NMVTIS Reporting Enforcement Update
For recyclers across the United States, the junk and salvage reporting requirements from the National Motor Vehicle Title Information System (NMVTIS) reached the three year mark this spring. During those three years, the NMVTIS database has grown significantly as more and more states and business entities have begun providing data. Currently containing over 38.9 million junk, salvage and insurance records, the system has become a vital tool for law enforcement, state DMVs and consumers.
One common complaint ADD hears about NMVTIS is the enforcement- or the lack of it. Many businesses point out that they have been reporting for years, yet some of their competitors have not, and have yet to be penalized. People are justifiably upset that they are putting in the work to stay compliant, and they are frustrated to know that others are skipping out on the requirement.
Some newly-available information may help the compliant businesses feel better about their reporting efforts. It was announced at the last NMVTIS advisory board meeting that the Department of Justice is in the midst of a NMVTIS enforcement initiative that has resulted in pending penalties for around a half dozen businesses ranging from $43,000 to almost $2,800,000. NMVTIS penalties are determined by a number of factors, including the size of the business, how large the number of unreported vehicles, and whether or not the business has made an effort to comply with the regulations. Other mitigating factors include the business' openness in responding to DOJ requests for information, the length of time vehicles have been unreported and whether non-reporting was caused by "intentional inaction." The pending cases involve civil penalties, and more details will be publicly available once all penalties are finalized.
Even with this new enforcement effort, many businesses may feel that starting to report now will put them on the DOJ "radar" and invite penalties, but if anything, the opposite is true. The way NMVTIS reporting is designed, each vehicle record submitted makes one link in a chain of reports that follow the vehicle as it passes from business to business. Each business reports from whom they obtained a vehicle, and then where it went after, linking one report to the next. If the DOJ sees that an insurance company transferred a vehicle to a salvage pool, and the salvage pool sold it to a particular recycler, but then the recycler didn't report the car, there's a big red arrow, pointing right at the non-complaint recycler. It is very easy to determine "non-reporters" simply by checking the "obtained from" and "transferred to" information from reporting companies.
The NMVTIS database is a powerful national tool that can be beneficial to states, law enforcement and the individual business entities. The information collected clearly shows how big an issue there is with illegal and unlicensed operators, and provides a way to easily identify such businesses. NMVTIS data is also very useful in estimating just how many junk/salvage vehicles are being exported to other countries.
Businesses who think they can "hide" by not reporting couldn't be more wrong. For those businesses who have been reporting and supporting NMVTIS all along, keep up the good work and be patient! At a federal level things may seem to be moving slowly, but enforcement is gaining steam and the database is proving to be beneficial to the US recycling industry, now and in the future.