Interpretation ID: aiam4217
Esq.
Director
Office of Consumer Litigation
Department of Justice
P.O. Box 386
Washington
D.C. 20044;
Dear Mr. Fleder: This is in response to the request from Don O. Burley of your offic for the National Highway Traffic Safety Administration's interpretation of the Federal Odometer Disclosure Regulation, 49 C.F.R. Part 580. Specifically, Mr. Burley questioned the identity of the parties required to retain odometer disclosure statements under 49 C.F.R. S 580.7.; In 1977, the Agency decided that a regulation requiring the dealer o distributor to retain the statements issued to him (transferee odometer statements) and the statements he issued (transferor odometer statements) would enhance the value of odometer disclosure statements as investigatory tools. Therefore, the Agency proposed the following regulation:; >>>Each dealer or distributor of a motor vehicle shall retain for fou years each odometer mileage statement which he receives. He shall also retain for four years a photostat, carbon, or other facsimile copy of each odometer mileage statement which he issues. . . .<<<; 42 Fed. Reg. 58547 (1977). General Motors responded to this notice by questioning the regulation' application to manufacturers. Section 402 of the Motor Vehicle Information and Cost Savings Act (the 'Act'), 15 U.S.C. S 1982, defines 'dealer' as 'any person who has sold 5 or more motor vehicles in the past 12 months to purchasers who in good faith purchase such vehicles for purposes other than resale.' In addition, the Act defines 'distributor' as 'any person who has sold 5 or more vehicles in the past 12 months for resale.' Therefore, under the regulation as proposed, a manufacturer was defined as a distributor and would have been required to retain odometer disclosure statements. However, the Agency noted that since 49 C.F.R. S 580.5 specifically exempts manufacturers who sell vehicles to dealers from the requirements of executing odometer disclosure statements, manufacturers would not be required to retain any statements. 43 Fed. Reg. 18922 (1977) To clarify these apparently contradictory provisions, the modifying phrase 'who is required by this Part to execute an odometer disclosure statement' was added to the retention requirements following the words 'motor vehicle.' It was not the intent of the Agency by the insertion of this phrase to relieve dealers and distributors from the requirement of retaining odometer statements which they receive from a transferee.; Insurance companies and financial institutions also questioned th scope of the proposed regulation. The Agency noted that insurance companies and financial institutions do not fall within any of the exemptions set forth in 49 C.F.R. S 580.5 and that they must execute and retain odometer disclosure statements unless the transfers involve vehicles that are so badly damaged that they cannot be returned to the road. 43 Fed. Reg. 10922 (1978). The intent of this interpretation was to notify such institutions that they must retain all transferor odometer statements which they execute as well as all transferee odometer statements. I have enclosed a copy of the notice of proposed rulemaking (NPRM), the applicable comments and the final rule. Since the NPRM, we have not received any other correspondence concerning the retention requirement.; It is the Agency's interpretation that unless a dealer or distributo is exempt under 49 C.F.R. S580.5 from executing an odometer statement or unless he is transferring vehicles that are so badly damaged that they cannot be returned to the road, the dealer or distributor must retain both the statements issued to him and the statements he issued. The retention requirement affords the Government and aggrieved parties with the necessary documentation to prove a violation of the Act and to pinpoint exactly where the violation occurred.; If I can be of further assistance, do not hesitate to contact me. Sincerely, Erika Z. Jones, Chief Counsel