The General Assembly of North Carolina has amended its laws governing the title transfer of salvage vehicles by removing notary requirements, permitting electronic signatures and allowing access to division of motor vehicle systems.

Prompted by the global health crisis, the amendment, due to be signed into law in mid-July, marks a new milestone because now 25 – half the states -- would officially be eligible to transfer total loss titles digitally.

“With the passage of HB 337 (Regular Session 2019), North Carolina became the 25th state to enable electronic salvage title processing,” said Sarah Hunsicker, director of government affairs for Dealertrack Registration and Title Solutions.

Even before the pandemic forced dealerships, DMVs and auctions to operate with fewer staff and social distancing, total loss title processing could take 8-10 weeks. The new law paves the way for digital processing of total loss titles in North Carolina.

One of the largest recovery associations in the country recently proposed implementation of a COVID-19 surcharge and a new set of post-pandemic policies and also issued a white paper setting forth uniform standards for operating in this changed environment.

The American Recovery Association is advising that all recovery agencies, forwarders, and creditors immediately implement a "Post Recovery Safety Surcharge," a specific fee charged by the recovery agency to the creditor. This fee reportedly will be used to partly offset some of the additional costs to provide safety equipment and security measures relating to the repossession and post-repossession and redemption process.

The ARA explained that the COVID-19 guidance from the Centers for Disease Control and Prevention to keep all parties safe and wear personal protective equipment comes with increased costs for recovery agencies. The purchase of PPE is an added layer of expense that was not prevalent before the pandemic and was not factored into the agencies' operating costs.

AAA reccomends guidelines for Dealers
The AAA reccomends COVID-19 guidelines for repossession of vehicles

In addition, the ARA explained that operating in a COVID-19 environment means an added level of compliance, possible litigation for COVID-19-related issues, increased liabilities, and higher workers' compensation rates. The ARA posited that there are coronavirus risks due to unknown exposures that the industry will be required to handle when engaging in collateral recovery. These potential exposures to the virus increase liability to recovery agencies and result in higher costs. In addition, the ARA theorized that employees may seek to file workers' compensation claims due to the exposure they incurred. Finally, consumers may claim that they contracted COVID-19 as a result of their cars being repossessed and/or their property being mishandled by the recovery agent.

The ARA proposes that the surcharge be implemented through an addendum to the recovery agency's repossession agreement with the creditor. The draft addendum prepared by the ARA does not designate a specific amount for the surcharge; I assume it will be up to each recovery agency and creditor to negotiate the appropriate amount.

Additionally, the ARA recommends that every recovery agency adopt a new set of post-pandemic policies and procedures addressing its operations in a COVID-19 environment, including:

  • Wearing of PPE (gloves, masks, gowns, etc.);
  • Social distancing of employees and consumers while in the agency's facilities (including breaks and mealtimes);
  • Following strict CDC guidelines for dealing with the public and their property;
  • Following a 72-hour "do not access" policy where the recovery agency would not access any repossessed or recovery vehicle to itemize and remove personal property for a period of no less than 72 hours after the time of repossession (although this might upset the timing on a recovery agent's duty to remove and itemize personal property left in a vehicle within a shorter state-mandated time period after recovery of the collateral); and
  • Disinfecting equipment, shared vehicles, and consumer service areas.

Finally, the ARA outlined some of the proposed policies in its summary white paper "Setting Uniform Standards for Operating in a Changed Environment," which is available on its website. The white paper compares the employment wages, equipment pricing, fuel costs, technology fees, compliance fees, and secured vehicle storage costs in 2000 versus 2020 and makes the case for change within the industry and ways in which all parties can help build a viable and sustainable business model that provides a network of quality recovery professionals. If the dollar figures in the white paper are accurate, one can easily see how much more it costs to operate a recovery agency now than it did 20 years ago; in this post-Consumer Financial Protection Bureau/post-COVID-19 world, that's a lifetime ago.

The white paper also provides for uniform operating standards and terminology by outlining an agreed-upon consensus among recovery industry personnel and forwarding clients on 18 different issues concerning the repossession industry. Some of the more challenging issues to implement include:

  • Personal property inventory and storage (storage and removal of property "must now be compensated");
  • Reverse indemnification ("New contract language must be provided that specifies liability resides with the appropriately responsible parties."); and
  • Compliance education requirements ("Professional recovery agencies should choose which compliance program they offer and should not be mandated by the lender or forwarder. If a lender or forwarding company requires an additional compliance program, all additional compliance expenses become the financial responsibility of the requiring party.").

The ARA indicated that it is confident that if agencies, forwarders, and creditors work together, they can develop a more sustainable model for the recovery industry that can serve all parties into the future.

© 2020, all rights reserved. Based on an article from Spot Delivery. Single print publication rights only to Used Car News.


Scrap metal dealers now required by state law to register with the attorney general’s office for the first time since 2017 may now begin doing so, Kansas Attorney General Derek Schmidt said recently.

Under the provisions of the 2015 scrap metal law, which were suspended by the Legislature from 2017 to 2019 but have been reinstated for 2020, every “scrap metal dealer” must obtain a registration certificate from the attorney general’s office in order to legally purchase scrap metal in Kansas. The law’s purpose is reducing scrap metal theft in the state.

The application form for scrap metal dealers and related proposed regulations are now available on the attorney general’s website at Once scrap metal dealers begin registering with the office, the website will also include a public directory of dealers whose registration certificates have been issued.

Beginning July 1, scrap metal dealers are also required to report certain transactions to the Kansas Bureau of Investigation through an online database.

The Federal Trade Commission released the final agenda for a July 13, 2020 virtual workshop that will seek input on proposed changes to the Gramm-Leach-Bliley Act‘s Safeguards Rule, which requires financial institutions to develop, implement, and maintain a comprehensive information security program.

The virtual workshop will examine some of the issues raised in response to amendments the FTC has proposed to the Safeguards Rule. In 2019, the FTC sought comments on the proposed amendments to the rule.

The virtual workshop will feature five panel discussions examining such issues as: the costs and benefits of information security programs; how information security programs and practices scale to smaller businesses; continuous monitoring, penetration, and vulnerability testing; accountability, risk management, and governance of information security programs; and encryption and multifactor authentication.

The workshop will be held online. Information about how to view the workshop will be posted on the event page.

EEOC Sues NY Dealer

July 06, 2020

The U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit on June 24 that James Cars of Hamburg, LLC, doing business as James Mitsubishi Hamburg, and its parent company James Auto Management LLC, violated federal law by subjecting two female employees to a sexually hostile work environment.

According to the EEOC’s lawsuit, the general manager of the Hamburg dealership and two other dealerships owned by the parent company in Rome and Greece, N.Y., made numerous unwelcome sexual advances and comments to two female employees. The manager’s unwelcome conduct included repeatedly staring at and making comments about their bodies and asking them to join him in his hotel room. According to the lawsuit, the general manager mimed sex acts in front of a female employee and told her that he imagined waking up next to her in bed. The EEOC further alleges he engaged in inappropriate physical contact with the female employees, including giving unwelcome massages.

The EEOC’s lawsuit alleges the general manager’s behavior was well-known throughout the dealership, including by the Vice President of Human Resources, who witnessed and encouraged the harassment. Ultimately, one female employee was forced to quit because James Mitsubishi Hamburg took no action to stop the harassment. Such conduct violates Title VII of the Civil Rights Act of 1964, which prohibits sexual harassment in the workplace.

The EEOC filed suit  in the U.S. District Court for the Western District of New York, Buffalo Division, after first attempting to reach a pre-litigation settlement through the agency’s conciliation process. The EEOC seeks compensatory and punitive damages for both affected employees, back pay for the employee forced to resign, and injunctive relief designed to prevent future sexual harassment in the workplace.

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