N.D. car dealers adapt to child support lien lawFARGO — A new North Dakota law designed to capture unpaid child support appears to be working, although some question whether it places an unfair burden on car dealers.
By: By Dave Olson, Forum Communications Co., The Jamestown Sun
FARGO — A new North Dakota law designed to capture unpaid child support appears to be working, although some question whether it places an unfair burden on car dealers.
The law created a child support lien registry that began March 1 as an online listing of all parents in North Dakota who owe child support that is being collected by the state.
A lien is automatically created on real estate and titled property owned by those on the list, including vehicles of all kinds.
Dealers are required to check the registry’s interactive website anytime someone presents a car or other vehicle as a trade-in.
For the vehicle to receive a clear title, the unpaid child support must be paid, either by the person owing the support, or as part of the transaction.
Critics say the law unfairly turns dealers into child support enforcement officers and increases the chances that a customer with a vehicle to trade in will take their business to a neighboring state.
While the latter has been raised as a concern, it doesn’t appear to be happening, said Jim Fleming, director of the Child Support Enforcement Division of the North Dakota Department of Human Services. He said no such reports have yet reached his ears.
Fleming said his office received a lot of questions from dealers when the law first took effect, but as the weeks have passed, “it’s really gotten to be pretty quiet.”
He added that while it’s hard to gauge the extent to which the registry has or hasn’t boosted collections, some facts may speak for themselves.
This past month, the state collected $12.2 million in child support, compared to $11.3 million for the same period last year.
“February was one of our largest months that we’ve ever had for total collection,” Fleming said.
“One could guess some of that had to do with some outreach we’ve done with employers in the area of income withholding, but I think some of it was also because of people wanting to pay to avoid the lien registry,” he said.
At least one Fargo dealership has had no problems with the registry.
“No, not at all,” said Victor Peterson, general sales manager at Corwin Honda.
Peterson said that for those who are in arrears on child support, purchasing a car can be difficult for several reasons.
“Generally speaking, if they’re behind on child support and taking out a loan or something, then the lenders don’t give them a loan anyway,” Peterson said.
If a dealership buys a vehicle without checking the registry for the existence of a lien, it won’t necessarily run afoul of the law, Fleming said.
“It (the law) gives us some room to work with dealers to not punish them for innocent mistakes,” he said, adding that state officials are working with the Automobile Dealers Association of North Dakota to resolve any difficulties the law may cause.
Fleming said a task force that helped with the law’s wording was comprised of child support advocates and business interests, and a lot of time was spent “discussing how we can improve child support enforcement without grinding commerce to a halt.”
He said the registry shouldn’t be an issue for a private party who buys a used car because the law includes an exception for a good-faith purchaser.
“Someone who is not in the business of buying and selling cars and thus would have no reason to know about this, I don’t know that child support would ever be able to prove they knew about the registry,” Fleming said.
State records show that about 22,000 parents owed more than $291 million in support at the end of 2011.
While the numbers are large, Fleming said it’s important to keep other numbers in mind.
“Nearly 75 percent of the support that is due every month is paid in full and on time. That’s the untold story about child support in North Dakota,” he said.
Dave Olson is a reporter at The Forum of Fargo-Moorhead, which is owned by Forum Communications Co.