Kelly’s Korner – Some Things Old & Some Things New
Q. My file cabinets are full. Can I toss credit bureaus and bank turndown notices?
A. As the end of the year approaches, our file cabinets beckon. First let’s tackle the “dead deals”. These are the deals that never went the distance. Something happened that prevented the deal from being delivered. Perhaps it was credit, lack of down payment, or the inability to prove the income. Regardless of the reason, Regulation B and the ECOA require retention of the deal file for 25 months (12 months for a business) from the date of the action notice. You can then cross shred and incinerate the file.
Keep bank turndown notices in the file for the prescribed length of time. Why? Think audit trail. If you toss the turndown notices, how can you verify where you sent the credit application, when the lender responded, and what the loan underwriter’s decision was? The notices contain more than a simple yea or nay. They verify the dealership was not the deciding factor in granting credit. Worth keeping for at least 25 months, wouldn’t you say?
Retain deals that rolled for 7 years or until the contract has expired, whichever is greater. Remember that you must keep all jackets with customers’ non-published information in a secured environment. Do you have your Safeguards policies and procedures defined and implemented? If not, call your association or call us. Help is closer than you think.
Q. We are a small dealership in a small town. We do things differently, and that’s just the way it is .
A. Growth demands change, knowledge, and venturing into new-to-you avenues. If the dealership is making so much money the dealer cannot go home because he/she is counting the income dollars and figuring how much to set aside for taxes, then you are right – no change is necessary. However, if production is lower or the same as last year, then growth is not occurring and you may even be losing market share. If this describes your situation, then it is time to evaluate your processes and ask why you are continuing them. Because that is the way you have always done it is simply not good enough.
Do your processes streamline the way you do business? If you desire a different outcome, you must change something in the process. What to change is the key. Progress does not always require a huge change. Be open to ideas, listen and learn the why’s of things. Ask questions. Remember when you were new to your job? You often asked why things were done in a certain way. You thought about ways to save time, to work smarter, to be more effective. Revisit that frame of mind. Ask yourself and others who work with you why you do things a particular way. Is there a better way or a more productive way to take care of business? Do you have checks and balances in the booking out of trade-in vehicles? Do you have checks and balances for bookkeeping? While few of us enjoy an efficiency review, we can look forward to the rewards that change can make.
OIADA Squeaky Wheel Newsletter, November 2004, p. 21