Columbus Fair Auto Auction's recent decision to establish a compliance department was an easy one, given the arguably dizzying pace at which regulatory issues across a variety of domains have accelerated since the 2010 signing of the Consumer Financial Protection Act and the bureau that grew out of it.

 “We recognize our consignors, customers, partners, vendors and employees all need a unified resource with streamlined communication regarding our compliance in areas that range from employee and guest safety to how we protect our data,” Greg Levi, CFAA chief operating officer, said in a July news release. “The auction environment is surprisingly complex, and an efficient solution to compliance is in high demand.”

To that end, the auction named Angela Whitt to be its compliance officer. Her job is to act as a conduit of information between the various departments in the family-owned auction, which is an independent member of the National Auto Auction Association.

Auto Remarketing caught up with Whitt for her take on the biggest regulatory issues facing auctions, challenges in meeting those regulations, and where she plans to focus her efforts in the coming months. 

“The issues that are hot button for us are those that are indirect to the auction,” Whitt said, adding that the creation of the CFPB has provided a lot of unknowns.

“What we know is that as they (third parties doing business with the auction) have this heightened level of scrutiny on them, we as an auction have to work harder to also hold ourselves to that level of scrutiny."

And that has meant delving further into the CFPA and figuring out how exactly what this higher level of scrutiny means for consignors, financial institutions with whom Columbus Fair partners, downstream partners and dealers. That can be anything from data security to FTC requirements.

Vendor Management Program

Whitt envisions a heavy focus on two areas in the coming months. One is improving the auction’s vendor management program.

“We’re looking at upstream and downstream partners, with the CFPB really focusing on compliance for them, and (ensuring) that they have compliant relationships with people like us at the auction level,” she said. “We don’t want to look at OHSA regulations or FTC requirements as a minimum. We want to be a step above that. We want to have a higher level of compliance for them.”

The other area is something Whitt described as novel for auto auctions, especially one of CFAA’s size and service offerings: an environmental stewardship program. That includes an EPA-compliant disposal program and a reduction of the auction’s waste footprint.

“We are a full-service auto auction. We have all of the challenges of a traditional auto auction (driver safety, vendor security) with the additional concerns that you get out of a traditional mechanic shop,” Whitt said.

“We have a full body and paint center and a full-service reconditioning center. Making sure we’re recycling, partnering with vendors of products that are environmentally friendly whenever possible, as well as making sure that we’re watching EPA and OSHA regulations. We’ll be looking closely at this over the next year,” she continued.

Keeping current on compliance issues is a challenge, Whitt acknowledged.

“Regulations are always changing. A lot of legislation gets packaged and bundled. (That means asking) how does this apply to us? To our consignors? Making sure that we can be a valued partner for them. Having access to great resources like NAAA, NIADA, ” she said. “Really watching legislation and understanding how that impacts what we’re doing, how we operate.

“The landscape is constantly moving. It can be a stumbling block for auto auctions if you’re not in front of it.”

‘Embedded in every decision’

Compliance is never far from Jason Poulos' mind. 

“It’s embedded in every decision we make,” said Poulos, who was hired as Manheim’s chief compliance officer in 2013.

Prior to when he came on board three years ago, “the company had been doing compliance in various ways, kind of in ‘silo’ fashion,” Poulos said.

“What Manheim did in 2013 with the advent of my position was to create a chief compliance office,” he said. “They hired me to head up that office and sort of amalgamated all of the compliance functions into one office.”

Today, Poulos is assistant general counsel/chief compliance officer for Cox Automotive, Manheim’s parent company.

In terms of the top regulatory issues for auctions, Poulos mentioned safety is a big one.

“You’ve got hundreds and hundreds of very large machines moving around at the same time. Coordinating that and making sure both customers and employees are safe is very important to us,” he said. “We have a director of safety who collaborates with my office to make sure that we have that at the foremost of their minds.”

Environmental issues are a key compliance component as well, he said, as well as maintaining the integrity of the marketplace. “That entails lots of things," he said, "such as overseeing the integrity of the titling process and the odometer disclosure process."

Poulos also cited the importance of assisting Manheim’s customers with their compliance responsibilities.

“We are a vendor to our customers, and this is both upstream and downstream — in other words, the sellers and buyers,” he said. “They’re under a lot of scrutiny from various regulators. We spend a lot of time trying to make sure that they are comfortable that as a vendor, we are helping them stay compliant with their regulatory requirements.”

What about challenges?

 “The one thing that’s unusual about this marketplace and this industry is that as a lawyer, I traditionally have dealt with single streams of commerce. In the auto auction industry, you have multiple streams going on at any given time,” he said. “You’ve got lots of activity going on.”

In the end, Poulos said, every decision that comes to him means keeping an eye on the bigger picture.

“I have to think beyond the issue at hand. It could be a buying dealer has a particular concern about a vehicle (e.g. something with the titling process). So I have to deal with the issue at hand, but I have to consider how today’s decision is going to affect future situations.

“Whenever I think about resolving something, I’m thinking about it in a way that will guide the future," he went on to say. "We try to treat similar situations similarly, and that’s a real difficulty because each dealer situation, each issue that pops up can be unique.”