Virginia Dealer Board rejects special assessment

Virginia Dealer Board rejects special assessment

The Virginia Motor Vehicle Dealer Board (MVDB) has rejected a special assessment on dealers to rebuild the Transaction Recovery Fund, which is perilously close to the statutory mandated minimum of $250,000, according to MVDB director Bruce Gould. Gould said the laws mandate of at least $250,000 means there are virtually no funds available for use.

MVDB discussed the potential for a special assessment of dealers across the Commonwealth to increase the fund at its last meeting, but in the end rejected the idea. Instead, the Board said it will lend assistance to a legislative solution during the 2012 session of the General Assembly to accomplish the recommendations of a special work group that has been evaluating changes to the Transaction Recovery Fund.

That work group recently recommended that legislation be pursued to (1) increase the maximum recovery for any claim on the Transaction Recovery Fund to $25,000 with an annual increase based on the cost of living; (2) establish a maximum recovery with respect to any one dealer of four times the individual maximum recovery; (3) ensure that dealer bonds pay for attorneys fees since demands for attorneys fees now go through the Transaction Recovery Fund even when a bond pays for a loss; and, (4) take care that the minimum balance requirement of $250,000 in the fund be removed.

The Virginia Motor Vehicle Transaction Recovery Fund was established to reimburse persons who have suffered loss or damage in connection with the purchase or lease of a motor vehicle due to illegal actions of licensed or registered motor vehicle dealers or salespersons.

Over the last decade, the Commonwealth of Virginia has taken almost $5 million from the Transaction Recovery Fund to help offset shortfalls from the governments general operations.