As expected, in lieu of a centralized regulatory framework under the second Trump administration, states are ramping up a patchwork of more assertive oversight on automotive F&I products.
Colorado is among the latest to add complexity and burdensome requirements by expecting lenders to provide full copies of product records when requested. After the state’s revised recordkeeping rule, which includes tightened documentation requirements for GAP waivers, went into effect Feb. 1, 2025, F&I Sentinel answered inquiries from our lender partners on how to adapt processes to meet these new requirements.
Lenders that do not actively track and prepare for these state-level changes risk being caught unprepared. And, without proper document storage and retrieval processes in place, Colorado’s requirements will cost lenders significant labor hours tracking down the right data and increase financial and reputational risk.
The Colorado Rule and GAP Waivers
The revised rule requires licensed creditors to maintain 23 distinct record categories – ranging from advertising and credit applications to detailed loan-level payment histories – in formats readily accessible to the state’s Administrator.
To meet these requirements, lenders must maintain or make available:
- Copies of GAP waivers funded
- Agreements with GAP waiver administrators
- Records of the purchase price of GAP waivers funded
- Records of refunds provided
- Records of benefits (claims filed) provided and any deductions
While the rule is onerous, lenders leveraging F&I Sentinel’s Managed Originations solution powered by CITADEL already have access to tools that will assist them in satisfying these new requirements. Specifically, F&I Sentinel’s product form repository in CITADEL and the Product Submission Agreement* (PSA) handle the heavy lifting for our lender partners in the following ways.
*PSAs are executed by the F&I product company in favor of lenders that leverage our Managed Originations solution. PSA copies are stored in CITADEL.
Lenders Leveraging F&I Sentinel’s Managed Originations Solution Powered by CITADEL
| Copies of GAP waivers funded | Lenders have access to full copies of funded GAP waiver forms in the CITADEL repository. For those not found in the repository, F&I Sentinel can obtain the waivers for lenders because the PSA requires product companies to share historically funded forms and promptly respond to F&I Sentinel’s request on behalf of our lenders. |
| Agreements with GAP waiver administrators | Most lenders don’t have agreements with product companies beyond the GAP waiver itself. Regulators appreciate the presence of a PSA, which drives product company behavior and responsiveness. The fully executed PSA is available in CITADEL and our technology team can assist with special projects for bulk requests, as needed. |
| Records of fees received | Most lenders don’t have agreements with product companies beyond the GAP waiver itself. Regulators appreciate the presence of a PSA, which drives product company behavior and responsiveness. The fully executed PSA is available in CITADEL, and our technology team can assist with special projects for bulk requests, as needed. |
| Records of refunds provided | Captured through cancellation notices and our Managed Cancellations solution through refund quotes provided via the GAP waiver administrator or through our FAIRRCalc quote engine. Some of our lender partners that debit the dealer reserve and refund consumers directly are able to provide evidence that the consumer was credited based on the quote. |
| Records of benefits and deductions | This item appears to be in reference to the GAP waiver purchase price, which would be captured on the finance agreement and the loan origination system. |
F&I Sentinel: Your Partner For Reliable Data Retrieval
Ultimately, how a lender meets more stringent state requirements depends on whether they’ve put tools in place to drive product company responsiveness or if they’re relying on goodwill alone.
Do you have questions on how to prepare your organization for increasing demands for F&I product documentation and retrievable data? Please contact us to learn more about how F&I Sentinel’s Managed Originations solution can protect your business and provide the peace of mind you need.
About F&I Sentinel
F&I Sentinel is the industry’s trusted provider of managed compliance solutions – from funding to servicing to refunds. With a repository of more than 120,000 F&I product forms, our tech-enabled Concierge Compliance Team helps auto lenders navigate the regulatory landscape surrounding the financing and resolution of voluntary protection products. Schedule a no-obligation meeting with a member of our Concierge Compliance team today.
The information provided in this post does not, and is not intended to, constitute legal advice; instead, all information, content, and materials referenced are for general informational purposes only. Readers should contact their attorney to obtain advice with respect to any particular legal matter.
