Categories
Business Growth

Closing the Relationship Gap

Brien Joyce Vice President EFG Companies
Contributing Author:
Brien Joyce
Vice President
EFG Companies

According to The Center for Generational Kinetics, Millennials are now the largest generation in the U.S. workforce, and the fastest-growing generation of customers in the marketplace. Though their numbers are strong, their financial situations are not. While there are certainly exceptions, Millennials are launching their lives later, often strapped with burdensome student loan or other debt, with lower or missing FICO scores, and a history of postponing large financial purchases. Couple these challenges with Millennials’ demand for high tech/low touch encounters and auto lenders have their work cut out for them.

As the Internet has grown up, so have Millennials. This means that as the Internet became more sophisticated, providing immediate access to everything from encyclopedias to fast food delivery, this demographic has become accustomed to immediate gratification through impersonal communication.

In addition, this generation has the greatest level of student loan debt in the country’s history, and it’s rising because wages have been stagnant for several years. According to the Project on Student Debt, 68 percent of 2015 bachelor’s degree recipients graduated with an average student loan debt of $30,100 per borrower. The debt load not only affects the amount of savings they have for purchases and down payments, it also greatly impacts their credit scores.

This is one of the biggest reasons why Millennials have put off the milestones of adulthood. They simply can’t afford to move out of their parents’ homes, buy cars, get married, buy houses, and have children.  Saddled with debt yet striving for success, Millennials also face another challenge. According to a PwC survey, only 24 percent of Millennials surveyed could demonstrate basic financial literacy. In another survey of Millennials already saving for retirement, a third said they were “not sure” how their money was invested. Not knowing the nuts and bolts of money matters can hurt Millennials’ personal financial prospects – as well as their ability to successfully negotiate loan terms for a car purchase.

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Categories
Business Growth

Get a Jump on that Loan

Brien Joyce Vice President EFG Companies
Contributing Author:
Brien Joyce
Vice President
EFG Companies

I admit it. I fell victim to Amazon Prime Day. However, I still stuck to my guns and completed my due diligence for every purchase. For me, that included researching the price on multiple sites, checking out customer reviews and ratings, and reading the small print on the product description.

I’m not alone in my habits. An Ernst & Young study showed that more than two-thirds of customers now spend less than 10 hours to research their vehicle purchase – down from 15 hours in 2016. This same study showed that consumers spend more time online researching a vehicle than any other online purchase!

In fact, a recent Cox Automotive study found that 43 percent of consumers want to apply for financing or pre-qualify for a loan online. Furthermore, the amount of time spent completing a car purchase is the primary complaint for consumers. Less than half of the car-buyers surveyed were satisfied with the length of the car buying process.

How frequently do your customers contact your financial institution to pre-qualify for an auto loan? Have you run the numbers on your conversion rates between website page views, completed applications, and actual loans finalized? How often do consumers “shop” your site for auto loan rates? If you don’t have the answers to these questions, it’s likely you are losing money on your digital footprint.  Let’s look at some of the areas you should track and manage.

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Categories
Compliance

We’ve Been Down this Path

Steve Roennau Vice President Compliance EFG Companies
Contributing Author:
Steve Roennau
Vice President
Compliance
EFG Companies

The Consumer Financial Protection Bureau (CFPB) has been in the news a lot lately.

From Acting Director Mick Mulvany’s decommissioning of the Advisory Committee, to a federal district judge ruling its structure is unconstitutional, some might think that the CFPB’s days are numbered.

But history has a lesson to offer, compliments of the Federal Trade Commission (FTC). The FTC was created on September 26, 1914, when President Woodrow Wilson signed the Federal Trade Commission Act into law. The regulatory agency opened its doors in 1915, with a mission to protect consumers and promote competition. The FTC building was finished in 1938, with President Franklin D. Roosevelt stating, “May this permanent home of the Federal Trade Commission stand for all time as a symbol of the purpose of the government to insist on a greater application of the golden rule to conduct the corporation and business enterprises in their relationship to the body politic.”

Currently, the FTC houses three bureaus:

  1. the Bureau of Consumer Protection
  2. the Bureau of Competition
  3. the Bureau of Economics

Each bureau has a set of mandates to guide its work. In the early 1970s, the agency became more aggressive in its prosecutions and sanctions. The business community and Congress criticized the FTC’s activism, claiming it had become too powerful, was insensitive to the needs of the public and business, and operated with little oversight from Congress or the president. During President Ronald Reagan’s first term, control of the FTC was moved under the president. Its direction was modified to become more cooperative with business interests, while continuing its consumer protective functions.

A Matter of Checks and Balances

Continue reading “We’ve Been Down this Path”