Tag: Consumer Financial Protection Bureau

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Featured

EFG Companies and Northwood University Announce F&I Innovator of the Year Competition

Program to act as rallying cry for greater F&I innovation in the retail automotive space

EFG Companies, the innovator behind the award-winning Hyundai Assurance program, together with Northwood University, today announced an F&I competition designed to jolt the automotive industry into a higher standard of innovation.

The F&I Innovator of the Year Award, to be held annually, will pit six teams of Northwood’s junior and senior undergraduate automotive marketing and management students against one another to conceptualize and build a new F&I product while earning course credit.  A panel of leading dealer principals, EFG executives, and Northwood’s automotive program educators will judge each team’s business case in November.  EFG Companies will award the winning team $25,000, and, more importantly, will develop the winning F&I product for the retail automotive marketplace.  The company will also return a percentage of the product’s revenues to Northwood University.

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Compliance

The Supreme Court Upholds Disparate Impact. Now What?

Contributing Author: John Stephens

 

Contributing Author: John Stephens, Senior Vice President, Dealer Services, EFG Companies

Last month was a big month for the CFPB. The Supreme Court of the United States held in the case of Texas Department of Housing and Community Affairs et al. v. Inclusive Communities Project, Inc., that “disparate-impact claims are cognizable under the Fair Housing Act.” The CFPB established their Larger Participant Rule, putting captive finance companies under their jurisdiction. And, BB&T announced the launch of a nondiscretionary dealer compensation program that prohibits dealer markup and offers a flat-fee dealer compensation program.

Right now, you can’t read the news without seeing an article about the CFPB and speculation on what the industry will look like in the coming months. Rumors abound that three captives currently under CFPB investigation, Honda, Nissan and Toyota, will cap dealer markup.

Just recently, Honda Finance Corporation reached a resolution with the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ), where it agreed to change its pricing and compensation system to “substantially reduce dealer discretion and minimize the risks of discrimination,” and to pay $24 million in restitution to affected minority borrowers. While the jury is still out on Nissan and Toyota, lenders have a unique opportunity to take advantage of all this activity.

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Compliance F&I

Are You In Control of Your Profit Potential?

Karen Klees, Certified Consumer Credit Compliance Professional, EFG Companies

 

Contributing Author: Karen Klees, Certified Consumer Credit Compliance Professional, EFG Companies

If you’ve been paying attention to industry news, you probably know about the Federal Trade Commission once again setting its sights on add-on products. While large industry players expected this on the heels of the CFPB’s increased oversight into auto lending practices, many dealerships looking to make up for lost dealer reserve with the sale of F&I products are looking to tighten up their policies and procedures.

If you haven’t already begun re-evaluating your compliance procedures, now is the perfect time! While there are many elements to consider as you review your current policies and procedures for your existing product offerings, there is an upside. When sold in a compliant manner, F&I products provide dealers the ultimate control in their profit potential.

This being said, applying compliance standards and scrutiny to your policies and procedures is growing in importance.  A recommended starting point, as you evaluate your product offering, is to ask a simple question:  Do your products’ benefits fulfill a real and mathematically calculable customer need? 

Starting with this premise, here is a checklist to perform due diligence:

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