems Protect Dealers from Costly Consequences

So what’s a dealer to do? I have an answer.

First, ask questions of yourself and your dealership practices. What controls do I have in place to catch problems? Pull the top three (3) grossing deals – new or used – and crawl through the paperwork.

And what happens when these problems go unattended? Here’s an example:

“Tina McPherson bought a used vehicle from Suburban Ann Arbor, LLC….”[9]

McPherson sued and was awarded $38,000 in actual damages and $350,000 for punitive damages to punish the dealership for its conduct.[10]

Here’s another example of why having a Compliance Management System (CMS) can save you money and give you that “we’re free” feeling. If you can show a judge or regulator that mistakes are anomalies, and not your policy, it’s as good as a “Get Out of Jail Free” card in Monopoly.

Dealers who run toward compliance, with the right systems, the right questions, and the right mindset will be rewarded with sleeping better, because they are knowingly and actively protecting their business.

It’s like body armor for your business and that’s the feeling of “I’m free.”

[1] Wall Street Journal, “The Problematic Politics of Trump’s Bill: More Lower-Income Americans Are Voting GOP,” by Aaron Zitner, Anthony DeBarros, and Danny Dougherty, July 2, 2025
[2] Harvard Journal On Legislation, “State Enforcement As A Federal Legislative Tool,” by Rohit Chopra and Seth Frotman, January 15, 2025
[3] Harvard Journal On Legislation, “State Enforcement As A Federal Legislative Tool,” by Rohit Chopra and Seth Frotman, January 15, 2025
[4] Harvard Journal On Legislation, “State Enforcement As A Federal Legislative Tool,” by Rohit Chopra and Seth Frotman, January 15, 2025
[5] Harvard Journal On Legislation, “State Enforcement As A Federal Legislative Tool,” by Rohit Chopra and Seth Frotman, January 15, 2025
[6] Harvard Journal On Legislation, “State Enforcement As A Federal Legislative Tool,” by Rohit Chopra and Seth Frotman, January 15, 2025
[7] Harvard Journal On Legislation, “State Enforcement As A Federal Legislative Tool,” by Rohit Chopra and Seth Frotman, January 15, 2025
[8] Washington Post, “I just graduated with a philosophy degree. Here’s my message to the Class of 2025.” June 25, 2025
[9] Spot Delivery, “Reprehensibility of Dealership’s Conduct Warrants Punitive Damage Award of More than Nine Times Compensatory Damages,” by Shelley B. Fowler, June, 2025
[10] Spot Delivery, “Reprehensibility of Dealership’s Conduct Warrants Punitive Damage Award of More than Nine Times Compensatory Damages,” by Shelley B. Fowler, June, 2025
[11] Spot Delivery, “Reprehensibility of Dealership’s Conduct Warrants Punitive Damage Award of More than Nine Times Compensatory Damages,” by Shelley B. Fowler, June, 2025