TITLE - TO - LIEN HOLDER AND ELECTRONIC TITLING COMING TO WISCONSIN BEGINNING JULY 1

WILLIAM SEPIC BULLETIN #9 President 6/18/2012 TITLE - TO - LIEN HOLDER AND ELECTRONIC TITLING COMING TO WISCONSIN BEGINNING JULY 1 Title-to-Lien Holder Ch 342.09(1)(b) Electronic Titles Will be Phased In Wisconsin will become a title-to-lien holder state effective July 1, 2012. All titles issued after July 1, 2012 will be issued to the lien holder rather than the vehicle owner. In electronic processing terms, a title is considered to be "issued" when the transaction is pended; therefore a transaction completed after July 1st with a June pended date will result in the title being issued to the vehicle owner. A transaction pended after July 1st will result in the title being issued to the lien holder regardless of the actual delivery date. Electronic Titles versus Electronic Processing Many dealers who are typically exempt from electronic processing, for example heavy truck dealers, may be think that electronic titling won't affect them. The fact is electronic titling is going to affect everyone. Electronic titling will be phased in over a period of time beginning July 1, 2012 with participating lien holders. A lien holder will be given the option of receiving either a paper title or an electronic confirmation of the title transaction and lien perfection (electronic title). Lien holders who choose electronic titles will no longer receive a paper title and will, instead, have access to the DMV's electronic record. Electronic titles will gradually become more common as lienholders opt-in to the program; therefore, dealers Included with this Bulletin: Attachment A - What Documentation is Required Attachment B - Revised MV2690 Power of Attorney Form with Instructions WATDA www.watda.org WATDA www.watda.org WATDA www.watda.org WATDA Pg 1

Heavy Truck, RV and Very Small Dealers May Want to Sign Up for Access to Vehicle Inquiries accepting vehicles in trade will need the following information. Is it a Wisconsin-titled vehicle? Was the title issued to the lien holder or the vehicle owner? Was a paper title issued? Typically dealers would get these questions answered by running an inquiry on their electronic processing system. Dealers who have no need to electronically process may choose to sign-up for an electronic processing system simply to have easy access to immediate title inquiry. A dealer may run an inquiry on a vehicle if the dealer reasonably expects to process that vehicle; therefore running an inquiry when the vehicle is appraised is a legitimate use of a dealer's electronic processing system. See Attached Decision Chart for Current Procedures Procedures will vary depending on the answers to the questions above. Your WATDA has developed a decision chart to assist dealers with determining what forms are required in which situations. Revised Power of Attorney Forms (MV2690) Will be Available Soon The MV2690 Power of Attorney Form that dealers currently use for vehicles titled out-of-state to lien holders has been revised. The new form should be available within the next few weeks. Dealers may choose to use up their existing inventory prior to changing to the new form. Note: The MV2690 is a secure odometer disclosure document and cannot legally be printed on plain paper. To be in compliance with state and federal laws, dealers who choose to use the secure form in laser format will need to obtain the appropriate secure stock. WATDASI Forms will have secure stock available for sale within the next few weeks. This Bulletin is incomplete. All written information will likely be incomplete for some time as the processes and programs are still being developed. The best resource for getting your questions answered is the WATDA Title & Registration Seminar. Sales Managers should attend the WATDA www.watda.org WATDA www.watda.org WATDA www.watda.org WATDA WATDA Bulletin #9 June 18, 2012 2

WATDA's Title & Registration Seminars Will Be the Best Place to Learn the Details visit www.watda.org/tr12 Wisconsin DMV Article for Vehicle Owners Laws of Vehicle Sales Seminars to learn about the changes as it impacts dealership's used vehicle departments. Note: The following articles are taken from Wisconsin DMV's website. They are included in this Bulletin so dealers know what is being made public - -or at least what was publish as of June 12. TITLE TO LIEN HOLDER FOR VEHICLE OWNERS On July 1, 2012, Wisconsin joins other states in becoming a title to lien holder (lender) state. This means that any title with a lien (loan) listed after July 1, 2012 will be sent to the lien holder rather than the owner. For vehicle owners: Wisconsin titles will be delivered to all lien holders: instate, out-of-state, lending institutions, and/or individuals who are listed as a secured party (lien holder) on the Wisconsin title. If you already have your title (even if it lists a lien holder), nothing changes. You can keep it. Titles will only be issued to lien holders after July 1, 2012. If you own a vehicle with a lien, you will receive a Confirmation of Ownership (form T056) document that contains the same information as the Wisconsin title sent to the lien holder. You will receive the title when the lien is paid off. If you need your Wisconsin title for any reason (before you pay off the lien), you will need to contact your lien holder directly. Advantages Title is held securely by the lender Fraud prevention and consumer protection Movement toward a paperless environment Electronic Records Records maintained by the Division of Motor Vehicles (DMV) are the official vehicle title records. The DMV maintains title information in an electronic format. Additionally, the DMV considers any record maintained in an electronic format to be the original and controlling record. Questions? Contact us: Call: (608) 266-1466 WATDA www.watda.org WATDA www.watda.org WATDA www.watda.org WATDA WATDA Bulletin #9 June 18, 2012 3

Wisconsin DMV Article for Motor Vehicle Dealers TITLE TO LIEN HOLDER - FOR DEALERS On July 1, 2012, Wisconsin joins other states in becoming a title to lien holder (lender) state. This means that any title with a lien (loan) listed after July 1, 2012 will be sent to the lien holder rather than the owner. For dealers: Any title with a lien (loan) listed after July 1, 2012 will be sent to the lien holder rather than the owner. Lien holders may choose to receive either paper or electronic titles. Wisconsin motor vehicle dealers may still take vehicles on trade without the customer having a physical title in hand. Wisconsin and federal odometer laws allow the use of a secured Power of Attorney when the title is held by the lien holder. [cite deleted] The Division of Motor Vehicles (DMV) will gradually publish more information on title to lien holder procedures. Selling Vehicles Throughout the transition and implementation of title to lien holder laws, dealers can put a vehicle for sale on the lot if all of the following are true: You possess proper odometer and title transfer documentation. All liens on the vehicle are paid. You have verified that the lien holder has the title. Electronic Verification of Vehicle Ownership When taking a vehicle in trade, dealers should verify that a customer s title is held by a lien holder. This can be done electronically whether the title is electronic or paper. All dealer processing systems, including vendors and emv11, will indicate whether the title is held by the lien holder. [Electronic title processing section removed from this Bulletin. It is available online at WATDA www.watda.org WATDA www.watda.org WATDA www.watda.org WATDA WATDA Bulletin #9 June 18, 2012 4

http://www.dot.wisconsin.gov/drivers/vehicles/title/lien holder/dealers.htm.] Wisconsin DMV Article for Lenders TITLE TO LIEN HOLDER - FOR LENDERS On July 1, 2012, Wisconsin joins other states in becoming a title to lien holder (lender) state. This means that any title with a lien (loan) listed after July 1, 2012 will be sent to the lien holder rather than the owner. For lenders: Any title with a lien (loan) listed after July 1, 2012 will be sent to the lien holder rather than the owner. As a lien holder, you may choose to receive either paper or electronic titles. Electronic title option You electronically exchange essential vehicle, lien and title information with the Division of Motor Vehicles (DMV) via an authorized service provider. This eliminates the need for printing, mailing and storing paper titles. The process is faster and more efficient for everyone involved. The process will be expanded to include electronic lien release before the end of 2012. You may choose to participate in the electronic title option using an approved service provider (third party) who works with DMV to provide a computer-based system to electronically record liens. Note: DMV is currently working out contract details with a number of service providers. More information on the electronic title option, a list of approved service providers and a user agreement for you will be available here later in June. Paper title option The DMV will print and mail a title to the first lien holder on the title record. The DMV will send subsequent lien holders on the title record a form TO84 Confirmation of Security (Lien) Perfection, as we do today. WATDA www.watda.org WATDA www.watda.org WATDA www.watda.org WATDA WATDA Bulletin #9 June 18, 2012 5

The first lien holder is required to hold the title until the lien is paid in full. Releasing liens Continue to release liens as you ve done in the past. Once you ve released the lien, DMV will issue a title to the owner or subsequent lien holder. There is no need to return the title to DMV; please destroy it once your lien has been released. This Bulletin was authored by: Wisconsin DMV, Sue Miller WATDA Bulletins are intended to help Wisconsin automobile & truck dealers to understand the activities of the Association as well as the laws that pertain to listed issues. Opinions and interpretations expressed in WATDA Bulletins are those of WATDA. These opinions and interpretations are intended to be general in nature and should not be used as a substitute for the advice of your own legal counsel or other professional counsel. General questions or comments regarding the subject matter of this WATDA Bulletin may be directed to its author or any member of the WATDA Team: William Sepic, President Susan Miller, VP Member Services Chris Snyder, Legal Counsel & Lobbyist Matt Lavold, VP Controller WATDA www.watda.org WATDA www.watda.org WATDA www.watda.org WATDA WATDA Bulletin #9 June 18, 2012 6

What Documentation is Required? Wisconsin or Out-of-State Titled Vehicle? Wisconsin title Out-of-State title Do you have the title? No Run and print an inquiry of the DMV's record Was the title issued to the vehicle owner? Yes Use the title for ownership transfer and odometer disclosure Do you have the title? No Was the title issued to the vehicle owner? No No Complete a secure MV2690 Power of Attorney form to record the ownership transfer and odometer disclosure and send the loan payoff to the lien holder. Yes Obtain a replacement title. Use the replacement title for ownership transfer and odometer disclosure Complete a secure MV2690 Power of Attorney form to record the ownership transfer and odometer disclosure and send the loan payoff to the lien holder to obtain the paper title. Are you selling the vehicle wholesale or retail? Has the paper title arrived? Wholesale Retail Yes Transfer ownership on the original title. Retail odometer disclosure may be made on the MV11 or the title. Wholesale odometer disclosure must be made on the original title. Include the original MV2690 Power of Attorney with the title paperwork. No Continued on page 2 You must provide the paper title to the purchasing dealer within 14 days of wholesale or auction sale. You must wait for the paper title before offering the vehicle for retail sale. Attachment A Page 1

Wisconsin Titled Vehicle, Title-to-Lien holder with MV2690 Power of Attorney form, no title in hand...continued Is the title electronic or paper? The inquiry you printed earlier will state whether the title is paper or electronic. Electronic Title After receiving payment the lienholder is required to electronically release the lien. After the lien is released, Wisconsin DMV will issue and mail a paper title to the vehicle owner. During phase 2 of the development (October 2012) the DMV will issue and mail the title to the lien holder-designated entity. Paper Title Lien holders are required to electronically release the lien. After the lien is released, Wisconsin DMV will issue and mail a paper title to the vehicle owner. During phase 2 of the development (October 2012) the DMV will issue and mail the title to the lien holder-designated entity. Note: The lienholder does not forward the paper title to anyone. If a dealer receives a paper title from a lienholder it would likely be an invalid title and could not be used for transfer. Are you selling the vehicle wholesale or retail? Are you selling the vehicle wholesale or retail? Wholesale Retail Wholesale Retail Run and print an Inquiry of DMV's electronic record at the time the vehicle is sold The selling dealer is required to provide the paper title to the purchasing dealer within 14 days of sale. Purchasing dealer must have the title before offering the vehicle for sale. Run and print an Inquiry of DMV's electronic record at the time the vehicle is sold Wisconsin dealers may offer Wisconsin lien holder-titled vehicles for sale without having the paper title in hand, provided the dealer has printed a copy of the Wisconsin electronic record and evidence that the loan was paid. The title transaction is processed normally at the dealership. If the paper title arrives before the transaction is complete, include it in the bundle. If the paper title has not arrived, include a copy of the inquiry printed at the time of sale. New paper titles for vehicles sold off an electronic record will be delayed until the lien holder releases its interest in the vehicle. Attachment A Page 2

Power of Attorney Vehicle Odometer Disclosure and Transfer of Ownership Wisconsin Department of Transportation MV2690 6/12 This form may be used only when Title is held by a lienholder. Federal and state law requires that you state the mileage in connection with the transfer of ownership. Failure to complete or providing a false statement may result in fines and/or imprisonment and may make you liable to the purchaser. Vehicle Information YEAR MAKE MODEL BODY TYPE VEHICLE IDENTIFICATION NUMBER VEHICLE CURRENTLY TITLED IN STATE OF: THIS VEHICLE WAS PREVIOUSLY: (Check all that apply) Privately Driven Demonstrator Police Vehicle Manufacturer Buyback Taxi Leased Business Vehicle Executive Driven Driver Education Government Vehicle Junked Rental Theft Recovery Flood Damaged Rebuilt Salvage Unknown Glider Kit Seller & Purchaser Information Print Seller's Name(s) Print Purchaser's Name Seller's Street Address Purchaser's Street Address Seller's City, State, Zip Code Purchaser's City, State, Zip Code Statement of Transfer and Odometer Disclosure I, as Seller, appoint the purchaser as my attorney-in-fact, to disclose the mileage for the vehicle described above, exactly as stated in my disclosure, and to transfer my interest in the vehicle described above. I further certify that to the best of my knowledge the information contained on this document is true and correct and that I have entered the vehicle odometer reading below in compliance with Federal and State law. Exempt from odometer disclosure because vehicle is: 10 or more model years old ODOMETER NOW READS (no Tenths): X Seller's Signature and Date Gross vehicle weight rating exceeds 16,000 lbs. and to the best of my knowledge is the actual mileage of this vehicle unless one of the following statements is checked: The odometer reading reflects the amount of mileage in excess of its mechanical limits. The odometer reading is NOT the actual mileage - WARNING ODOMETER DISCREPANCY. X Purchaser's Signature and Date Print Name of Seller X Seller's Signature and Date Print Name of Purchaser Print Name of Seller Person Exercising Power of Attorney (Certifier) Seller's appointed Power of Attorney (Certifier) completes this section once the purchaser receives either the original title or legal access to the electronic title record. Print Name of Person Exercising Power of Attorney (Certifier) Certifier's Street Address Certifier's City, State Zip Code I certify that I have received and reviewed the title for the vehicle described above and that there are no indications of mileage discrepancies. X Signature of Person Exercising above Powers of Attorney IF RETAILED - Send original to DMV with title transfer imaging paperwork. IF WHOLESALED - Transfer mileage to original title and keep original MV2690 with original title. Seller and Purchaser: Retain a copy for your records. Attachment B Page1 Date

MV2690, Power Of Attorney 6/12 Revision MV 2690, Power of Attorney was first issued in 1989. All versions of this form are conforming. This form has only one purpose. When the Certificate of Title for a vehicle is held by the lien holder, the owner gives power-ofattorney to the dealer on this form, so the dealer can execute the odometer disclosure statement on behalf of the owner when the title is received from the lien holder. The Vehicle Information, Seller & Purchaser Information and Statement of Transfer and Odometer Disclosure are completed by the seller of the vehicle and the dealer taking possession of the vehicle at the time the dealer takes the vehicle in trade. Vehicle Information 1. Enter the year, make, model and body type of the vehicle. 2. Enter the identification number of the vehicle. 3. Enter the state where the vehicle is currently titled. 4. Check all boxes that apply to the prior use of the vehicle. Seller & Purchaser Information 1. PRINT the name of the titled owner (seller). 2. Enter the address of the seller. 3. Enter the city, state and zip code of the seller. 4. PRINT the name of the purchaser to who power of attorney is being given. This is typically the motor vehicle dealer accepting the vehicle in trade. 5. Enter the address of the purchaser. 6. Enter the city, state and zip code of the purchaser. Statement of Transfer and Odometer Disclosure The odometer disclosure part of the form is completed by the seller of the vehicle and the dealer taking possession of the vehicle at the time the vehicle is traded-in. 1. Seller enters the reading from the vehicle s odometer and checks the appropriate certification box. Note: Dealers should NOT complete the odometer portion of the MV2690. 2. Instruct all registered owners to sign in the Signature section as Seller(s). 3. HAND PRINT the name of the seller(s). 4. An individual at the dealership serves as the Power of Attorney and dealership representative. That individual signs as the Purchaser. 5. HAND PRINT the name of the Purchaser. Attachment B Page2

Person Exercising Power of Attorney (Certifier) The bottom part of the form is completed by the Purchaser after receiving the title. At that time the odometer disclosure information and assignment of ownership is transferred from the Power of Attorney form to the title. 16. PRINT the name of the Purchaser completing the certificate on the title on behalf of the seller. This person does not need to be the same person who signed on behalf of the purchaser in the Statement of Transfer and Odometer Disclosure section. 17. Enter the purchaser's street address. 18. Enter the purchaser's city, state and zip code. 19. Sign as the purchaser's authorized representative completing the certification on the title on behalf of the seller and the date of the certification. 20. When completing the title on behalf of the seller, sign as follows: [Seller's Name] by [Your Name], POA. Attachment B Page 3