Electronic Motor Vehicle Transactions Systems
| Published date | 27 September 2019 |
| Record Number | 2019-20454 |
| Section | Proposed rules |
| Court | National Highway Traffic Safety Administration |
Federal Register, Volume 84 Issue 188 (Friday, September 27, 2019)
[Federal Register Volume 84, Number 188 (Friday, September 27, 2019)]
[Proposed Rules]
[Pages 51090-51092]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20454]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 580
[Docket No. NHTSA-2019-0092]
Electronic Motor Vehicle Transactions Systems
AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).
ACTION: Request for comments.
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SUMMARY: In a separate Federal Register document, NHTSA issued a final
rule that will allow for state adoption of electronic odometer
disclosure systems without having to petition the agency for approval.
NHTSA believes that, with the promulgation of this final rule, there
are no longer any Federal disclosure requirements that must be done
through paper, rather than electronic, disclosures. Therefore, States
now possess the necessary authority to adopt completely paperless
vehicle transactions if they choose to do so, and experience in other
sectors of the economy suggest that adopting paperless systems
generally reduces unnecessary transaction costs and may yield
additional efficiency gains as well. In this document, NHTSA requests
comment on the nature and scope of these potential benefits for States,
consumers, and other stakeholders such as dealers and insurance
companies; any interest or plans among States in moving towards
paperless systems; and what resources and guidance may be needed to
assist States to transition to purely electronic systems.
[[Page 51091]]
DATES: You should submit comments early enough to ensure that Docket
Management receives them not later than October 28, 2019.
ADDRESSES: You may submit comments to the docket number identified in
the heading of this document by any of the following methods:
Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting
comments.
Mail: Docket Management Facility, M-30, U.S. Department of
Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
Hand Delivery or Courier: West Building Ground Floor, Room
W12-140, 1200 New Jersey Avenue SE, between 9 a.m. and 5 p.m. Eastern
Standard Time, Monday through Friday, except Federal holidays.
Fax: (202) 493-2251.
Regardless of how you submit your comments, you should mention the
docket number of this document. You may call the Docket at (202) 366-
9324.
Instructions: For detailed instructions on submitting comments and
additional information on the rulemaking process, see the Public
Participation heading of the Supplementary Information section of this
document. Note that all comments received will be posted without change
to http://www.regulations.gov, including any personal information
provided. Please see the Privacy Act discussion below.
Privacy Act: In accordance with 5 U.S.C. 553(c), DOT solicits
comments from the public to better inform its decision-making process.
DOT posts these comments, without edit, including any personal
information the commenter provides, to http://www.regulations.gov, as
described in the system of records notice (DOT/ALL-14 FDMS), which can
be reviewed at https://www.transportation.gov/privacy. Anyone can
search the electronic form of all comments received into any of our
dockets by the name of the individual submitting the comment (or
signing the comment, if submitted on behalf of an association,
business, labor union, etc.).
Confidential Information: If you wish to submit any information
under a claim of confidentiality, you should submit two copies of your
complete submission, including the information you claim to be
confidential business information, and one copy with the claimed
confidential business information deleted from the document, to the
Chief Counsel, NHTSA, at the address given below under FOR FURTHER
INFORMATION CONTACT. In addition, you should submit two copies, from
which you have deleted the claimed confidential business information,
to Docket Management at the address given above under ADDRESSES. When
you send a comment containing information claimed to be confidential
business information, you should follow the procedures set forth in 49
CFR part 512 and include a cover letter setting forth the information
specified in our confidential business information regulation. (49 CFR
part 512.)
Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov and follow the
online instructions for accessing the dockets or go to the street
address listed above.
FOR FURTHER INFORMATION CONTACT: For policy and technical issues: Mr.
David Sparks, Director, Office of Odometer Fraud, National Highway
Traffic Safety Administration, 1200 New Jersey Avenue SE, Washington,
DC 20590. Telephone: (202) 366-5953. Email: [email protected]. For
legal issues: Mr. Thomas Healy, Office of the Chief Counsel, National
Highway Traffic Safety Administration, 1200 New Jersey Avenue SE,
Washington, DC 20590. Telephone: (202) 366-5263.
SUPPLEMENTARY INFORMATION: NHTSA has issued a final rule amending Part
580 to allow for the establishment of electronic odometer disclosure
systems allowing odometer disclosures required by the Motor Vehicle
Information and Cost Savings Act (Cost Savings Act) to be made
electronically (81 FR 16107). The odometer disclosure laws and
regulations protect purchasers of motor vehicles from odometer fraud.
See Public Law 92-513, 86 Stat. 947, 961-63 (1972). NHTSA had
previously published a notice of proposed rulemaking (NPRM) for this
rulemaking on Friday, March 25, 2016, and the comment period for the
NPRM closed on May 24, 2016.
The scope of this rulemaking's cost-benefit analysis was limited to
the direct effects of odometer disclosures, and thus the NPRM did not
explore broader issues associated with adopting purely paperless
transactions for automotive sales, particularly the wider benefits to
States, consumers, and other stakeholders that could arise should
States adopt such systems. To assist States and other stakeholders in
assessing whether to adopt purely paperless procedures, NHTSA now seeks
additional comments on these potential benefits and the plans and
interest among the States in adopting these systems.
I. Background
There were 17.3 million new vehicles \1\ and approximately 40
million used vehicles \2\ sold in the U.S. in 2018, but the total
number of vehicle transactions is much larger because every consumer
purchase and sale may involve multiple wholesale transactions, and
because transfers to salvage companies or the scrappage of vehicles
necessitates additional transactions by insurance companies and other
stakeholders. Until the publication of today's final rule, Federal law
prohibited electronic odometer disclosures except in and to the extent
that a subset of States that had received specific NHTSA exemptions.
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\1\ The Year in Auto Sales: Facts, Figures and the Best Sellers
from 2018, Automobile, (Jan. 4, 2019), available at https://www.automobilemag.com/news/year-auto-sales-facts-figures-bestsellers-2018/ (last visited June 19, 2019).
\2\ Used Vehicle Outlook 2019, Edmunds, available at https://www.edmunds.com/industry/insights/ (last visited June 7, 2019).
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Now that NHTSA has lifted this general prohibition, the Department
anticipates that States may be interested in moving towards completely
electronic transactions for motor vehicles. As experience in other
sectors of the economy has demonstrated, electronic transactions would
be expected to lead to many efficiency gains to the significant number
of entities involved in motor vehicle transactions, including motor
vehicle dealers; motor vehicle auction companies; insurance and
casualty companies; banks, credit unions, and finance companies;
salvage companies and junk yards; state departments of motor vehicles;
and consumers; and all other persons or entities required to make
odometer disclosures. For example, stakeholders will no longer be
required to scan hard copy documents with wet signatures to retain or
manage records electronically. Moreover, reductions in postage and
delivery costs, including overnight delivery, will accrue from removing
the need to mail hard copy documents with wet signatures. NHTSA also
anticipates that paperless transactions will reduce the time needed to
complete vehicle transactions, which could lead to substantial
additional cost savings. States adopting electronic transaction systems
may also see cost savings through reduction in records retention and
retrieval costs and by eliminating the need to print titles on secure
paper. NHTSA estimates that there are at least 48.5 million
transactions involving odometer disclosures completed annually by motor
vehicle dealers and private parties through private party
[[Page 51092]]
sales that could potentially be conducted electronically as a result of
the final rule if all states that have not already adopted electronic
odometer disclosures decide to do so.\3\
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\3\ Virginia, Wisconsin, New York, Florida, Texas and Arizona
already have adopted some form of electronic odometer disclosure.
These states together account for 5 million new vehicle sales. See
Auto Retailing: State by State, National Automobile Dealers
Association, https://www.nada.org/statedata/ (last visited Jul. 22,
2019). Because NHTSA was not able to obtain used vehicle sales data
by state, we are using vehicle registrations for each state as a
percentage of total vehicle registrations as a proxy for used
vehicle sales. Together Virginia, Wisconsin, New York, Florida,
Texas and Arizona account for 24.9 percent of all vehicle
registrations. See Highway Statistics Series, Office of Highway
Policy Information, Federal Highway Administration, https://www.fhwa.dot.gov/policyinformation/statistics/abstracts/2015/ (last
visited Jul. 22, 2019). Based on this number, we estimate that there
are approximately 10.12 million used vehicles sold in states
employing some form of electronic odometer disclosure. We subtracted
new and used vehicle sales in states already employing electronic
odometer disclosure from the total number of new and used vehicle
sales in 2018. Of these used vehicle sales, approximately 70 to 75
percent are currently subject to the odometer disclosure
requirements of part 580. See Used Vehicle Outlook 2019, Edmunds,
available at https://www.edmunds.com/industry/insights/ (last
visited June 7, 2019). In 2017, approximately 71 percent of used
vehicles were sold by either a franchise or independent dealer. We
stated in the final rule that used vehicles sold through dealers
will likely involve at least two odometer disclosures, one when the
vehicle is wholesaled and again when the vehicle is retitled. We
arrived at our estimate by determining the total number of used
vehicle sales currently subject to odometer disclosure requirements
in states without electronic disclosures and added this number to
the number of used vehicles sold by dealers currently subject to the
odometer disclosures in states without electronic disclosure. This
number was added to the number of new vehicles sold in states
without electronic disclosure. The equation is ((29.88 * .70) +
(20.9 * .71) + 12.7). NHTSA seeks comment on whether this is a
reasonable method of estimating the number of sales-related odometer
disclosures in these states.
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Therefore, NHTSA believes that there is strong incentive for States
to adopt electronic transaction systems. To assist States in making
prudent decisions based on the best available evidence, in this
document, NHTSA requests comment on the ways that adopting purely
paperless transaction systems may reduce vehicle transaction costs for
States, consumers, and other stakeholders. Specifically, can these
systems reduce State transaction costs for receiving, processing, and
storing odometer disclosures and creating titles? Also, will adopting
purely paperless procedures reduce transaction costs for (i) wholesale
transactions; (ii) auction transactions; (iii) salvage or junk
transactions; or (iv) retail transactions? Moreover, what benefits will
purely paperless transactions have for stakeholders, including from the
following industries: (i) Insurance; (ii) salvage and whole automobile
auctions; (iii) new, used, and wholesale vehicle dealers; (iv) vehicle
registration companies; and/or (v) technology companies providing
systems for any of the above industries?
NHTSA also requests comment on any plans that States currently have
to adopt electronic transaction systems now that the Federal
requirement for paper odometer disclosures has been eliminated, as well
as the general interest that States may have in adopting these systems
even if no specific plans exist yet. In addition, NHTSA requests
comment on the steps the agency can take to assist in assisting States
in determining whether and how best to implement such procedures. For
instance, (i) what questions do States have in determining whether and
how to implement these systems and what can NHTSA do to help?; (ii)
What can be done to support development of secure odometer disclosure
programs and electronic titling systems more generally?; (iii) How can
NHTSA support the interoperability of multiple state electronic titling
systems?
Instructions for submitting comments are described above.
Issued in Washington, DC, pursuant to authority delegated in 49
CFR 1.81, 1.95, and 501.8(d).
Jonathan Charles Morrison,
Chief Counsel.
[FR Doc. 2019-20454 Filed 9-26-19; 8:45 am]
BILLING CODE 4910-59-P
