The executives of two of the top 30 auto financiers in the U.S. offered up guidance to industry veterans and those just entering the business. Auto Finance Excellence spoke with Westlake Financial Services President Ian Anderson and SunTrust Banks’ head of indirect lending, Chuck Jones, who, together, carry 60 years of industry experience.

Advice for new hires:

Entering the highly competitive and complex trade of auto finance can be a daunting experience. Anderson’s advice to those fresh in the industry is simple: “Show up 15 minutes early and stay 15 minutes late.”

Additionally, he advises new hires to be well-versed in data and to be active in technical applications, such as Microsoft Excel. In fact, Westlake’s ability to analyze data and make decisions quickly is one of the main reasons why the lender has grown its portfolio 40% year over year, Anderson said. The management team — starting at the director level up to company Founder and Chairman Don Hankey — know how to use Excel from an analysis perspective, he said.

SunTrust’s Jones, on the other hand, advises reinventing yourself every few years. “Take on new opportunities, and don’t be uncomfortable with what you’re doing,” he said.

In his 38-year tenure, Jones has had 22 career moves. For example, he served as a correctional officer at the Texas Department of Corrections and as an agriculture loan officer — to name a few roles. “Try to find something else to continue to learn and grow because you get greater opportunities that way,” he said.

Advice to industry leaders:

For those familiar with the industry, the advice from Anderson and Jones is straightforward but sometimes overlooked.

“This is a commoditized industry, and because of that, you have to constantly be looking at the bottom line by controlling your costs and losses,” Anderson said. You have to have the ability to pay your banks back. I know it sounds pretty basic, but I don’t think many people look at it as basic as it needs to be,” he added.

For Jones, the advice involves self-awareness: “Really stress your business. Be willing to walk away from segments that are performing poorly,” he said. Also, remember quality outshines quantity and never get too “focused on just the volume that you’re doing…make sure you have the right risk rewards in it,” he explained.

Source link

Financial Solutions

Automakers struggling to clear inventory of older models from U.S. dealerships probably will offer richer discounts to consumers this month than ever before, according to J.D. Power.

Incentive spending likely will rise 12% to $4,538 per vehicle in November, the market researcher estimated Wednesday, exceeding $4,500 for the first time. The growth in automakers’ outlays to entice consumers is outpacing transaction-price inflation, J.D. Power said.

Car companies typically boost incentives from November to December by roughly 4%, so spending could be headed further into “unprecedented territory,” Thomas King, the vice president of J.D. Power’s data and analytics division, said in a statement. He called the trend “concerning for the health of the industry.”

J.D. Power projects total light-vehicle sales will run at an adjusted annualized rate of 17.5 million in November, a slight improvement from 17.4 million a year ago. The researcher expects industry deliveries to drop to 16.8 million in 2020, from about 17.1 million this year.

—Craig Trudell (Bloomberg)

Source link

Financial Solutions

Source link

Financial Solutions

Source link

Financial Solutions

Wells Fargo & Co. and National General Insurance Co. have agreed to pay $432 million to resolve claims the companies engaged in an unlawful insurance scheme — an increase compared with a June 6 court filing that proposed a $393.5 million settlement. 

In the proposed class-action settlement, Wells Fargo agreed to pay $386 million, with National General paying $7.5 million. However, the new development may change the amount Wells Fargo and National General will pay individually. 

According to the class action, both companies engaged in an “unlawful scheme to force millions of Wells Fargo auto loan customers to pay for unnecessary and unwanted Collateral Protection Insurance.” Wells Fargo’s original settlement, according to a remediation plan, was proposed at $64 million. 

“Reaching this agreement, which leverages remedies available in our existing remediation plan, is an important step in making things right for customers impacted by this issue,” Wells Fargo said in a statement provided to AFN. “We will continue sending individualized letters to customers that clearly set out the remediation amount due to them, as well as a check for that amount. This process will continue until the remediation is complete.”

Click here to read how the scheme played out, according to the filing. 

Source link

Financial Solutions

Source link

Financial Solutions

A hyper-connected society has come to expect near-instantaneous business transactions. Whether it’s an Amazon purchase, concert tickets or a flight to London, consumers expect a quick, efficient experience. Although auto lending is more complicated than those purchases, lenders can leverage the latest technologies to deliver similar efficiency.

Many lenders have optimized loan application and underwriting processes. However, efficiency meets a roadblock at the funding stage. The digital process reverts to paper — printing, mailing, faxing and ink signatures bog down productivity.

In a competitive auto lending market where consumers have multiple sources of funding, decisioning speed shouldn’t be compromised by an inefficient funding process. Why frustrate a well-qualified applicant who is offered a risk-priced deal with a complicated, protracted funding process?

Lenders can eliminate funding process inefficiency through the use of e-contracts and e-signatures. Using relevant applicant information, loan terms and stipulations or required disclosures, e-contracting produces a digital contract in seconds and sends it electronically to applicants. E-contracts meet the expectations of millennials and market segments of all generations who expect a completely digital consumer experience. Convenience and security contribute significantly to a positive experience, giving consumers:

• Multiple methods to record e-signatures, including typed text, image uploading, voice recording or use of popular signature devices;

• Multiple identity authentication methods, including an email/security code, SMS text PIN delivery and knowledge-based authentication questions; and

• Support for multiple signers and signatures to ensure proper routing, sequencing and capture in the case of co-signers, stipulations or validations.

Lenders benefit from e-contracts and e-signatures, too. Lower processing costs, increased customer satisfaction and efficient document retention are enabled by:

• The ability to review and sign contracts via desktop computer or mobile device, which improves the likelihood of loan capture;

• Ensuring all documents have been properly reviewed and signed, which eliminates delays; and

• Eliminating paper storage costs by securely managing digital documents and records associated with the transaction.

Lenders should take care to avoid undermining success of rapid, consistent-quality lending decisions with an inefficient funding process. E-contracts facilitate a funding process that meets the “on-demand” expectations of today’s consumers and delivers cost savings.

With more than 20 years’ experience in the auto finance industry, Lana Johnson leads the charge to drive innovation as chief client officer at defi SOLUTIONS. defi SOLUTIONS is the Technology Partner of Auto Finance Excellence (AutoFinanceExcellence.org), a sister service of Auto Finance News.

Source link

Financial Solutions

The California Consumer Protection Act (CCPA) goes into effect in January, and although California Attorney General Xavier Becerra has said his office won’t enforce the law until July, lenders should start preparing now, said Michael Benoit, partner at Hudson Cook. One important aspect of that preparation is understanding how exemptions in the Gramm-Leach-Blilley Act (GLBA) overflow into the CCPA.

The GLBA “requires financial institutions – companies that offer consumers financial products or services like loans, financial or investment advice, or insurance – to explain their information-sharing practices to their customers and to safeguard sensitive data,” according to the Federal Trade Commission’s website.

Lenders are exempt from the CCPA if the information that is collected, processed, sold or disclosed falls under the GLBA, Benoit said. “For finance companies, you are subject to the Gramm-Leach-Blilley privacy act rule, so there’s a major exemption, but it does not attach in a way that makes [financiers] completely immune to the bill,” he said, noting that lenders can take advantage of the exemption because of their status as financial institutions.

Further, if a lender obtains personal information – as defined in the CCPA – in order to deliver a financial product or service, that data could fall under the GLBA exemption, Benoit said. “If you provide GLBA-regulated data to a third party as GLBA permits, that data is still covered by this exemption.”

The GLBA exemption, however, doesn’t cover data breaches when consumers have the right to sue, Benoit said.

Source link

Financial Solutions

Source link

Financial Solutions

Source link

Financial Solutions