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Compliance F&I

How are You Embracing Change?

Karen Klees, Certified Consumer Credit Compliance Professional

 

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

Recently, U.S. Bank issued a letter to its dealer partners describing the bank’s policy with regards to fair and responsible lending. Well, that in itself is not news. Lenders have been issuing letters of this nature for the past few years. However, this letter did mark a significant milestone since the CFPB’s regulation of the retail lending 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.

To date, even with state regulations on F&I pricing, dealers have had substantial leeway to set their margins. While third-party administrators set risk-based costs for each product, dealers have the opportunity to set their margin based on how much money a lender will advance.

Along with potential reserve for originations, setting F&I product margins is the finance department’s primary way to generate profit. Because of this reliance, dealerships are very concerned about lending oversight. Meanwhile, U.S. Bank is taking what they believe is a proactive step to monitor pricing before any regulatory decisions are made. And, it’s likely that other lending institutions will observe this practice closely to hone their internal best practices.

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Enterprise Financial News – Volume 6

MagazineGet a new perspective on how to maximize your loan volume while staying compliant with the experts from EFG Companies.

Download the 6th volume of Enterprise Financial News Magazine.

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EFG Companies Recognized as One of the Best Companies in the Subprime Auto Finance Space

SP_125_squareSubprime Auto Finance News Lists EFG in the Subprime Top 125

EFG Companies, the innovator behind the award-winning Hyundai Assurance program, announced today that it has been named as one of the top 125 most influential firms serving the subprime auto finance industry by Subprime Auto Finance NewsOrganizations included in the SubPrime 125 profile are heavy hitters from the multiple facets of the auto finance industry, including from financing companies, rapidly advancing service and technology firms, industry associations and more. The Subprime 125 companies were chosen based upon nominations and editor’s picks.

“The SubPrime 125 issue is one of the highlights of our entire editorial calendar. Working as a team to craft a listing of the best companies and organizations in the subprime auto finance space is a challenging and gratifying experience. It’s our opportunity to showcase how important these operations are to industry growth and our economy’s health. Each one mentioned should be proud of the great work completed by their management teams and invaluable employees,” said Bill Zadeits, publisher of SubPrime Auto Finance News.

For close to 40 years, EFG has developed products to protect consumers from the risks associated with costly vehicle mechanical breakdowns.