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Greetings!
We want to begin the new year by thanking you for your business. Over the past three years we have made many changes to better serve you, and most of those changes came from your ideas or requests. We continue to welcome your suggestions. This past year we made changes to our Web Site - the newest being a new Domain address: www.capsscolorado.com Our old site at www.capss.biz is still active, but you will see us utilizing the capsscolorado.com for our e-mail. You can now order all your form needs from our website E-Store, and we are in the process of adding other supplies to meet your needs. If you find a link is not active, we are working on adding those items. You can call us with those needs. We are also reporting Dealer Board news each month on our Home Page. The last several Board meetings have focused on TRUECar and sales licensing issues. The Dealer Board minutes are posted on the AID web site, but they are usually not published for at least 60 to 90 days after the meeting. The Titles and Registration Section on our Home Page will notify you of upcoming form changes by the State of Colorado. We post these changes as soon as we are notified by the state. If you order forms from us that are obsolete, we will advise you of that upon receiving your order. No one likes to count days when issuing temporary permits - so we have added a Calendar to save you time. Click on the "blue" bar and it shows the 60th day. Remember that temporary permits cannot exceed 60 days, so if the expiration date falls on a Saturday, Sunday, or holiday, back up the expiration date to the previous business date. Be sure to begin 2012 in Compliance! We have included several articles in this newsletter to keep you on-track and out of trouble - Updating Compliance Posters, Registering to Extend Credit, Reporting Dealership Changes, Cash Transaction Reporting, OFAC Compliance, and Risk-Based Pricing Notices. Call Connie at 970-209-7499 or Mary at 303-478-2538 if you have questions.
Thank you again for allowing us to serve you.
Sincerely,
Mary Marvin & Connie Hatch
CAPSS LLC
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UCCC Compliance | |
Register to Extend Credit
Dealers must register to extend credit with the Colorado Office of Attorney General if they fall into the following categories:
- A person or business that sells or leases vehicles to consumers AND:
- arranges financing from others
- provides its own financing
- if your name appears on a retail installment contract or consumer lease as the creditor or lessor, even if you immediately sell or assign the contract to a finance company or bank
- If you make consumer credit sales or leases AND:
- the contract includes a finance charge or interest
- the written agreement consists of 5 or more installments
Payments are due within 30 days after commencing business in this state and on/or before January 31st of each year thereafter. If you are required to pay the fee and fail to do so:
- a late fee of $5.00 per calendar day will be imposed if payment is not received by March 1st, AND
- Customers have no legal obligation to pay any of the finance charges due under the credit transactions.
If your consumer credit sale agreements do not contract for a fiance charge, you are not required to file notification.
To file the Colorado Uniform Consumer Credit Code Retail Sales Notification Form and pay the $100 yearly fee, click here: Colorado Office of Attorney General
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Report Dealership Changes | | |
Dealership Changes
As former investigators, it was common for us to find dealerships that had made changes during the year - but had not reported those changes to the Auto Industry Division. Failure to report changes can result in the loss of your license!
Take time to review this list and immediately report changes to the Division:
- Change of Location
- Additional Location
- Dealer (or Wholesaler) Name Change
- Class Change (i.e. from used dealer to franchise dealer)
- Ownership Change
- Addition or Termination of Salespersons
For instructions and forms to report these changes, click here: Dealer Forms If you have questions regarding these changes, call us!
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Cash Transaction Reporting | | |
Compliance with IRS Cash Transaction Requirements!
When receiving over $10,000 in cash from a purchaser of a motor vehicle or powersports vehicle within a 12 month period, the dealer must report that transaction to the Internal Revenue Service and the Financial Crimes Enforcement Network on IRS Form 8300. The following must be reported: - One lump sum over $10,000
- Installment payments that cause the total cash received within 1 year of the initial payment to total more than $10,000
- The sum is received in the course of your business from the same buyer (or agent of the buyer) and is received in a single transaction or related transactions
The form 8300 must be filed within 15 days of receiving more than $10,000 cash. Cash includes: - coins and currency
- cashiers check, bank draft, travelers check or money order if it has a face amount of $10,000 or less AND is combined with another form of cash to total over $10,000
Proceeds of loans and personal checks are not reportable. Cashiers checks, bank drafts, travelers checks or money orders with a face value of over $10,000 are not reportable (the issuing finance insitution will have already reported these). A dealer must also give a written statement to each person named on the Form 8300. The statement must show the name and address of your business, the name and phone number of a contact person, and the total amount of reportable cash you received from the person during the year. It must also state that you are also reporting this information to the IRS. You must send this statement to the buyer by January 31st of the year after the year in which you received the cash. Keep copies of each Form 8300 for 5 years. For IRS Form 8300 and instructions, click here: IRS Form 8300 |
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OFAC Compliance | | |
Are you remembering to check OFAC?
OFAC stands for:
- Office of Foreign Assets Control
- OFAC is regulated by the United States Department of Treasury
It administers and enforces economic sanctions primarily against countries and groups of individuals such as terrorists and narcotics traffickers.
OFAC requires financial institutions, which include car dealerships
- to verify their customer's identity
- Check their customer's names against the blocked list
Penalties for non-compliance are severe:
- Fines from $50,000 to $10 million
- Imprisonment up to 30 years
- Or both
Dealers have an absolute compliance obligation under OFAC. The Department of Treasury website's SDN list to conduct your search is:
Other free websites to conduct your search with a printer-friendly version are:
If you have checked a name manually or by using software and find a match, you should do a little more research.
- Is it an exact name match, or very close?
- Is your customer located in the same general area as the SDN (specially designated national)
- If not, it may be a "false hit"
- If there are many similarities, contact OFAC's "hotline" at 1-800-540-6322
Keep the search records for 5 years.
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Risk-Based Pricing | | |
Dealers Subject to Risk-Based Pricing Rule
Effective January 1, 2011, dealers became subject to the Federal Trade Commission's Risk-Based Pricing Rule. A Risk-Based Pricing Notice must be provided to consumers in certain circumstances.
- A dealer must provide a risk-based pricing notice to a "consumer when the dealer used a consumer report in connection with an application of credit, and
- grants, extends, or provides credit to the consumer on material terms that are less favorable than the most favorable terms available to a substantial proportion of consumers, based in whole or in part on the consumer report
- applies only in connection with credit that is primarily for personal, household or family purposes
The risk-based pricing notice requirement is designed primarily to improve the accuracy of consumer reports
- by alerting consumers to the existence of negative information on their consumer reports
- and allow consumers to check their consumer reports for accuracy and correct any inaccurate information
If you are providing a risk-based pricing notice to consumers you finance
- you must identify who gets the notice
- dealers that use credit scores to set the material terms of credit must determine a credit score which represents the point at which approximately 40% of its consumers have higher credit scores, and 60% of its consumers have lower credit scores
- must provide a risk-based pricing notice to each consumer who has a credit score lower than the cutoff score
- consumers who get the risk-based pricing notice are entitles to a free credit report
As of August 15, 2011, your notice must include the following information
- the numerical credit score used in making the credit decision
- the range of possible scores under the model used
- up to four factors that adversely affected the consumer's credit score or up to five factors if the number of inquiries made with respect to that consumer report is key
- date on which the credit score was created
- name of the person or entity that provided the credit score
A dealer may choose to comply with the Risk-Based Pricing Rule
- by providing an "exception notice" to every consumer who applies for credit through the dealership
- the "exception notice" does not require a risk-based pricing notice to anyone,
- but you are required to provide a written credit score disclosure notice to every customer who applied for credit through your dealership and they are not entitled to a free credit report
The Federal Trade Commission, CAPSS and the National Automobile Dealer's Association recommend using the "exception notice" . |
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Upcoming Training Seminars | |
 Mastery Exam Seminar:This seminar is an on-line class that can be taken from your own computer at any time. We guide you through the confusing rules and regulations that you must know to pass the state's exam. We also offer practice exams, which test your content knowledge and refine your test taking skills in preparation for the exam. To attend this seminar on-line, click this link: capsstraining.webex.com Getting the Car Deal Rolling: This seminar concentrates on how to complete the basic car deal paperwork involved in a sales transaction. It includes an introduction to the required sales documents for motor vehicles and power sport sales, and to title transfer documents. This seminar is uniquely formatted for the novice dealer/and or title clerk. - Feb 17, 2012 8:30am - 12:00pm Montrose
- Feb 23, 2012 9:00am - 12:00pm Lakewood
- Apr 10, 2012 9:00am - 12:00pm Lakewood
- Apr 27, 2012 8:30am - 12:00pm Montrose
Title Document Training: This seminar includes basic title documents for incoming and outgoing title transfer, various title forms, applications for title, how and why to do a VIN inspection, title assignments, odometer disclosures, secure and verifiable identification and more. - Feb 8, 2012 9:00am - 1:00pm Lakewood
- Mar 16, 2012 9:00am - 1:00pm Montrose
- Mar 28, 2012 9:00am - 1:00pm Lakewood
- Apr 18, 2012 9:00am - 1:00pm Lakwood
The Well-Informed Dealer - Do You Think You Know It All? Are you complying with the Federal Truth-in-Mileage Act? Do you know what damage disclosure is required to be furnished to your customer? If you did not know the vehicle you sold was previously salvaged, do you have to buy the vehicle back? What charges can be added to an advertised price? This seminar covers numerous items required for compliance of industry's rules and regulations, including OFAC, Red Flags, and FTC Privacy Notices. Dealers taking this class will be prepared for a compliance inspection by the Auto Industry Division. - Feb 17, 2012 1:00pm - 5:00pm Montrose
- Mar 14, 2012 9:00am - 1:00pm Lakewood
- Apr 27, 2012 1:00pm - 5:00pm Montrose
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Titles & Registrations
Form Changes/Updates | | |
No new changes to report. The following are reminders:
DR 2097 - Mastery Exam Affidavit (05/20/11)
This form has been updated, so if you are administering the Mastery Exam to your salespersons, use this updated version.
DR 2395 - Title and/or Registration Application (02/22/11)
Previous versions accepted until 07/01/11
NOTE: The major change to this form requires vehicle owners to declare their intent of Joint Tenancy with Rights of Survivorship or Tenants in Common. The VIN Verification and Colorado Dealer Statement Concerning an Out of State Vehicle have been reassigned a new form number.
DR 2698 - Verification of VIN and Colorado Dealer Statement Concerning an Out of State Vehicle (11/04/10)
This form has been separated from DR 2395. Utilize the new version as of 07/01/11
DR 2842 - Supplemental Secure and Verifiable Identification Information and Attestation Clause (1/21/11)
Previous versions accepted until 5/1/11
For questions, contact the Colorado State Title Section: 303-205-5608 or Colorado State Registration Section: 303-205-5607
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QUESTIONS ?
Do you have questions regarding odometer laws, salvage vehicles, repossessions, or more? Benefits of your membership include phone consultations - so don't hesitate to pick up the phone and ask those questions. Not a member? Call now to join, only $125 a year!
Our newsletters will advise you of form updates by the state, legislative changes, and other items of interest, including compliance tips for your review.
We also offer continuing education to dealers and their employees. We strive to give you the best education at reasonable prices. Classes are offered on the Front Range (Lakewood) and the Western Slope (Montrose) as well as occasional classes in other parts of the state. For more about our seminars, check out the Upcoming Training Seminars section of this newsletter, or check out web site on-line at www.capsscolorado.com.
And give us a call for all your form and supply needs!
If you have ideas on how we can better support you, please contact us!
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Be sure to update your Minimum Wage Poster and check to see if other State and Federal required posters are current.
For more information, click on: |
ABOUT US
CAPSS is a company owned and operated by experienced former investigators of the Colorado Department of Revenue, Auto Industry Division. Connie Hatch retired as a Field Investigator, after 27 years of state service. Mary Marvin retired as a Supervisor Investigator, after 32 years of state service.
For two years, Mary and Connie contracted with CIADA to provide training for their members. Now they have moved on to better serve all dealers and wholesalers in the State of Colorado.
Contact us if we can serve you!
Front Range: Mary Marvin (303) 478-2538
Western Slope: Connie Hatch (970) 209-7499
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