massachusetts auto dealer magazine july 2013

July 2013 • Vol. 26 No. 7

FIRST CLASS MAILUS POSTAGE PAID

BOSTON, MAPERMIT NO. 216

MSADA, One McKinley Square, Sixth Floor, Boston, MA 02109

autoD E A L E R

M A s s A c h u s E t t s

The official publication of the Massachusetts State Automobile Dealers Association, Inc

Moving Forward

Scott

Dube

Ta b l e o f C o n T e n T s

4 From the President: What a Difference a Day Makes

6 the roUndUP: legislature begins Right to Repair Clean-up

9 LegisLative scorecard

10 insUrance: Disarmed alarms Provide no Protection

11 accoUnting: My Job is to steal Your Data

12 aUto oUtLooK

14 Cover Story:

Moving forward with scott Dube

17 LegaL: beware — senate

Resolves filibuster Threat

18 neWs From around the horn

23 troUBLeshootng: Despite

efforts, lien Release and Title Issuance Problems Persist

25 nada UPdate: a franchise system Under attack

www.msada.org Massachusetts auto Dealer JULY 2013

The official publication of the Massachusetts State Automobile Dealers Association, Incs Ta f f D I R e C T o R Y

Robert O’Koniewski, Esq.executive Vice [email protected]

Jean Fabrizio Director of administration

[email protected] Brennan, Esq.

staff [email protected]

Paul Fellowsadministrative assistant/ Membership Coordinator

[email protected]

a U T o D e a l e R M a g a z I n e

Robert O’Koniewski, Esq.executive editor

Tom Nasheditorial Coordinator

[email protected]

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auto Dealer is published by the Massachusetts state automobile Dealers association, Inc. to provide information

about the bay state auto retail industry and news of MsaDa and its membership.

aD DIReCToRYblumshapiro, 21

boston Herald, 32lynnway auto auction, 20

nancy Phillips associates Inc, 21o’Connor & Drew, P.C., 27southern auto auction, 18

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from the President4

JULY 2013 Massachusetts auto Dealer www.msada.org

by Scott Dube, MSADA President

A

What a Difference a Day MakesPlan now to represent your business at Dealer Day

s I continue to serve in my role as president of MSADA, I am constantly reminded just how much information is out there that I need to keep tabs on. It’s been the most daunting part of the job so far, and luckily I continue to have more enthusiasm for representing my fellow dealers as time passes.

Why exactly is there so much to follow? Because the regula-tory and legislative environment our industry faces here in Mas-sachusetts is more challenging than ever. Whether it’s shoring up our 93B franchise law or fighting back against other threats to our franchise system -- such as Tesla’s attempt at a dealer-free business model here -- there is no end to the amount of information to stay on top of.

But here’s the thing: As hard as I work at this alongside Ex-ecutive Vice President Robert O’Koniewski, our new team mem-ber Peter Brennan, and our lobbyists, we can only do so much. At the end of the day, if it comes down to only a handful of folks walking the halls of power, our elected officials and other deci-sion makers are going to lose sight of the fact that we represent more than 400 businesses in this Commonwealth.

In order to avoid looking like part of the furniture of the State House, which many organizations end up being, we need to rely on our strongest asset: you. As a dealer, you represent an impor-tant economic driver in your town. You employ on average 50 men and women at your store. You contribute to not only jobs but also untold hours to community service. In short, you are the folks legislators want to be hearing from.

As a dealer, however, I know the score. You’re busy running your day-to-day operations and the idea of taking time to have to justify your existence may seem like a burden you’d rather

others carry. And that’s why we’re here. But, lest these folks on Beacon Hill forget, we thought it important that there be at least one day where a show of numbers help remind legislators that when they’re debating seemingly remote issues such as “Right to Repair” they’re actually juggling the fates of businesses in their district.

So we have Dealer Day on Beacon Hill, which will take place on Wednesday, October 2. You should have received our save

the date card in the mail. We’re let-ting you know so far in advance so that you’ll be able to hopefully carve out the time for making the trip into Boston and enjoying the camaraderie of your fellow dealers and strengthening your relation-ship with your legislators. We’ll have a prep session beforehand, where we’ll do our best to keep that stream of information concise

and as simple as possible.If you have any questions about the day’s events, please feel

free to contact me or Bob at [email protected].

Tell Us What Services You NeedAs a final note, our Executive Board is taking a look at the ser-

vices we provide and evaluating what is working, what isn’t and what other options we should be thinking about. For example, other dealer associations offer safety and environmental site vis-its, insurance and a workers’ compensation trust, among other services similar to what we provide.

I want to ask you to keep thinking about the services we pro-vide and what you would find useful, and what you would like to see added or changed

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MSADA

“I continue to have more enthusiasm for

representing my fellow dealers as time passes.”

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Name Contact Telephone

ADESA Boston Chris Carli (508) 270-5403ADP Dealer Services Maria Trezza (973) 404-4466Albin, Randall & Bennett Barton D. Haag (207) 772-1981American Fidelity Assurance Co. Tom Trudell (413) 885-5477AutoRaptor (RAL) Howard L. Leavitt (401) 421-6533Bank of America Maryanne Recupero (800) 991-1770 Bank of America Merrill Lynch Lawrence Corrente and Nancy Price (781) 534-8543 Bellavia Blatt Andron & Crossett, PC Leonard A. Bellavia, Esq (516) 873-3000 Blum Shapiro John D. Spatcher (860) 561-4000Boston Globe Mary Kelly (617) 929-8373The Boston Business Advisory Group Paul Cuomo (781) 681-1501 Vincent Saccone (781) 681-1519Burns & Levinson LLP Paul Marshall Harris (617) 345-3854Construction Management & Builders, Inc. Kate Sullivan (781) 246-9400CVR Scott Herbers (800) 668-2332DealerDOCX Merchon Brower (585) 451-3322 DealerTrack Ernest Lattimer (516) 547-2242Downey & Company James Downey (781) 849-3100EasyCare New England Inc. Mike Douglas (770) 246-9724Ethos Group, Inc. Drew Spring (617) 694-9761F & I Resources Jason Bayko (508) 624-4344Federated Insurance Chris Welch (724) 766-6666First Citizens Federal Credit Union Joe Ender (508) 979-4728 Fisher & Phillips LLP John Donovan (404) 240-4236 Joe Ambash (617) 532-9320Grant Thornton LLP Alan Oslomowski (508) 926-2200Huntington National Bank John J. Marchand (781) 326-0823Key Bank James Q. Moretti (781) 558-5132Leader Auto Resources, Inc. John Ackermann (518) 857-8853Lynnway Auto Auction Jim Lamb (781) 596-8500M & T Bank John Federici (508) 699-3576MetroMedia Energy Timothy Teevens (800) 828-9427Micorp LLC Ryan Kim (508) 832-9816Mid-State Insurance Agency James Pietro (508) 791-5566Mintz Levin Kurt Steinkrauss (617) 542-6000Murtha Cullina Thomas Vangel (617) 457-4000Nancy Phillips Associates, Inc. Nancy Phillips (603) 658-0004O’Connor & Drew, P.C. Kevin Carnes (617) 471-1120Performance Management Group, Inc. Mark Puccio (508) 393-1400Ray-Jurgen Richard Thibadeau (860) 585-0111R.L. Tennant Insurance Agency, Inc. Walter F. Tennant (617) 969-1300Resource Management Group J. Gregory Hoffman (800) 761-4546Reynolds & Reynolds Marc Appel (413) 537-1336Robinson Donovan Madden & Barry, P.C. James F. Martin, Esq. (413) 732-2301Samet & Company John J. Czyzewski (617) 731-1222Schlossberg, LLC Michael O’Neil, Esq. (781) 848-5028Sentry Insurance Company Eric Stiles (715) 346-7096Shepherd & Goldstein Ron Masiello (508) 757-3311Silverman Advisors, PC Scott Silverman (781) 591-2886Southern Auto Auction Tom Munson (860) 292-7500Sovereign Bank Richard Anderson (401) 432-0749Target Dealer Services Andrew Boli (508) 564-5050TD Auto Finance BethAnn Durepo (603) 490-9615TD Bank Michael M. Lefebvre (413) 748-8272Wells Fargo Dealer Services Christopher Peck (508-314-1283) Wicked Local Media Massachusetts Jay Pelland (617) 757-5571 Zurich American Insurance Company Steven Megee (800) 443-4513

AssociAte MeMber Directory

Msada Board Barnstable County

gary beard, Dick beard Chevrolet

Berkshire Countybrian bedard, bedard brothers auto sales

Bristol CountyRichard Mastria, Mastria auto group

Essex CountyWilliam Deluca, Woodworth Motors

John Hartman, Ira Motor group

Franklin CountyJay Dillon, Dillon Chevrolet

Hampden CountyJack sarat, Jr., sarat ford

Hampshire Countybryan burke, burke gMC

Middlesex CountyChris Connolly Jr., Herb Connolly Motors

scott Dube, bill Dube Hyundai

Norfolk CountyJack Madden, Jr., Jack Madden ford

Charles Tufankjian, Toyota scion of braintree

Plymouth CountyChristine alicandro, Marty’s buick gMC Isuzu

Suffolk CountyRobert boch, expressway Toyota

Worcester County steven sewell, Westboro Mitsubishi

steve salvadore, salvadore auto

Medium/Heavy-Duty Truck Dealer Director-at-Large

[open]

Immediate Past PresidentJames g. boyle, Tuck’s Trucks

NADA DirectorDon sudbay Jr., sudbay Motors

OFFICERSPresident, scott DubeVice President, Chris Connolly, Jr.Treasurer, Jack Madden, Jr.Clerk, Charles Tufankjian

MSADA

When it rains it pours. As you may recall, 2012 unfortunately saw the passage of two, diametri-cally opposite, “right to repair” laws that is now vexing the affected parties. This at a time after we successfully fought back for over six years all at-tempts to get any law on the books.

One law, a compromise deal passed by the Leg-islature on its last day of formal sessions on July 31 and signed into law by the governor a week later, had the support of all the stakeholders on the issue – independent repairers, consumers, auto manufacturers, and franchised dealers (as rep-resented by your Association). It was a difficult process getting all the parties together, especially the recalcitrant manufacturers who waited to the last possible moment to come to the table and ac-cept a deal. But it was a workable, acceptable deal nonetheless, created through the legislative pro-cess where anyone who wanted had a seat at the table and a voice in the discourse.

It was that manufacturers’ delay, however, that pushed legislative passage past the time when the initiative petition could have been pulled from the November ballot. As a result, the voting public took their opportunity to approve by an 85%-15% margin the “right to repair” law the RTR Coali-tion initially put on the ballot, drafted notoriously anti-manufacturer and anti-dealer, as a tool to get the parties to the negotiation table. Their intent worked, but the manufacturers’ inability to read and understand the political tea leaves (even their hubris, if you will, in thinking they could defeat it at the ballot) created a problem we are struggling to resolve eight months later (and counting).

To its credit, the Legislature has taken the first

step in attempting to fix the problem of two com-peting laws existing on the books simultaneously.

On July 23, the Joint Committee on Consum-er Protection and Professional Licensure held a public hearing on two bills, although drafted dif-ferently, that would attempt to re-enact the leg-islative deal from July 2012. MSADA President Scott Dube and I testified at the hearing on behalf of your Association.

House 184, filed by Rep. Garrett Bradley (D-Hingham), would seek to replace the two compet-ing laws with the very language the Legislature approved in July. Bradley, a long-time RTR pro-ponent and current member of House leadership, was party to last year’s structuring of the deal, and his bill has the full support of the RTR Coalition, vehicle manufacturers, and the franchised dealers.

House 254, filed by Rep. Paul McMurtry (D-Dedham), alters certain language in the deal bill to address a “want” pushed by AAA. The stick-ing point – telematics. AAA seeks language that would allow their affiliated repairers to have ac-cess to any and all signaling that flows through a vehicle’s telematics system (such as OnStar) to the subscribing vehicle owner, the vehicle manu-facturer, and the selling franchised dealer. The OEMs and we dealers, naturally, are strongly op-posed to that as evidenced by the language we successfully got approved in the deal bill last year that limits the law’s treatment of telematics only to the flow of diagnostic and repair information. Everything else related to telematics systems is off limits. As your Association made clear in pub-lic testimony last year, what AAA is seeking is to break the proprietary relationship between the

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the roundup

by Robert O’Koniewski, Esq. MSADA Executive Vice President

Legislature Begins Right to Repair Clean-up

7


MSADA

parties to have access to information that they are not entitled to through the sub-scription agreement and existing contrac-tual law.

As we stated at the July 23 public hear-ing, AAA’s efforts are merely a diversion to the task at hand – getting the Legisla-ture to re-enact that which they have al-ready approved last July.

The Committee is chaired by Sen. Tom Kennedy (D-Brockton), who was instru-mental in putting last year’s compromise together and getting it through the Leg-islature, and Rep. John Scibak (D-South Hadley), who is new to the Committee but in his sixth term as a House member.

Prior to the hearing we asked our mem-ber dealers in the districts of the Commit-tee members to contact their legislators to express support for House 184. As we work this bill through the process, we will continually reach out to our dealer grass roots asking you to contact your legisla-tors to build support and momentum for fixing this conflict of the deal versus the ballot question.

Our member dealers need to keep in mind that the key penalty provision in the ballot question, which is law today, would deny dealers the ability to sell vehicles, beginning in January 2014, if their manu-facturers cannot, or choose not to, comply with the law. That is an intolerable situa-tion legislators are well aware of and will prove an essential impetus for achieving the fix.

Budget SagaWhen we last left you, the July 1 start

of FY2014 was going to arrive without a final state budget in place. The sticking point – Governor Patrick thinks the Leg-islature did not raise taxes high enough. As a result, he vetoed the Legislature’s revenue plan that hiked the gas and to-bacco taxes and created a new tax on In-ternet and computer services in an effort to create over $500 million in new funds

dedicated to transportation projects. As we go to press this month, both the

House and Senate have overridden the governor’s veto, thereby enshrining into law a permanent hike in the gas tax, never requiring any future additional legislative votes – the initial three cent gas tax hike, which takes effect the last week of July, will be pegged henceforth to inflation.

One other troubling aspect of the trans-portation tax situation – all sales tax rev-enues derived from vehicle sales will be dedicated to the Transportation Fund. As we’ve seen many times before, once there are shortfalls in these types of funds the Legislature immediately looks to extend its grasp further into their source. As a re-sult, we will need to be even more diligent to be sure that the trade-in allowance is not threatened as legislators eye a poten-tial $150 million pool in (currently) lost monies.

U.S. Dept. of Labor Audits, Again

As we were going to press I heard from several dealers who have been visited by U.S. Department of Labor (DOL) inves-tigators to conduct payroll audits at their new car dealerships. This appears to be a continuation of the audits DOL conducted in the Boston area last year. The audits are part of a federal “initiative” to check wage-hour compliance at dealerships.

The investigators implied that the au-dits were part of an internal “initiative” to check wage-hour compliance at deal-erships. Therefore, it is likely that more dealerships will be faced with these in-vestigations in the months ahead.

In addition to other wage-hour compli-ance issues, this round of audits seems to be focused primarily on dealers’ use of and compensation to independent con-tractors, such as vendors providing vehi-cle cleaning and reconditioning services.

The investigators have visited the dealer-ships on one or more occasions, reviewed

payroll records for the past two years, and interviewed employees concerning their pay plans and the dealership’s payroll practices. Again, these investigators are only concerned with the dealership’s com-pliance with the federal law, not the Mas-sachusetts law, which in most – but not all – cases is more stringent.

We recommend that each dealership make a quick audit of its payroll to check its compliance. If you are not in compli-ance, you may want to consider making the necessary changes. If you receive a notification of an investigation, we rec-ommend that you immediately contact an employment attorney familiar with the federal wage-hour law who can help you measure your compliance and advise you how to respond in a way that will mini-mize your liability.

Mass. Unemployment Rate Continues to Rise

You may have missed the news, but on July 17 the state’s Executive Office of Labor and Workforce Development an-nounced that the state’s unemployment rate rose to 7.0%. The rate has now risen from 6.0% in May 2012 as the governor keeps touting how well the state’s econ-omy is doing, with hiring showing tepid job growth of a couple thousand a month offset by losses in other months.

This is consistent with the New England economic condition reported recently by the Federal Reserve – “moderate growth but generally stagnant hiring.” Stats showing slim job growth attributable in part to people holding multiple part-time jobs provide further evidence of a lack of vitality in the labor market. Also, Associ-ated Industry of Massachusetts’ Business Confidence Survey of employers shows “lower expectations for new hiring based on prevailing economic uncertainties and concerns about the robustness of growth through the rest of 2013.”

continued on next page

the roundup

from previous page

Obamacare Delay & the House Democrats’ Caucus

In our Bulletin #34 we reported how the Obama Administration announced it was delaying for one year the enforce-ment of the employer shared responsibil-ity (aka “pay-or-play”) rules and report-ing requirements. On July 9, the Internal Revenue Service made the delay official by issuing Guidance Notice 2013-45 de-tailing employers’ transitional relief for 2014. We advised our dealers to consult with their legal and/or accounting advi-sors when formulating compliance with government rules and regulations, even when enforcement is arbitrarily delayed. These rules have been delayed, not re-pealed, and they continue to represent a formidable compliance challenge.

In an effort to put some permanency to the administration’s self-dictated delay, especially since the administration has no legal authority to implement unilaterally such a delay, the U.S. House held two roll calls, one to suspend the employer mandate and one to suspend the individ-ual mandate. The suspension of the em-ployer mandate vote was approved 264-161, with 35 House Democrats voting in favor. The individual mandate delay was approved 251-174, with 22 Democrats joining the majority.

It should be noted not one of the eight members of the Massachusetts House delegation, all Democrats, joined in the majority in either vote.

Dealer Day on Beacon Hill – October 2

Our annual “Dealer Day on Beacon Hill” will be held on Wednesday, Octo-ber 2, in Boston.

We are asking our member dealers and their key employees to convene at the Parker House Hotel in Boston beginning at 10:00 a.m. in preparation of walking up to the State House to meet with their

representatives and senators to discuss those issues in the automotive industry that dealers are presently confronting. We will have an issues briefing and a keynote address to get dealers in a proper frame of mind to provide legislators a dealer’s perspective on your economic footprint locally and throughout the state in the aggregate. For those dealers we know who will be attending, we will schedule your legislative appointments for you.

It is extremely helpful to our lobbying efforts for legislators to see their constit-uents face to face and receive a perspec-tive they don’t have in the normal course of their activities. No one knows your business better than you. That knowl-edge needs to be conveyed to your leg-islators in an environment and manner they understand, hence our Dealer Day on Beacon Hill. Please circle the date and plan on visiting Boston on October 2.

TIME Dealer of the Year 2014

It is that time of the year again. The highest honor bestowed on a dealer each year at the NADA convention is the TIME Magazine Dealer of the Year Award (TDYA). The process begins with nominations from each state. At MSADA we consider the state nominee so impor-tant that he or she is also designated as the “Massachusetts Dealer of the Year”.

Please help by nominating candidates for selection as the Massachusetts TDYA. Here are the qualities that the judges at the national level are looking for:• Community service. This can be civic, political, educational, or philanthropic. The more personally involved the dealer is, the better.• Industry leadership. This can be state or national association leadership, or in-volvement in dealer councils.• Quality businessperson. This means success as a dealer measured by awards, commitment to customer service, and

profitability. But success is measured rel-ative to dealership size by using bench-marks. Both large and small dealerships have been finalists or won the national TDYA.

Dealers may nominate him/herself or another dealer. Since your Association’s leadership does the selection at the state level, the members of the MSADA Exec-utive Committee are not eligible; neither are the TDYA Recipients for the last four years nor current NADA directors. The last four TDYA honorees were: Ray Cic-colo, Ann Regan, Bill DeLuca III, and Rick Mastria Jr.

Please give this your careful consid-eration and e-mail me at [email protected] with your nomination. Nomi-nations must be received at our office by Friday, August 9. Thank you for your as-sistance on this matter.

Our PACs - DEAC & NCDPAC

Each year MSADA expresses itself politically through NADA’s federal PAC, Dealers Election Action Commit-tee (DEAC), and through our state PAC, the New Car Dealers Political Action Committee (NCDPAC). We depend on contributions from our dealers to keep these PACs strong, as we need to have an active voice in Washington and on Bea-con Hill.

Every dealer should be contributing to both PACs every year. It is an inex-pensive insurance policy. Defeating the original right to repair bill, which would have severely hurt your parts sales, and fighting for the dealer exemption to the federal Wall Street reform law are two great examples why we need to be strong politically.

If you have not yet given to the PACs this year, please contact me at [email protected] and we can make sure your contributions happen. Thank you.

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www.msada.org Massachusetts auto Dealer JUne 2013

9MSADA

Frequently Cited OSHA Standards


10 MSADAinsurance

It’s happening everywhere, from California to Georgia. In several recent theft cases, sophisticated thieves have disabled burglar alarms to prevent them from sounding a warning and alerting the local police department. In one case, the telephone line was cut at the junction box. In another instance, the phone line serving the alarm system was severed at the top of a telephone pole.

With no burglar alarm system protect-ing the building, the thieves broke in and took all the time that they needed without fear of being caught. In still another case, an entire truckload of product was stolen when thieves simply hooked up a truck to a fully loaded trailer that was parked at the business dock and drove off.

Make no mistake, these thieves are pro-fessionals. The heists were well planned and executed. Results in all three cases were similar — tens of thousands of dol-lars of stock, inventory, office equipment and vehicles — all stolen. These compa-nies were left with empty warehouses, and no product to sell to their customers. Protecting your property, equipment, in-ventory and facilities against thieves re-quires you to be proactive with regard to security.

Burglar alarm basicsIt is important to understand how the

typical burglar alarm system works, its strengths and its weaknesses. Burglar alarm systems may be activated by a wide range of detection devices includ-ing motion sensors, door/window con-tacts, glass breakage detectors, etc. There

are two general types of alarm systems. The first one sounds only a local alarm (on the property). The second system, a monitored system, sends an alarm to a central station monitoring service. The drawbacks of the local system are obvi-ous. It is possible that nobody will hear it or that it will be ignored or disabled.

The monitored system is more com-monly used in commercial properties and provides a higher level of protection. The detection units send an alarm to a central station monitoring service. The central station contacts the local police department to respond to the intruders. The primary weakness in this case is

the method by which the system sends the alarm to the monitoring service – via telephone line. As noted above, in most cases, if the phone line is cut, the monitoring service either doesn’t know the alarm system is inoperable or it as-sumes a power outage or other technical problem is at fault. Either way, there is no police response.

Detection devices are critical elements of burglar alarm “basics.” If your pres-ent burglar alarm system consists only of door and window contacts, it may not provide adequate protection. Thieves avoid these sensors and enter buildings without being detected by breaking holes in concrete block walls. Once inside they can “shop” at a leisurely pace and take what they want. A good system includes interior motion sensors in addition to door and/or glass breakage sensors. In-frared or photoelectric beams along docks or overhead doors are also a good investment.

Backup communication equipment is the answer

There are several options or features that can be added to an existing “central station” alarm system that will improve reliability and help ensure a prompt po-lice response. The key is to make sure that your alarm system has an uninter-ruptible path to the central station or an alarm is sent if the phone line is disabled.

Adding these features makes the exist-ing burglar alarm system more depend-able, and therefore provides better secu-rity for your facility:

1. A cellular telephone backup system is the best and most reliable equipment available. The telephone line is backed up by a cellular system that contacts the central station to report alarm activations.

2. The second choice is a radio backup system. It is less expensive but also less reliable. A radio is used to report alarms to the central station if the telephone line fails.

3. A “line cut monitoring” feature can also be added to most burglar alarm sys-tems. This alerts the central station that the phone line is not functioning proper-ly. There may be more false alarms with this service due to the many other prob-lems that can affect the telephone line.

4. Install a battery backup on the alarm system itself if you don’t already have one. This will ensure that the detection system will continue functioning if elec-trical service to the building is lost.

If you have anything of value that thieves want or can sell on the open mar-ket, you are at risk. General observation and former employees can provide all the information a thief needs to identify your weaknesses and put a plan into mo-tion. Your goal is to make yourself as un-attractive as possible and force them to consider other “targets.”

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Disarmed Alarms Provide No Protection

By Steven MegeeSt e v e n Me g e e i S r e g i o n a l S a l e S M a n a g e r a t t h e Fr a M i n g h a M re g i o n a l oFF i c e F o r Zu r i c h no r t h aM e r i c a co M M e r c i a l’S Pr o g r a M S & Di r e c t Ma r k e t S’ b u S i n e S S u n i t.He cAn be reAcHeD At [email protected].

Detection devices are essential

iF you have anything oF value that thieveS want or can Sell on the oPen Market, you are at riSk.

And we are pretty good at it. But not because we are some highly skilled black hat hackers with secret knowledge of the digital underworld and advanced skills you only see in the movies. And we don’t trade in digital cur-rency needed to buy zero day exploits that make the largest software vendors cringe. We are good at it because we exploit the simple, yet poor level of, security hygiene at the companies we are paid to test.

Our job is to steal your data, or at least to try and see if we are detected. Our cli-ents hire us to find weakness in their net-works and computer systems to try to get to that most sensitive data. The informa-tion could be the financials, the customer lists, or employee personal data. What-ever the secret sauce, the crown jewels, or that most important data, our job is to find it. And, we normally come up with the goods.

So, why are we so successful? Many businesses have a lack of general infor-mation technology security awareness. Cybercrime is skyrocketing, but IT secu-rity budgets are not keeping up, and some are even non-existent. They follow the mantra, “If it’s not broken, don’t fix it.” Your staff is able to get to the programs they need, so everything must be work-ing correctly right? But, what you don’t know can hurt you. Our team finds com-puters with passwords written down on sticky notes affixed to the monitors and under keyboards, or in Word documents saved on the hardrive of the computer

or network. We find doors to sensitive rooms left unlocked or propped open. We find wireless networks using outdated security or even no security at all. We even employ social engineering tech-niques to trick people into letting us in the building. Sometimes, it’s as simple as dressing nicely, and saying “please” and “thank you.” Once we get a foothold into your network, we move around, usually undetected, quite easily.

Below are our top five security risk areas that we encounter when perform-ing our vulnerability assessments of cli-

ent networks (with ways to fix it your-selves!):

1. Outdated wireless security - With wireless access, our team sits in the park-ing lot, often a block away, and runs through your network looking to steal your data. Solution: Upgrade the wireless networks to the latest encryption and en-sure guest wireless networks are not inad-vertently connecting to the office network.

2. Lack of a computer inventory - Dur-ing our scans, we’ve found unused file servers with sensitive data; we located email servers which could be used to send data to employees and customers posing as key figures; we found wireless access points that not even the IT team knew about. Solution: Keeping an in-ventory of what should and should not be on your network is key to the next steps of removing these rogue devices.

3. Change default passwords - Vol-umes and volumes of Internet websites exist with the default user ID and pass-words for computers, networking de-vices, and printers. Last time I checked, there were over 124 million results on Google just for the keywords “default

password list”. Solution: Changing the default passwords should be a critical step before any device is added to the network.

4. Patching - The list of known vulner-abilities grows every day. Keeping up-to-date is daunting, but it must be done. One way that we move around your net-work so easily is finding just one machine with a critical missing patch. Right now, JAVA and Adobe are the penetration tes-ter’s vulnerability of choice. Exposing these allows us to pivot around your net-work easily. Solution: Run Microsoft

Windows Update as often as your business allows, and also update the other vendor soft-ware. Microsoft’s Windows Update will not update your JAVA and Adobe software. You will need a third party patch

management tool to cover more than just operating system patches.

5. Remain vigilant! - Keeping your data secure is not a set once and you’re done exercise. Solution: You should be proactive in identifying and fixing the vul-nerabilities as quickly as your business process allows.

The hackers with mal intent are not just targeting large business. Companies with large IT shops may appear to have more valuable data, but it is easier to get away with robbing a convenience store than robbing a bank. Don’t be the low hang-ing fruit thieves love to target, and stop making my job so easy!

For more information about O’Connor & Drew’s IT Security Audit Services, contact Michael Hammond, CISA, CRISC, CISSP, at 617-471-1120.

tAbout o’Connor & Drew, P.C.

O’Connor & Drew, founded in 1949, is one of the most well-respected, full service accounting, tax and business consulting firms in New England with a specialty in servicing automobile dealer-ships. O’Connor & Drew thrives on fostering close business and individual client relationships and pro-vides service that counts. www.ocd.com.

Accounting 11MSADA


My Job Is To Steal Your DataBy Mike Hammond

“Many businesses have a lack of general information technology

security awareness.”

Mike haMMonD iS Direc-tor oF it auDit ServiceS at o’connor & Drew, P.c. he can be reacheD at [email protected]

12


AUtO OUtLOOK


13MSADA

MSADAMSADAMSADACOveR StORy MsAdA14


By Tom Nash

MSADA President Scott Dube is leading the Association through a new era of the auto industry, when new threats are con-

stantly on the horizon.When the effects of economic cri-

sis set in five years ago, the owner of Bill Dube Hyundai was an MSADA county director. At the time he said dealers should take the opportunity to adjust their

business model and take a more ac-tive role in planning the future. Now, as dealerships face mounting legislative hurdles, Dube is able to use his plat-form as president to encourage dealers to take an active role in politics and make sure their voices are heard by elected officials.

“The challenge for dealers is that there will always be people making it more difficult for us to do business,” Dube said. “We’ve learned over the past few years the more dealers who can get involved, the better off we are.”

As his first year as president wraps up, Dube spoke to the MSA-DA about what challenges he faces, industry obstacles and his predic-tions and advice for Massachusetts dealers.

Back in BusinessAfter two decades of a career in aviation and a year

spent at sea with his family, Dube has been on dry land in the auto industry for just under 10 years.

Dealerships are certainly not unfamiliar territory. His father, Bill Dube, has sold cars since the 1970s, and Scott grew up helping out at Bill’s dealerships. The elder Dube built a successful career selling early adopters on Toyota, including to his fair share of suspicious World War II vets.

It was the entrepreneurial itch passed down by his father that led Scott to take on a Wilmington Hyundai franchise in 2004, and he hasn’t looked back.

Now the dealer principal at Bill Dube Hyundai, Scott Dube served as MSADA vice president before taking on

Moving ForwardWhether it’s a plane, boat or MSADA, Scott Dube is comfortable at the helm

15MSADACOveR StORy MsAdA


his new role. He said the new title grants him privileges he hadn’t experi-

enced before.“I had the chance to speak

with the registrar, whereas before I became president she probably didn’t know who I was. It’s gratifying to have that one-on-one contact in order to get our point of view out there. Going to the attorney general’s office, you get to spend

time talking about dealer issues you wouldn’t normally get,” Dube said.

He said fellow dealers are also more interested in connecting.

“Everyone has something to tell you about,” Dube said. “I’ve gotten a lot of great feedback and had a lot of interesting conversations. The

challenge is balancing that time so that you can say hello to ev-

erybody.”Dube says time manage-

ment has proven to be the greatest challenge he faces in his new role. Jug-gling a full time job, ab-sorbing the sheer amount

of information needed to perform as president, and

tackling issues on both Beacon Hill and Capitol Hill is daunting, he says. “It’s not a 9-5 arrangement for anyone involved.”

Facing the Future

Back in 2008, Dube responded to the economic downturn with creative methods to cut costs. He switched to waste motor oil and recycled vegetable oil to heat his dealership. He used white rocks and pebbles – which require no water-ing – for landscaping. All this was a part of his theory that dealers need to be “a bit more nimble” to keep their heads above water in a finan-cial crisis.

continued on next page

20


16 LegalScott Dube—Moving Forward MsAdA

from previous pageToday, as dealerships face an onslaught of legislative

threats, Dube wants dealers to be nimble in other ways: by putting on their lobbyist hats. Officials have good reason to listen, Dube said.

“The people on Beacon Hill and Capitol Hill recognize that business people are their constituency and without us there are no jobs. As much as they like to regulate us and get into our business, they recognize that without small business there’s no Main Street, there’s no jobs. We’re a large part of the economy – 20 percent of retail sales in Massachusetts – and they often are interested in what we have to say.”

While five years ago the economy was at the forefront of everyone’s concerns, Dube says it’s legislative issues that will influence the future of the industry. He agrees with George Magliano, a senior principal economist at IHS Auto-motive who spoke at the MSADA Annual Meeting this year. Magliano said continued economic recovery is possible – if financial policy cooperates.

“There’s a backdrop of continued and increasing hostility toward the business sector,” Dube warned.

He said the Affordable Care Act is going to become a front and center issue over the next few years.

“We’re going to start to see the effects of the Affordable Care Act in terms of our cost. CFPB will most likely expand and we’ve got some real issues with them. The debt that we have as a nation has to be paid somehow, so I would expect it will be through additional taxation pressures. We’ve got some challenges despite increased sales.”

Reaping RewardsAs his first year as president comes to an end, Dube says

the role has given him the ability to have an overall positive impact on his industry’s franchises and businesses. He said it’s gratifying to help protect longstanding traditions.

“Maintaining what we’ve had as the landscape changes is a rewarding part of this job -- being able to protect the business my family grew up in and other people’s families grew up in.”

Long term, Dube says his goal is to do what’s best for the Association. “At this point, we’ve got to just keep working it and doing the best we can.”

t

MSADA


17LegalMSADA

Sometimes the political process in Washington creates strange results. This is the story of how a fight over the filibus-ter process in the Senate led to an agree-ment to make appointments to the Nation-al Labor Relations Board (NLRB)— the federal agency which enforces the laws regarding unionizing. The result of this political deal will have a major impact on employers, since the NLRB will soon be in a position to make your life worse — legitimately.

The NLRB has had a rocky history during the past several years. As we have noted in these pages before, the Demo-crat-dominated Board has embarked on a deliberate campaign to encourage union-izing and to impose new protections for non-unionized employees

But the NLRB has had a major prob-lem: Its legitimacy has been in question for years, because the Senate has not been able to agree on confirmation of a slate of candidates to fill the agency. As a result, the NLRB, which by law is supposed to have five members, has limped along at times with only two members, or the Pres-ident has made “recess” appointments to fill slots that the Senate has refused to confirm. A “recess” appointment is an ap-pointment by the President to an agency when the Senate is not in session. It is a device that has been used for decades by Presidents to fill positions when the Sen-ate refuses or is unavailable to act.

Several years ago, the agency issued over 600 decisions when it had only two members. Employers took it to court, claiming that the agency was required to have three sitting members in order to lawfully issue decisions. The Supreme Court finally ruled that the agency was required to have at least three members. That problem was temporarily resolved after President Obama made additional

recess appointments to the agency, and those new appointees rubber-stamped the earlier decisions.

But the problem started all over again a couple of years later, when the Senate still could not agree on confirmation of nomi-nees to the agency. President Obama again made recess appointments to the agency, and they continued to issue a barrage of pro-union decisions. Other employers took the NLRB to court again, and this year two U.S. Federal Courts of Appeal ruled that the recess appointments were unconsti-tutional. Hundreds more decisions were called into question, as well as the ability of the NLRB to function at all.

In June, the Supreme Court agreed to decide whether the recess appointment process is constitutional.

But the recess appointment controversy affected more agencies than the NLRB. In particular, the President had been unable to get the Senate to confirm the nomination of the head of the new Consumer Financial Protection Bureau, as well as his nominee for Secretary of Labor, among others. The standoff on these appointments was far more high profile that the fight over the NLRB, which could have languished for at least another year while everyone wait-ed for the Supreme Court to decide if the agency was functioning lawfully.

Because these other appointments became so high profile, the Democrat-controlled Senate threatened to use the “nuclear option” of voting to change the filibuster rules, which require a two-thirds vote to cut off a filibuster. If the Senate changed the rules to only require a majori-ty vote to end a filibuster, the consequenc-es for all legislation would be enormous.

Hence, the Senate agreed to a compro-mise: The two-thirds filibuster rule would remain intact, and the Republicans agreed to confirm the appointments of the head

of the Consumer Financial Protection Bu-reau, the Secretary of Labor, and four new appointments to the NLRB (two Demo-crats in addition to the lawfully-sitting Democratic chair, and two Republicans).

By the end of the summer, there will be a fully-functioning five-member NLRB. With doubts about its legitimacy out of the way, the Democratic-controlled ma-jority will likely continue the spate of employer-hostile decisions on key issues. Here are just a few of the developments you can expect:• More pro-employee rulings about the

use of social media such as Facebook for “concerted activity” by non union employees;

• Pushing for faster timing of union elec-tions, thereby giving employers less chance to campaign;

• Pushing for workplace notices to em-ployees of their right to unionize;

• Granting employees access to your email system for union organizing;

• Outlawing rules in employee handbooks which the Board says “chill” concerted activity.Bottom line: We can’t emphasize too

strongly that employers must train man-agers now about concerted activity and union organizing, and review handbooks and social media policies. Now that the political battle over the NLRB is over, vigilance must be the watchword.

t

Joe AmbAsh is mAnAging pArtner of the boston office of fisher & phil-lips, A nAtionAl lAw firm representing mAnAge-ment in lAbor And em-ployment lAw. he cAn be reAched At [email protected].

Beware — Senate Resolves Filibuster ThreatEmployers to Get a Real NLRB

By Joseph W. Ambash


from Around the HornNEWS

NORTHAMPTON

Burke GMC Buys Classic Chevrolet Franchise

Burke GMC has purchased the Chevrolet franchise from Clas-sic Chevrolet in Amherst and will move Chevy to Burke’s loca-tion on North King Street in Northampton.

Todd M. Volk, the president at Central Chevrolet in West Spring-field and Classic’s former owner, told The Republican the future of Classic’s garage in Amherst is uncertain. He said he’s working to help find jobs for the almost 20 Classic Chevrolet employees.

Burke GMC owner Bryan Burke said he’s surrendering his GMC Truck franchise back to General Motors. He said he’s also evaluating how many new employees he’ll need with the added Chevrolet business.

Burke used to have Pontiac and Cadillac in Northampton. But When General Motors went through bankruptcy in 2009, the au-tomaker dropped Pontiac entirely and pulled all three Cadillac dealerships from the Pioneer Valley.

Chevrolet also gives Burke the ability to sell Chevrolet Volt electric cars and the Corvette.

Volk said GM was putting pressure on him to build a new build-ing for Classic.

Burke said he plans to reach out to Classic Chevrolet customers with advertising and offering shuttle to and from his service depart-ment. He’s also planning to bring in more car parts to his inventory.

LYNNFIELD

new Cadillac, Lexus dealerships added to the Herb Chambers auto empire

The Herb Chambers Companies. added two new luxury dealer-ships in Norwell and Lynnfield in June.

Herb Chambers Cadillac of Lynnfield on Route 1 North fea-tures a drive-in service reception area with valet parking, lounges and snack bars.

The company also opened a Lexus of Norwell dealership in a temporary space on Route 228. The dealership will be relocated to Derby Street in Hingham sometime within the next two years and plans include “state-of-the-art lounges and the modern designs throughout to pamper all customers,” the company said.

Chambers purchased his first car dealership in 1985 and his company grown to become the largest car dealer in New England with 52 dealerships throughout Massachusetts and Rhode Island.

18


19MSADA

BRAINTREE

Braintree Board oKs Grading Work on Quirk-owned Property

This month the Braintree planning board granted a grading per-mit to Daniel J. Quirk for a 10-acre parcel, which is on the east side of Quincy Avenue at the intersection of Hill Avenue. It is next to Quirk’s Fore River shipyard property and across the street from the Quirk Chevrolet dealership.

Quirk’s attorney said his client has no immediate plans to build

anything there. Any proposed development on the site “has to come back to the planning board for site plan approval,” he said according to the Patriot Ledger.

The plan calls for nearly 28,000 cubic yards of fill to be re-moved from the site.

Melissa Santucci Rozzi, the town’s principal planner, said the work is subject to a series of conditions set by the board. A quali-fied professional will be on the scene to check for potential en-vironmental problems, and fire department approval is needed before any blasting can take place, Rozzi said.

Under the terms of the permit, the work is to be completed by September of 2014.

After a brief battle with cancer Gary Reynolds Sr. died peacefully at home, surrounded by family. Reynolds is sur-vived by his wife of 45 years, Marilynn C. Reynolds, three children, Leland Thomas Reynolds and wife Shaleigh Reynolds, twins, G. Hayden Reynolds and wife Emily Reynolds, and Kathryn R. Wayland and husband Mark Wayland and a sister, Car-leen Gerber, whom all reside in Lyme. He is son of the late Laura and Leland Reynolds of Lyme, Connecticut.

Reynolds dedicated the majority of his time and talent to the community of Lyme and his family. He at-tended Peddie School after his parents could not keep him away from the family busi-ness. After completing a business degree from Babson Col-lege, Reynolds followed his passions and secured a job at The Ford Motor Company in Michigan. After two years he became ill and recognized the corporate culture was not for him and returned to Lyme. During his short hospital stay at Yale New Haven Hospital, Marilynn Collins, head nurse, caught his eye. Nine months later, on August 19th, 1967 they married. He and Marilynn settled in the home they built together and proudly raised three children in Lyme together.

Reynolds began his civic contributions in 1977 on the Board of Finance for the Town of Lyme. With his strong leadership skills his contributions to the town of Lyme and the automotive industry continued strong until his death. His

accomplishments include: President and Owner of Reyn-olds’ Garage & Marine Inc., member of the Peugeot Ad-visory Board, Former past Chief and Committee Chair for

the Lyme Fire Compa-ny, Chairman of the Lyme Board of Fi-nance (37 years of ser-vice), Treasurer for the Lyme Congregational Church, member of the Hamburg Cove Yacht Club, Justice of the Peace, board member of The Essex Savings Bank, Connecticut Auto Retailers Asso-ciation board member, NADA Director for Connecticut, Chair-

man of the Regulatory Affairs Committee and Executive Board Member for NADA, and Harbormaster for the town of Lyme.

His passions included boating, traveling, NASCAR, tin-kering on the Seagraves Fire Truck, and cherished being affectionately called “Pop-Pop” by his seven grandchildren Charlotte, Lillian, Izzadora, Julia, and Kaleigh Reynolds and Ted and Laura Lee Wayland. He enjoyed being an ad-vocate for all auto dealers throughout the country and was passionate about all of the wonderful relationships he devel-oped along the way.

Donations in Reynold’s honor can be directed to The Lyme Ambulance, PO Box 911, Hadlyme CT 06439 or The Lyme Fire Company, 213 Hamburg Road, Lyme CT 06371.

IN MEMORIAM

Gary reynolds sr., Connecticut nada director

from Around the Horn20 NEWS


HAVERHILL

2014 Mercedes-Benz e-Class Coupe and Cabriolet roll out to dealerships

Typically, a vehicle’s mid-cycle refresh will involve relatively minor upgrades, but in an effort to gain an edge in the competi-tive midsize luxury-car segment, Mercedes-Benz has seemingly spared no expense with its revamped 2014 Mercedes-Benz E-Class. Following the arrival of the 2014 Mercedes-Benz E-Class Sedan and Wagon in May, the new Coupe and Cabriolet models are currently rolling out to dealerships with more aggressive styl-ing, refined interiors and innovative new technology.

Donning a heavily revised front fascia, the 2014 Mercedes-Benz E-Class Coupe and Cabriolet both receive a single-rib grille that is flanked by new single-unit headlamps with LED technol-ogy in the main beams and daytime running lights. Underneath, larger air intakes give the models a bolder look that is echoed in the rear by newly sculpted fenders and sleeker wraparound LED taillights.

“The 2014 E-Class Coupe and Cabriolet both have a distinctly athletic appearance, but the styling remains just as sophisticated

as it has always been,” said James Buckley, general manager of Smith Motor Sales. “That modern-yet-classic mix is reflected on the inside, with a higher quality interior that now features some of the most advanced technology on the market.”

A three-tube instrument cluster and analog clock are the new centerpieces of the 2014 Mercedes-Benz E-Class Coupe and Cab-riolet, while a redesigned center console flows smoothly from the dashboard to in between the front sport seats. Mercedes-Benz stylists accomplished that nearly continuous design by moving the gearshift to the steering column, a change that opens up ad-

21MSADA


ditional storage space in the console as well.The latest Mercedes-Benz E-Class also benefits from

new technology that was developed for the next genera-tion of the luxury brand’s flagship sedan: the upcoming 2014 Mercedes-Benz S-Class. Debuting as an option throughout the 2014 Mercedes-Benz E-Class lineup, DISTRONIC PLUS with Steering Assist allows drivers to engage in radar-based cruise control that automati-cally maintains a safe distance from vehicles ahead at speeds of up to 120 mph. Meanwhile, the Steering Assist function uses a stereo camera to identify lane markings and keep the car centered in its lane, even through slight curves.

“Mercedes-Benz could have held off and debuted DISTRONIC PLUS with Steering Assist in its flagship S-Class, but it is very serious about winning the luxury sales crown this year, and the 2014 E-Class could very well put the automaker over the top,” noted Buckley. “E-Class buyers are getting head-turning style, an impec-cable interior design and industry-leading technology, and all that is backed by the superior performance that they’ve come to expect from Mercedes-Benz.”

SWANSEA

swansea selectmen Table sales License for online Car dealer

A new Class 2 auto sales license requested for 310 Wilbur Ave. was put on hold by the Swansea Board of Selectmen this month.

The request was made by Michael Berube of Taunton, who wants to open R2D20, an Internet-based wholesale auto business. He said there would be no actual cars on the site; all business would take place online.

Berube purchases vehicles online from sites like craig-slist.com and carsforsale.com and then sells them online. According to The Herald News, he said he’s been in busi-ness for about three years in Fall River. Richard Hague of Somerset would be running the Wilbur Avenue site.

Selectmen Chairman Robert Marquis said the virtual business, which uses a Class 2 auto sales license, is un-fair to the other Class 2 license holders who must bear the expense and regulations of an actual auto sales busi-ness and lot.

Marquis also said there might be a conflict: The Zon-ing Board had a request for a Class 2 license at 560 Wil-bur Ave. in May, which was declined.

That business would have been an actual auto dealer-ship with a car lot. The area is not zoned for car lots, though some are grandfathered in.

nAdA Market Beat


from Around the HornNEWS

PEABODY

acura repeats as edmunds.com’s Best retained Value among Luxury Brands

Savvy car buyers know that the true value of their purchase won’t be fully known until they trade in their vehicle years down the road, but Edmunds.com uses its expertise to predict how much drivers might get back when that time comes. For the second straight year, Acura topped all luxury brands in the auto-research site’s Best Retained Value Awards, with its models pro-jected to maintain 45.1 percent of their original price on average after five years of ownership.

Edmunds.com’s five-year residual values are determined us-ing its True Market Price tool as a baseline, starting with what buyers are actually paying for their vehicles instead of the sug-gested retail prices. Only models that sold at least 100,000 units in the United States last year were considered for the brand-level awards. Among luxury brands, Acura beat out runners-up Lexus and Infiniti to claim its Best Retained Value Award.

“Acura continues to solidify its reputation for offering the best value of any luxury brand, but at the same time, it has been refin-ing its lineup to appeal to drivers’ hearts just as much as their wal-lets,” said Joel Avery, general manager of Acura of Peabody. “The brand is accomplishing that goal by executing its design, engi-neering and production all from within the United States, and the new 2014 Acura MDX is the linchpin of that stateside strategy.”

Rising 4,720 feet through 156 corners on 12.42 miles of asphalt, the Pikes Peak Interna-tional Hill Climb course in Colorado presents an unforgiving challenge for even the most skilled driver. That is, unless that driver is behind the wheel of the redesigned 2014 Range Rover Sport, which recently raced to the course’s 14,110-foot apex in just 12:35.61, a new record for a production SUV.

Driven by Pikes Peak specialist Paul Dallen-bach, the new Range Rover Sport maintained an average speed of 59.17 mph as it climbed to an altitude where the air holds just 58 percent of the oxygen found at sea level. While those condi-tions can significantly diminish engine perfor-mance, the SUV’s 510-horsepower 5.0-liter su-percharged V8 proved more than up to the task. The only modifications made to the Range Rover Sport from its production model were the required roll cage and harness seatbelts to meet safety protocol.

“Land Rover has touted its 2014 Range Rover Sport as the fastest, most agile and most responsive version yet, and the model’s record ride up Pikes Peak offers solid proof of those claims,” said Dave Edwards, general manager of Land

Rover Pea-body. “Any number of ca-pable SUVs could climb Pikes Peak, but to do it quickly, you need a ve-hicle that is extremely nimble through the turns. Fortunately, the next-generation Range Rover Sport is very light on its feet with its new frame.”

PEABODY

2014 range rover sport Climbs Pikes Peak in record Time

22

23troubleshooting

A particular matter we continue to try to solve is the persistent issue of dealer payoffs and delayed lien releases/title is-suances.

For as long as liens have been attached to vehicles by lenders who have financed deals for consumers, complications have arisen that delay an otherwise simple pro-cess. Too frequently, dealers have had a difficult time having lenders promptly ac-cept a payment in satisfaction of the lien, execute a release of that security interest, and mail or deliver to the dealer the cer-tificate of title for the vehicle upon which the lien was attached and the dealer made the loan payoff. This problem can affect consumers directly as well. Many times, consumers that have made a final pay-ment on a vehicle wait weeks, perhaps months, to have the title mailed to them. This delays the consumer from seeking a new vehicle, as they cannot sell or trade the vehicle until they gain possession of the title.

Several years ago, spurred by numer-ous complaints from our member dealers and a lack of enforcement capabilities by the RMV, MSADA led a successful legis-lative effort to clarify the payoff process and create an enforcement tool for the RMV to use against lienholders who do not timely release titles to dealers after a payoff is made. Chapter 243 of the Acts

of 2004, which amended the RMV’s ti-tling law (MGL Chapter 90D) and took effect on November 1, 2004, contained these three main provisions:a. The new law specified a list of instru-ments that are deemed to “clear” imme-diately, including cash, certified checks, cashier’s checks, or electronic transfer of funds;b. Dealers and consumers have the ability to file complaints with the RMV against lenders who fail to comply with the le-gal requirements to release titles within 3 days after demand, as contemplated in the law; andc. The RMV can issue written notices of noncompliance to lenders, conduct hear-ings, and issue fines of up to $5,000 for repeat offenders.

Despite this law, dealers still expe-rience problems with lienholders that choose to not release the lien in a timely manner as required by statute. Many of our members still relay stories to us of in-stances where the lender ignores Massa-chusetts law, does not recognize the form of payment under the law as an immediate “clear”, and delays sending the title for up to a month. Or, the lender takes the pay-ment but still waits an inordinate amount of time to send the title. There is room for improvement within the law. The RMV has been very helpful in working with your Association, our members, and these wayward lenders, but problems continue.

Sometimes the problem is not with the lender, but as a result of dealer error. For instance, if you call a lender and receive a payoff amount but do not make the actual payoff within the grace period allowed by the lender, the lender will reject the pay-off. Similarly, if the amount of the payoff remitted to the lender is grossly incorrect (that is, not within the de minimis amount allowed by the lender), the lender will not accept the dealer payoff. Please avoid

these types of problems when handling payoffs and perhaps some conflict can be eliminated.

To combat some of the problems as-sociated with the lien release process, the RMV has implemented an Electronic Lien and Title Program (ELT), wherein a paperless electronic record of titles, liens and releases is maintained for certain lien-holders. The RMV also maintains a “lien-holder hit list” with the name, address and lienholder code of the most commonly used lending institutions for vehicles, as well as whether the lienholder utilizes the ELT program. While the addition of ELT has helped somewhat, we have heard of problems with lenders even with the ELT process utilized.

Finally, in yet a further twist, dealers report problems they have with receiving titles from the RMV itself. In the past, we have heard of the RMV bundling titles to mail everything out only once or twice a week, and even running out of envelopes for mailing the titles. The problems can be tough enough for dealers without the RMV adding its own gasoline to the fire. If you are having problems with lien re-leases and delayed titles, please let us know at MSADA so that we can continue our efforts with the RMV to improve this process.

When problems occur without your in-formation, we cannot effectively address the issues with the lenders and the RMV. Your information will drive our potential success on this issue.

To inform us of your problems, or should you require additional information, contact Robert O’Koniewski, MSADA Executive Vice President, [email protected] or Peter Brennan, MSADA Staff Attorney, [email protected], or by phone at (617) 451-1051.

t


Despite efforts, Lien Release and title Issuance Problems Persist

stAff Attorney, msAdA

By Peter Brennan, esq.

MSADA 25nAdA Update

Wednesday, October 2 is a very important day for all new car dealers in Massachusetts. MSADA will be conducting its annual “Dealer Day on Beacon Hill.” If you haven’t done this before, please consider, and put it down in your date book. We need a great showing of members to show our legisla-tors how important the issues that affect all of us are. These issues, including “Right to Repair”, the Tesla franchise issue, body shop reimbursement rates, dealer doc fees, and many more will have a huge impact on all of us in the coming years. Failure to engage your legislators on these issues will hurt the value of your franchise.

The day is a great one and you will be glad you attended. MSADA will be providing rooms for those that need to ar-rive the night before. Please put October 2 down in your date book and I look forward to seeing you in Boston at the “Dealer Day on Beacon Hill.”

NADA Chair on CFPBThe following letter is an update from NADA Chairman

Dave Westcott about the current Consumer Financial Pro-tection Bureau issue:

“Ever since the Consumer Financial Protection Bureau (CFPB) released its fair lending guidance to indirect auto lenders on March 21, dealers and lenders have questioned the basis for the guidance—and now Washington lawmak-ers are as well.

“The foundation for the CFPB’s guidance wholly rests on a disputed theory of liability called ‘disparate impact.’ Under this theory, if the auto finance system results in mi-norities paying more for credit than non-minorities in the same credit tier, then unintentional discrimination is taking place. In an effort to ensure lenders are complying with the Equal Credit Opportunity Act (ECOA) and Regulation B, the CFPB targeted the compensation arrangements used by indirect auto lenders with dealers.

“Late last month, House Republicans, including 27 mem-

bers of the Financial Services Committee, sent a letter to the CFPB questioning the intent and methodology behind its guidance. Just as NADA has asked CFPB officials to pro-vide grounds for its assertion that disparate impact exits in auto lending today, Republican lawmakers also called on the CFPB to provide the rationale behind its new fair lend-ing guidelines.

“The House letter, which was dated on June 20, asked the CFPB to explain how it determined two important data points in its study regarding disparate impact in the auto industry: the background of certain borrowers and the pric-ing discrepancies. A total of 35 House members signed the letter which, in part, read: ‘It is troubling that the agency has initiated this process without a public hearing, without public comment, and without releasing the data, methodol-ogy, or analysis it relied upon to support such an important change in policy.’

“The lawmakers have asked the Bureau to respond within 30 days.

“This isn’t the first time Congress has stepped in to ques-tion the unfounded guidance. A letter dated May 28, was circulated by Congresswoman Terri Sewell to colleagues on the House Financial Services Committee. A total of 12 Democrats signed the letter and it was sent directly to CFPB director Richard Cordray. Their letter also asks for the anal-ysis and methodology behind the guidance.

“Despite these requests, the CFPB has not revealed any of this information, including the data it used to run its statisti-cal analysis. This poses a major problem since dealers re-soundingly agree that a federal agency has an obligation to provide transparency, reliable data analysis, interagency co-ordination and public feedback when it attempts to change the financing method of a $783 billion auto loan market.

“Although the CFPB is not accusing dealers of intention-al discrimination, the series of actions it has taken could drastically change how auto finance sources compensate dealers for arranging auto loans. Dealers across the nation understand that changing the system could stifle competi-tion and end up costing consumers more, ultimately hurting the people the CFPB is trying to protect in the first place.

“To date, the CFPB has issued subpoenas to several large auto lenders seeking information on sales practices, pricing and disclosure. The Bureau is seemingly pressuring lend-ers to change the way they compensate dealers so they ulti-mately move toward a flat fee model.

“Over the past few months, NADA opened a dialogue with

by Don Sudbay

CFPB Guidance Questioned by Industry and Lawmakers

Don SuDbay, PreSiDent oF SuDbay autoMotive grouP, rePreSentS MSaDa MeMberS on the naDa boarD oF DirectorS. he welcoMeS your queStionS anD concernS ([email protected]).


CFPB officials, and met several times, to advocate our posi-tion and gain clarity on theirs. We have contested the asser-tion that there is a potential for disparate impact on protected classes of consumers in today’s auto lending. We will contin-ue to let officials—and the public—know that dealers posi-tively and fairly help secure financing for their customers.”

Hillary Rodham Clinton to Keynote NADA Convention in New Orleans

Adding to the list of keynote speakers over the past sever-al years, former Secretary of State Hillary Rodham Clinton will address the National Automobile Dealers Association Convention & Expo in New Orleans next January.

Clinton served as the 67th U.S. Secretary of State from 2009-2013 after nearly four decades in public service as an advocate, attorney, First Lady and U.S. Senator. She will de-liver keynote remarks on the closing day of the 2014 NADA Convention & Expo on Monday, January 27.

“NADA has a long history of inviting high profile speak-ers who have provided diverse perspectives on a wide range of issues,” said Desmond Roberts, chairman of NADA’s convention committee and a Chevrolet dealer in Hodgkins, Illinois. “We’ve hosted U.S. presidents from both parties as well as prime ministers and other dignitaries who have of-fered interesting insights and opinions.”

Other convention speakers include Steve Forbes, chair-man and editor-in-chief of Forbes Media, and NADA Chair-man David Westcott, a new-car dealer in Burlington, N.C., who will deliver remarks on Saturday, January 25.

Army veteran J.R. Martinez, who was injured by a road-side bomb while deployed in Iraq and later won ABC’s “Dancing with the Stars” (13th season), will provide an in-spirational address on Sunday, January 26.

Past keynote speakers at the convention have included U.S. Presidents Gerald R. Ford (1988), George H.W. Bush (2000), George H.W. Bush and William J. Clinton (2009) and George W. Bush (2012), as well as U.K. Prime Ministers Margaret Thatcher (1993) and John Major (2002).

NADA Data: Jobs and Payroll Up at New-Car Dealerships

As the U.S. economy gains momentum and auto sales in-crease, employment at franchised new-car dealerships con-tinued to rise, up 3.2 percent last year, says the National Au-tomobile Dealers Association in its latest state-of-the-indus-try report. In 2012, total employment at new-car dealerships increased to 963,400 employees, up from 933,500, according to NADA Data 2013, a report on dealership sales and finan-cial trends. The average number of employees per dealership rose from 53 to 55 last year. New-car dealerships had an an-nual average payroll of $2.9 million in 2012, up 12 percent from the previous year. The total payroll for all U.S. new-car dealerships was $51.6 billion, up 12.6 percent. Average

weekly earnings of employees at U.S. new-car dealerships last year was $1,030, up 9.1 percent from the previous year.

NADA Moves Dates for 2015–2018 Conventions

Beginning in 2015, the NADA Convention and Expo will be held Thursday to Sunday, instead of Friday to Monday. “After surveying the membership and exhibitors, the consen-sus was to end the convention on Sunday, instead of Mon-day,” said Desmond Roberts, chairman of NADA’s conven-tion committee and a Chevrolet dealer in Hodgkins, Illinois. “The Thursday to Sunday timeframe will allow convention attendees to be back at work earlier the following week.”

The 2014 NADA and American Truck Dealers (ATD) conventions will be held concurrently in New Orleans from January 24-27 as scheduled from Friday to Monday.

Here are the revised dates for the NADA and ATD con-ventions: • 2015 – San Francisco (January 22-25)• 2016 – Las Vegas (March 31-April 3)• 2017 – New Orleans (January 26-29)• 2018 – Las Vegas (March 22-25)

For more information on the NADA convention, visit www.nadaconventionandexpo.org. For more information on the ATD convention, visit www.atdconventionandexpo.org.

NADA: Prices of Used Plug-in Electric Vehicles to Drop 30 percent in 2013

Values for used plug-in electric vehicles are expected to decline nearly 30 percent this year—the highest depreciation out of all vehicle segments, according to the NADA Used Car Guide in its latest report, Plug-in Electric Vehicles: Mar-ket Analysis and Used Price Forecast. “The steep rate of de-preciation for used plug-in electric vehicles can be attributed to limited range, manufacturer incentives and federal tax credits intended to offset the higher prices of new plug-in electric vehicles,” said Jonathan Banks, executive automo-tive analyst for the NADA Used Car Guide.

OSHA Targeting Dealerships OSHA is targeting automotive repair and maintenance

businesses, including new-car dealerships, through a Region 8 Local Emphasis Program. This focused inspection activity, scheduled for between April 16 and at least September 30, 2013, stems from five complaints OSHA Region 8 received in FY 2010, all of which resulted in citations. NADA urges dealerships nationwide to review the inspection directive and their health and safety compliance. Dealerships with specific questions regarding their compliance should contact Lauren Bailey, NADA Regulatory Affairs, at [email protected] or (703) 821-7040 or contact their state or local dealer association.

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