2. James S. Ganther, Esq. President Mosaic Compliance Services

3. Digital Compliance What is it? Any compliance solution or tool that is: Web-based; or Computer-based; and Automated Efficient Effective

4. Digital Compliance Why do you care? Research shows that: 1.Dealers are cheap. 2.Dealers expect compliance solutions from their vendors.

5. Digital Compliance Digital Compliance Topics: Environmental, Heath & Safety Human Resources OFAC Safeguards Rule Red Flags Rule

6. Digital Compliance But wait, there’s more: F&I Menu Dodd-Frank/Adverse Action Notices Compliance Training Product Training Audit and Review

7. Digital Compliance A few thoughts: If you don’t document it, it didn’t happen. Learning Management System (“LMS”) –Tracks usage –Generates reports –Archives results

8. Familiar Compliance Hot Spots

9. Environmental, Health & Safety In a nutshell, Dealers need to obey: OSHA DOT EPA State agencies The local press corps

10. Environmental, Health & Safety

11. Human Resources In a nutshell, Dealers need to: Hire employees Discipline employees Fire employees Not get sued

12. Human Resources

13. OFAC In a nutshell, Dealers must: Confirm that their customers are not on the list of Specially Designated Nationals (the “Bad Guys List”) Don’t close Gaddafi!

14. OFAC

16. Safeguards Rule In a nutshell, Dealers must have: A Compliance Officer Information Security Policy Physical, Electronic, and Procedural Safeguards to protect consumers’ Nonpublic Personal Information (NPI)

17. Safeguards Rule

18. Electronic Document Management Incorporate all your deal documents into our online compliance solution Quickly and easily retrieve documents at the touch of a button No more misfiled deal jackets or lost documents Stay compliant with the Safeguards Rule Keep your customers’ personal information secure. © DealerTrack, Inc. All Rights Reserved

19. Red Flags Rule In a nutshell, Dealers need: 1.Policy 2.Training 3.Detect 4.Prevent 5.Mitigate 6.Oversee 7.Ensure

20. Red Flags Rule

21. Risk Level & Status Segment

22. OFAC, ID Match & Red Flag Alerts

23. ID Match Application vs. Credit Bureau

24. Manual Review Process:

25. “Out of wallet” Authentication:

26. In a nutshell, Dealers must present products: Consistently Accurately Uniformly Legally Effectively F&I Menu

29. Dodd-Frank In a nutshell, Dealers need to : Provide adverse action notices that –Disclose numeric score –Give range of scores –Decision factors –Date of score –Entity that created the score –Person at the dealership to blame

30. Customer ABC 123 America Street Anytown, USA Customer ABC Dodd-Frank

31. Compliance Training In a nutshell, Dealers need to: Expect their non-lawyer employees to consistently obey laws they do not know exist. Yeah, good luck with that.

32. Compliance Training

33. Product Training In a nutshell, Dealers need to: Expect their employees to always tell the truth. Expect their employees to consistently describe the features, benefits, limitations and exclusions of every product they sell.

34. Product Training

35. Audit & Review

37. If Dealers Don’t Comply

38. Conclusion 1.Simple, Effective, Affordable digital compliance tools are available. 2.Dealers expect vendors to cover their subject. 3.No one vendor covers everything. 4.Dealers need a checklist to make sure all the bases are covered.

39. Conclusion For a copy of a Compliance Checklist: jganther@mosaic-compliance.com