Categories
Economy

If Your Customers Can’t Pay, You Will!

 

Mark Rappaport President EFG Companies
Mark Rappaport
President
Simplicity Division
EFG Companies

According to a recent survey from Bankrate.com, 63 percent of Americans say they are unable to handle a $500 car repair bill; and, only one out of five consumers making less than $30,000 said they had enough emergency savings set aside to handle an unexpected bill.

In addition, a Pew Charitable Trusts study found that six out of every 10 American households reported experiencing a financial shock during the last year, with major car repairs and lost income ranking among the most common.

What does this tell us? That those rosy figures of economic growth don’t match the current financial stresses of Americans. The fact is, with inflation increasing the costs of food, healthcare, clothing, utilities, etc., and slow wage growth, many Americans are finding it more difficult to pay in to their “rainy day fund”.

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Categories
Business Growth Economy

Don’t Let Interest Rates Dictate Your Loan Volume

Brien Joyce Vice President EFG Companies
Brien Joyce
Vice President
EFG Companies

In a widely anticipated decision, the Federal Reserve voted to raise interest rates this past December by 25 basis points.

And, of course, one of the first industries that will be affected by this rate hike is auto finance. As you re-assess your lending portfolio to take into account the new rates, it’s also the perfect time to evaluate how to differentiate your institution beyond rate alone.

With the interest rate hike, we can expect retail auto sales to begin to plateau in 2016. It wouldn’t be surprising to see little to no growth in overall unit sales next year. This trend will shape dealer business, as they will begin focusing more on customer retention and brand enhancement. This refocusing offers lenders the chance to differentiate their institution and grow loan volume through their engagement with dealers. The more business a given dealer has, the more opportunity you have to increase loan volume. Therefore, every lender should ask themselves, “How am I helping my dealer partners achieve their business goals?”

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Categories
Compliance

Staying Vigilant on Compliance

Karen Klees, Certified Consumer Credit Compliance Professional

 

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

The auto industry won a small victory over the Consumer Financial Protection Bureau (CFPB) in November when the House passed the Reforming CFPB Indirect Auto Financing Guidance Act. In its current form, this piece of legislation directs the CFPB to amend how it issues guidance to indirect auto lenders by:

  • Providing a public notice and comment period before issuing the guidance in final form;
  • Making publicly available all information relied on by the CFPB, while also redacting any information exempt from disclosure under the Freedom of Information Act;
  • Consulting with the Board of Governors of the Federal Reserve System, the Federal Trade Commission, and the Department of Justice; and,
  • Studying the costs and impacts of the guidance to consumers, as well as women-owned and minority-owned small businesses.
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