{"id":823,"date":"2015-06-02T15:15:43","date_gmt":"2015-06-02T20:15:43","guid":{"rendered":"http:\/\/efgintelligence.com\/dealershipcorridor\/?p=823"},"modified":"2016-01-21T15:46:00","modified_gmt":"2016-01-21T21:46:00","slug":"rolling-times","status":"publish","type":"post","link":"https:\/\/efgintelligence.com\/dealershipcorridor\/rolling-times\/","title":{"rendered":"Rolling with the Times!"},"content":{"rendered":"

\"Karen<\/a><\/p>\n

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Contributing Author: Karen Klees, Certified Consumer Credit Compliance Specialist, EFG Companies<\/h3>\n

Recently, U.S. Bank issued a letter to its dealer partners describing the Bank\u2019s policy in regards to fair and responsible lending. Well, that in itself is not news. Lenders have been issuing letters of that nature for the past few years. However, this letter did mark a significant milestone in the CFPB\u2019s regulation of the automotive industry. In this letter, U.S. Bank became the first lender to explain a monitoring program with a heavy focus on how F&I products are priced and sold.<\/strong><\/p>\n

To date, dealers have had substantial leeway with F&I pricing practices. The only minor cap dealers have as far as marking up products is concerned, is how much money lenders are willing to fund. So, it\u2019s natural for dealers to pucker when a lender like U.S. bank says they are watching for potential discriminatory practices in F&I.<\/p>\n

However, from a lender standpoint, U.S. Bank is taking proactive steps to protect itself before any regulatory decisions are made. And, it\u2019s possible that other lending institutions may follow suit, especially those who\u2019ve already felt the influence of the CFPB.<\/strong><\/p>\n

As a dealer, you could simply say \u201cGood Riddance!\u201d to any lender who tries to restrict F&I product markup. However, you could be losing quality lenders in the process. And, then there\u2019s the potential eventuality that the CFPB will have all lenders monitor F&I product pricing. Rather than purely reacting, a better option might be to begin the process of preparing your dealership now for industry trends that could impact your business.<\/strong> <\/p>\n

This starts by reviewing your pricing models to ensure they are:<\/p>\n