F&I License Law Considered

Like insurance agents and marriagecounselors, Virginia'sdealership finance and insurance managers could join the ranks of business professionals requiring a license.

The Virginia Automobile Dealers Assn. is exploring whether it's time to propose an F&I manager licensing law. If enacted (and odds are that the powerful VADA could see it through), Virginia would be the first state in the nation to approve such a proposal.

Reported F&I abuses at dealerships in Tennessee, California and Florida, spurred VADA President Don Hall to consider ways to rid F&I offices of unsavory personnel.

Hall has set up an association task force to study proposed legislation requiring state licenses for F&I practitioners. Dealers themselves are licensed in all 50 states.

In the belief that F&I scams against consumers are perpetrated by “rogue” operators who flit from store to store, Hall argues that the industry as a whole has been tarnished.

Licensing F&I managers is considered a remedy to unethical practices that includes unordered products and services slipped into payment plans as well as discriminatory practices against African-American or Hispanic consumers.

Hall says that as a former F&I manager himself, he became aware of pressures to “pack” payments and the ill-will it created.

Many dealers generally are leery of more state interference in their business. But Hall says, “We here in Virginia have a regulatory mechanism that works much more effectively for our 550 new-car dealers. It's the Virginia Motor Vehicle Dealer Board, made up of nine franchised dealers, seven independent dealers, a consumer, and the commissioner of agriculture and consumer services and motor vehicles. They're all appointed by the governor, and there is little or no feeling by the dealers that they're being over-regulated by state bureaucrats or inspectors.”

Hall has appointed a task force to explore how F&I licensing could be added to the statute that already covers dealers and their sales persons.

“It's one thing to have a code of ethics hanging on the wall,” Hall said. “It's quite another to earn a license and not want to risk losing it.”

Hall has full support from NADA's 2002 chairman, W. Carter Myers III, a dealer in Charlottesville, VA. Myers is a member of the task force designated to develop an F&I licensing statute for presentation this fall to the VADA board of directors.

“F&I is a great profit center that also is a heck of a problem center,” says Myers. “The time has come to professionalize the F&I trade, just as attorneys, accountants and social workers are all licensed. We would see F&I abuses and scandals sharply reduced.”

Issues to be addressed include how to treat backup F&I writers for managers who are on vacation or ill, as well as vehicle sales people who sell F&I as part of the total transaction.

Dave Robertson, whose Association of Finance and InsuranceProfessionals (AFIP), has long regarded its certification process as a ticket to professional status, has endorsed the move toward state licensing.

“AFIP's certification process could become a criterion for licensing by Virginia and other states,” Robertson says.

Hall says he's convinced that a licensing statute would “professionalize” the F&I side of the dealership business.

“No one wants to lose a license to work,” he declares. “And having a license on the wall would make the customers feel a lot more secure about the entire process at the dealership.”