As previously reported in the NewsLetter, changes made to the law governing the Department of Banking and Insurance (DOBI) has changed the way DOBI will be calculating its license fees. In addition, the new law changed the term for all “consumer credit” licenses, including Motor Vehicle Retail Installment Seller licenses (a dealership’s “banking license”) in order to make the term of these licenses coincide with DOBI’s fiscal year. The intent of these changes was to make DOBI “self-funding” by making each regulated industry pay, through an “annual assessment” in lieu of the license fee, that portion of the DOBI budget which reflects the cost of regulating that industry. Within each industry, the fee for any individual licensee’s license will be determined by the volume of regulated business that company engages in. These changes were scheduled to be phased in through 2006 and 2007.
In order to phase in the new license period, the usual 2-year term of DOBI licenses was shortened to 18 months. As a result, all DOBI Motor Vehicle Retail Installment Seller licenses are scheduled to expire on June 30, 2007.
DOBI also has, as members are aware, implemented a new “annual report” requirement. All holders of DOBI-issued licenses are now required to submit an “annual report” to DOBI which details the amount of business the licensee has engaged in which is subject to DOBIs regulatory authority. The deadline for filing the annual report—electronically—is April 1, 2007.
Unless you have already filed a request to file a paper report, you must file your annual report electronically (the deadline for requesting a paper report was January 15). “Paper” annual reports were due on March 1, 2007. This April 1 deadline is an extended deadline for the first year of implementation; DOBI may change the filing deadline for 2008 and beyond.
Please Note: DOBI has mailed electronic filing instructions to each license holder. Included with these instructions is an “authentication code” that you will need in order to set up your online report filing account. DOBI has recently updated its information website to advise on the status of its mailings and to give contact information for any licensee who has not received instructions and an authentication code as follows:
“The final batches of licensee notifications containing the instructions to access the online annual reporting system were mailed
If you have not received your notification by
The following information will be needed to file your annual report:
¨ Number of finance contracts and total amount financed for vehicles sold for a cash price of up to $10,000 (including lease transactions when the lease agreement contains a buy-out clause) or less;
¨ Average amount financed for vehicles sold for $10,000 or less;
¨ Number of finance contracts and total amount financed for vehicles sold for a cash price between $10,001 and to $50,000 (including lease transactions when the lease agreement contains a buy-out clause);
¨ Average amount financed for vehicles sold for $10,001 up to $50,000;
¨ Number of finance contracts and total amount financed for vehicles sold for a cash price over $50,000 (including lease transactions when the lease agreement contains a buy-out clause); and
¨ Average amount financed for vehicles sold for over $50,000.
Important Note: In compiling this reporting information, DOBI has instructed that lease transactions should be included as finance transactions whenever the lease agreement contains a buy-out agreement (as most lease agreements do).
Note: Determining the “Cash Price.” For purposes of DOBI reporting, the “cash price” of a vehicle is the price of the vehicle, and does not include other costs and fees, extended warranties, or other add-ons which are not part of the vehicle. In the case of a lease, the cash price is defined as “the total lease payments less sales tax.” This would also include any cap cost reduction, which is essentially a pre?payment.
DOBI has prepared a worksheet on which the annual report information may be prepared prior to filing. This worksheet may be downloaded from DOBIs website at:
Further information is available at the DOBI’s website FAQ for Motor Vehicle Installment Sellers on the Annual Reporting Requirement at: http://www.state.nj.us/dobi/bankdedfund/bankdedfunding.htm#annualreport.
If the filing of the annual report is late, dealers are subject to a late penalty of $50 for each day the annual report filing is late. The Division of Banking MUST have report information on ALL licensees in order to properly assess and bill all licensees. Therefore, the Division may act to suspend or revoke the license(s) of a licensee that continues to fail to file its required report.