Pence calls for more transparency amid questions about BMV convenience fees

Gov. Mike Pence is calling for greater transparency after an Indianapolis Star investigation that raised questions about the legality of so-called convenience fees that the Indiana Bureau of Motor Vehicles allows private companies to charge for title and registration services.

“I think that there is now an argument for greater transparency in convenience fees,” he said Tuesday. “We certainly want the public to know that if you’re using an off-site Bureau of Motor Vehicles service that there is an additional fee associated with that. We’re looking into how we can make sure the public knows about that. And I would expect that will be debated and considered in a comprehensive legislative proposal that will be considered in the coming session of the General Assembly.”

The governor’s comments came after a Star investigation published Sunday revealed that a top BMV official — former Chief of Staff Shawn Walters — encouraged the use of the fees, then went to work for one of the BMV contractors that benefited from them without seeking an opinion from the State Ethics Commission.

The fees can double or triple the cost of the same transaction at a BMV license branch. Auto dealers are among the private contractor’s largest customers and often pass the fees on to car buyers.

The Star’s story also raised questions about whether the fees, which the BMV has allowed for years, were legal. Not until April did state lawmakers pass a law explicitly allowing them.

When asked whether the fees were legal before this year, Pence said he “would leave that to the experts.”

“I have no sense that it was not authorized by the law,” he said. “But it seems to me that at least the initial look for us is that it is an issue of transparency.”

The governor’s spokeswoman, Kara Brooks, said Pence doesn’t have enough facts to know whether Walters violated state ethics law.

Rep. Dan Forestal, ranking minority member of the House Roads and Transportation Committee, said the governor’s call for greater transparency is a good step but doesn’t go far enough.

“He signed a bill into law that codified into statute a fee that was questionable at best and that was being collected by a private company before they had the authority to do so,” said Forestal, D-Indianapolis. “I think the only way to fix that is to repeal that part of the law.”

It wouldn’t be the first time the BMV overcharged Hoosier motorists. A class-action lawsuit filed in 2013 resulted in the BMV refunding $30 million to motorists for higher-than-allowed operator license fees. Since then, the BMV has refunded another $30 million in other overcharges. And a second, pending lawsuit seeks to recoup up to $40 million in additional overcharges.

A Star investigation published in March found that top BMV officials — including Walters — knew about some of those fee problems for years but chose to ignore or cover up the overcharges rather than refund the extra money and adjust to significant budget losses. Another Star investigation showed lingering vestiges of a political patronage system used to hire top officials of the agency.

The convenience fees were not part of either lawsuit. BMV officials say they have no idea how much money private contractors have charged customers in convenience fees. But the potential charges are great.

The contractors have handled more than a million title and registration transactions for the BMV during the past 18 months alone.

Call Star reporter Tony Cook at (317) 444-6081. Follow him on Twitter: @indystartony.