WASHINGTON, D.C., September 14, 2022 — The Marine Retailers Association of the Americas collaborated with the RV Dealers Association, the National Powersports Dealer Association, a number of state-based marine trades associations, the U.S. Small Business Administration’s Office of Advocacy and more, to voice its opposition to the Federal Trade Commission’s recently proposed Auto Rule.
As the leading trade associations and organizations representing dealers and other businesses targeted by the proposed regulation, MRAA and its colleagues worked to educate members on the need to fight these proposed rules, while also highlighting the many reasons that marine dealerships should be exempted from the onerous regulations they present. The MRAA submitted comments to the FTC, which can be found here, Monday, Sept. 12, 2022.
By a 4-1 vote on June 23, the FTC issued a notice of proposed rulemaking, which suggested regulations that would change the way dealers interact with their customers. The regulation, dubbed the “Motor Vehicle Dealers Trade Regulation Rule,” would apply to cars, boats, motorcycles and RVs, and is primarily aimed at removing deception and other unfair business practices from the motor vehicle market.
Among many other new rules, the proposed regulations would seek to prohibit unfair business practices, of which there have been little to no evidence of such issues existing in the marine industry. Dealers of all motor vehicles would be prohibited from selling any add-on goods or services that do not provide any consumer benefit — as defined by the FTC. Dealers would be required to keep for at least two years, both digital and physical copies, of all aspects of their dealership marketing and sales records and practices. Combined, these proposed regulations would present an extreme burden to the oftentimes small businesses that comprise the marine industry.
“Although the MRAA greatly appreciates the FTC’s focus on safeguarding consumer transactions, we feel that this rule was not drafted with our members in mind and fear that the cost of compliance will greatly overburden our members,” says Chad Tokowicz, MRAA Government Relations Manager. “There is no documented history of fraud or deceptive practices among marine dealers, and that, combined with MRAA’s focus on sales and compliance training, it is our hope that we have provided sufficient rationale to exempt our dealers from this regulation.”
The FTC says that it put forth this regulation because it has taken more than 50 enforcement actions related to automobile transactions in the last 10 years while also receiving more than 100,000 consumer complaints, annually, related to the car buying experience. Although the MRAA supports fairness and transparency throughout the purchasing process, the proposed regulation was crafted only with automobile dealers in mind, and therefore, the proposal does not adequately take into consideration the many nuances of the boating consumer or how boat, RV and powersports dealers conduct business.
“RVDA and MRAA strongly agree that the proposed FTC rule will have a negative impact on consumers,” said RVDA President Phil Ingrassia. “The new requirements, if adopted as written, will complicate the buying process for RVs and boats through unnecessary paperwork for dealers that will confuse buyers and will drive up costs.”
Aside from working with other trade associations in the outdoor recreation industry, the MRAA also worked closely with the Small Business Administration’s Office of Advocacy. The Office of Advocacy is the independent voice for small business within the federal government and is the watchdog of the Regulatory Flexibility Act. MRAA worked closely with the Office of Advocacy and provided information to the SBA, which was included in their comment letter that can be found here.
“Particularly in a small-business dominated industry like the boat business, this is a gross overregulation with no merit or proven need for such rules,” says Matt Gruhn, MRAA President. “It’s our belief that boat dealers should be exempted from any such regulations, particularly in light of the difficulty these rules would impose on boat buyers, who want the flexibility to buy the right product with the right parts and services that will help them make the most of their passion for on-water recreation.”
The FTC closed public comment period September 12, and after going through the public comments the FTC will determine how to move forward. The MRAA wrote a blog outlining the proposed regulation and the impact it could have on your dealership.
About the Marine Retailers Association of the Americas
At the Marine Retailers Association of the Americas, we believe that for the marine industry to thrive, the retail organizations that interact with the boaters in their community must thrive. With that in mind, MRAA works to create a strong and healthy boating industry by uniting those retailers, providing them with opportunities for improvement and growth, and representing them with a powerful voice. For more information, visit MRAA.com or contact us at 763-315-8043.