MNLARS problems leave St. Paul car dealership battling banks

(KMSP) - Behind the savvy smile he's shared with customers for the past eight years, Ben Footh of Footh Auto Sales  in South St. Paul is stressed about the business he's built for his family and his six employees.

“This is a list of all the vehicles that are going to have to be bought back,” Footh said.

Footh said the banks he works with typically give about 60 days to prove they are the lien holders for cars they've helped finance for customers. But flaws with the new Minnesota Licensing and Registration System have left lenders waiting for that all important lien card, and Footh just three days away from being forced to buy back his first loan at close to $9,000.
               
“The snowball effect of this, it could be bad,” Footh said. “Several hundred thousand dollars for a big franchise dealer might be the stroke of a pen... for me, this could be detrimental to my business.”

“These problems are going to mount. This is going to get worse,” said Scott Lampert, president of the Minnesota Auto Dealers Association. MADA doesn't represent used car dealerships, but Lambert calls this a natural evolution of the growing problems all dealerships are waiting for the state to fix.

“We've been waiting for the banks to show up into this controversy because they are under strict regulatory guidelines for how they conduct their business, and we understand that," he said. "But we can't produce what we can't produce."

Lambert and Footh brace for customers being effected next in a variety of ways, from having to start the financing process all over again, to potential complications when a car is sold again.
               
“Consumers are going to feeling the brunt of this, probably for years when this is over,” said Lambert. “I bet when the legislature opens in February we are still talking about this. I don't see how they are going to fix this anytime soon.”

A spokesperson from the Department of Public Safety said there was "a problem printing lien cards, but that issue has been fixed. The cards are being printed and mailed as quickly as possible. They will be caught up within the next two weeks."

If any dealer is having an issue with a transaction, they are asked to contact DVS Dealer Unit at dvs.dealerquestion@state.mn.us.

UPDATE: Since this story aired, Footh received an email from the primary bank he works with. The email stated that they will halt all buy backs until the MNLARS system is corrected.