Delinquencies

FactorTrust and Intellaegis partner to leverage complimentary platforms

ATLANTA - 

Two Used Car Week exhibitors — FactorTrust and Intellaegis — announced an integration partnership on Thursday.

Executives explained the servicing platform, masterQueue, which combines artificial intelligence with predictive data is set to leverage FactorTrust’s proprietary alternative credit data to locate lost customers and assets.

Intellaegis will use FactorTrust’s real-time data with its finance company customers for collections and recovery.

“Integrating FactorTrust’s proprietary data serves to strengthen our unmatched collection of traditional, alternative and niche data,” Intellaegis chief executive officer John Lewis said. “Layering Factor Trust’s unique predictive data on top of mainstream data improves masterQueue’s AI to facilitate the contact management process in regard to high-risk customers at the earliest delinquency stage possible. “This streamlines many manual, outdated debt collection and skip tracing data gathering and data usage techniques that are centered around locating lost customers.

“By automating the gathering, organizing and tracking of this extremely valuable data in a secure, and equally important, full state and federal regulatory compliant manner, the opportunity to locate and speak with a lost customer to help cure their debt gives our mutual customers the data and technology to improve their current contact management process,” continued Lewis, who will be making multiple appearances during Repo Con at Used Car Week, which begins on Nov. 13 in Palm Springs, Calif.

In 2016, American Banker ranked Intellaegis No. 11 among the top 20 FinTech companies to watch.

“We’re pleased to partner with Intellaegis to be part of the solution to the ongoing challenge of recovery management,” FactorTrust chief executive officer Greg Rable said.

“Our alternative credit data, combined with Intellaegis’ mainstream data, helps their lender customers to maximize their efforts in locating and prioritizing accounts, and hopefully, turn them into valuable future customers by satisfying those accounts,” Rable went on to say.

Westlake part of third DOJ settlement in 13 months over SCRA violations

WASHINGTON, D.C. - 

For the third time in about 13 months, the Justice Department has reached a settlement with a finance company for violating the Servicemembers Civil Relief Act (SCRA) in connection with vehicle repossessions.

This time Westlake Financial Services and its subsidiary, Wilshire Consumer Capital, have agreed to pay $760,788 to resolve allegations that the companies did not follow federal regulations by repossessing 70 vehicles owned by SCRA-protected servicemembers without first obtaining the required court orders.

During its investigation, the Justice Department found that Westlake and Wilshire had failed to adopt policies and procedures necessary to ensure that their motor vehicle repossessions complied with the SCRA. Westlake purchases services subprime and near-subprime retail installment sales contracts while Wilshire, which does business as Wilshire Consumer Credit, originates and services vehicle title loans

Officials said the agreement requires Westlake and Wilshire to provide $10,000 in compensation to each of the 70 affected servicemembers, plus any lost equity in the vehicle with interest.  Westlake and Wilshire also must repair the credit of all affected servicemembers, pay a $60,788 civil penalty to the United States and determine, in the future, whether any vehicle it is planning to repossess is owned by an SCRA-protected servicemember. 

If so, Westlake and Wilshire will not repossess the vehicle without first obtaining a court order or valid waiver of SCRA rights.  The agreement also contains provisions ensuring that all eligible servicemembers will receive the benefit of the SCRA’s 6 percent interest rate cap on their auto loans.

The DOJ indicated the agreement resolves the claims and causes of action asserted in the United States’ Complaint against Westlake and Wilshire filed in the United States District Court for the Central District of California, and the parties will stipulate to the dismissal of the complaint once Westlake and Wilshire deposit the funds required by the settlement agreement into an escrow account and pay the civil penalty to the United States. 

Westlake and Wilshire will contact servicemembers to be compensated through this settlement in the upcoming months.  They will locate victims and distribute payments at no cost to servicemembers.

Officials shared that this matter came to the department’s attention in 2016, when the Consumer Financial Protection Bureau’s Office of Servicemember Affairs notified the department that it had received a complaint that Westlake and Wilshire were conducting motor vehicle repossessions in violation of the SCRA.

The Justice Department reiterated that the SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service.  It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the finance company to refund prior payments before repossessing.

The court may also appoint an attorney to represent the servicemember, require the finance company to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. 

By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, officials said Westlake and Wilshire prevented servicemembers from obtaining a court’s review of whether their repossessions should be delayed or adjusted to account for their military service.

This development arrived after the Justice Department reached an agreement with CitiFinancial Credit Co. in September as well as Wells Fargo Dealer Services last September for SCRA violations.

“The members of our armed forces should be able to devote their full attention to their duties without having to worry about whether their legal rights will be violated by creditors,” Acting Assistant Attorney General John Gore said.  “We honor all servicemembers for their sacrifice and service to our nation, and this settlement signals our ongoing commitment to protecting the rights of our men and women in uniform.”

Acting United States Attorney Sandra Brown of the Central District of California added, “The women and men who serve in the armed forces protect our country from danger every day.

“Given the enormous sacrifice they make for all of us, we have a responsibility to ensure that their rights are protected. Westlake and Wilshire did not live up to this responsibility,” Brown went on to say. “But the settlement we have reached will fix the lending practices that led to violations, and vindicate the rights of the servicemembers affected.”

ALS Resolvion takes on additional capacity in new facility

CHARLOTTE, N.C. - 

ALS Resolvion contends it now has room to grow for the next decade.

The repossession management and skip-tracing services provider recently moved into a larger facility in Charlotte, N.C., to accommodate its rapid ascent in the marketplace.

With its new facility, Used Car Week sponsor ALS Resolvion highlighted that it has increased capacity by more than 50 percent. The new space also includes expanded training facilities more room for IT infrastructure.

“With our new facility we will drive better operating results and efficiencies and our clients will gain a better experience as well. Our success has brought growth,” said ALS Resolvion president Jose Mendiola, who is set to be one of the experts on hand for Repo Con at Used Car Week, which begins on Nov. 13 in Palm Springs, Calif.

“We simply outgrew the old facility and took the appropriate steps to ensure our new facility will meet our expansion needs over the next 10 years,” Mendiola continued. “From production staff to bolstering our ranks in several departments into the future, we’re thrilled to be able to offer great new job opportunities for those in the Charlotte area as well as meet our growth needs going forward.”

Top 10 states for 60-day delinquency in Q2

SCHAUMBURG, Ill. - 

Experian Automotive indicated that 30-day delinquency moved little during the second quarter when compared to the same time a year ago, but the 60-day delinquency reading did deteriorate more noticeably.

According to Experian’s State of the Automotive Finance Market Report, the overall 30-day delinquency rate stood at 2.20 percent at the close of Q2, which represents a 2 basis point improvement year-over-year.

However, second quarter 60-day delinquencies grew by 5 basis points as the rate came in at 0.67 percent.

Drilling deeper into the 60-day delinquency metrics, Experian found that what it classifies as finance companies — institutions that usually do not hold consumer deposits and oftentimes cater to subprime customers — had a rate higher than commercial banks, captives and credit unions combined.

The finance company 60-day delinquency rate came in at 1.55 percent in Q2. Experian determined the rates for banks, captives and credit unions were 0.59 percent, 0.48 percent and 0.29 percent, respectively.

Experian also noted that states where 60-day delinquency is highest remained in the traditional locations for that situation. The top 10 included:

—Maryland: 1.24 percent
—Mississippi: 1.23 percent
—Louisiana: 1.19 percent
—Alabama: 0.93 percent
—Georgia: 0.91 percent
—New Mexico: 0.88 percent
—South Carolina: 0.85 percent
—Texas: 0.83 percent
—Nevada: 0.79 percent
—North Carolina: 0.77 percent

Auto defaults record largest sequential jump in almost 6 years

NEW YORK - 

Analysts aren’t panicking, but the auto portion of the S&P/Experian Consumer Credit Default Indices made its largest sequential jump in almost six years.

On Tuesday, S&P Dow Jones Indices and Experian released data through August and reported the auto loan default rate rose by 9 basis points as compared to July to land at 0.95 percent. The month-over-month climb was the largest since December 2011. However, analysts emphasized the default rate remains low relative to historical levels.

While the latest sequential jump is noteworthy, it’s only a fraction of the largest month-over-month jump S&P Dow Jones Indices and Experian noticed, according to their data that goes back 10 years. Analysts recorded a 27 basis point spike in the summer of 2009 as the auto default rate increased from 2.19 percent in June to 2.46 percent in July.

David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, discussed the auto segment in more detail on Tuesday.

“Some future developments could affect consumer credit defaults: Auto sales have fallen since December 2016 and are down 11 percent,” Blitzer said. “Declining auto sales and the normal end-of-model year push to make room for new cars may encourage easier credit conditions and raise concerns about future defaults.

“Hurricane damage in Houston and across Florida is creating substantial financial stress,” he continued.

The auto default movement helped to push the composite rate — which represents a comprehensive measure of changes in consumer credit defaults — a bit higher in August. The composite rate ticked up 3 basis points month-over-month to come in at 0.86 percent.

The first mortgage default rate also increased by 3 basis points from July to 0.65 percent.

The bank card default rate continued to fall in August, dropping 12 basis points versus July to its lowest level since December at 3.19 percent. Bank cards were the only loan type to see a decrease in default rates in August.

Analysts went on to mention three of the five major cities saw their default rates increase in August.

New York had the largest increase, rising 13 basis points from July to 0.95 percent.

Los Angeles reported in at 0.66 percent for August, up 3 basis points from the previous month.

Chicago came in at 0.94 percent, up 4 basis points from July.

Dallas posted a decrease of 3 basis points from the previous month to 0.74 percent.

Miami enjoyed an even larger decrease, coming in at 1.13 percent for August, which was 10 basis points lower than July.

“Overall, consumer credit defaults show no reason for alarm,” Blitzer said. “Defaults on first mortgages are flat to down while defaults on auto loans have risen slightly in recent months.

Consumer credit defaults on bank cards continue their upward creep since the end of 2015 despite a recent drop,” he continued. The combination of an improving labor market, low inflation, and low interest rates are the principal factors behind currently favorable consumer credit conditions.

“The impact on mortgages on damaged or destroyed homes is not yet clear,” Blitzer added. “Job losses and rising spending needs could lead to increased consumer credit defaults in coming months.”

Jointly developed by S&P Indices and Experian, analysts noted the S&P/Experian Consumer Credit Default Indices are published monthly with the intent to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien.

The indices are calculated based on data extracted from Experian’s consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month.

Experian’s base of data contributors includes leading banks and mortgage companies and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.

CitiFinancial Credit to pay DOJ $907K for SCRA violations during repossessions

WASHINGTON, D.C. - 

A suit involving vehicle repossessions and members of the military came to a close Monday.

The Justice Department announced that CitiFinancial Credit Co., as successor to CitiFinancial Auto Corp., has agreed to pay $907,000 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by repossessing 164 vehicle owned by SCRA-protected servicemembers without first obtaining the required court orders.

During the investigation, DOJ officials said they learned that CitiFinancial conducted repossessions without court orders even when CitiFinancial had evidence in its own records suggesting that a borrower could be a protected servicemember. In several cases, loan servicing notes indicated that CitiFinancial was informed that the borrower was in military service or had received orders to report for military service.

The Justice Department said that CitiFinancial, nevertheless, continued repossession efforts and eventually succeeded in repossessing the servicemembers’ vehicles.

This settlement resolves a suit filed by the department in the Northern District of Texas and covers vehicle repossessions that occurred between 2007 and 2010. CitiFinancial Auto Corp. originated and serviced these vehicle installment contracts until 2010, when operations and assets were sold to Santander Consumer USA.

In February 2015, the Justice Department entered a settlement with Santander that provides servicemembers with more than $10.5 million in compensation for repossessions that violated the SCRA. As part of the investigation of Santander’s repossession practices, officials learned that CitiFinancial sold Santander the right to collect debts owed by servicemembers after their vehicles had been repossessed by CitiFinancial in violation of the SCRA.

The SCRA protects servicemembers against certain civil proceedings, including vehicle repossessions, affecting their legal rights during active military service. The SCRA requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service.

The court may then delay the repossession or require the finance company to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the finance company to post a bond with the court and issue any other orders it deems necessary to protect the servicemember.

By failing to obtain court orders before repossessing vehicles owned by protected servicemembers, the DOJ asserted that CitiFinancial prevented servicemembers from obtaining a court review of whether these repossessions should be delayed or adjusted to account for their military service.

Officials went on to mention this agreement further compensates servicemembers for their losses by requiring CitiFinancial to pay $5,000 to each impacted servicemember, in addition to the Santander settlement.

CitiFinancial must also pay $10,000 to one affected servicemember who did not receive partial compensation through the Santander settlement.

In addition, CitiFinancial will pay $500 per account to compensate borrowers for any lost equity, with interest, and must take steps to repair the credit of all affected servicemembers. An independent settlement administrator will contact servicemembers in the coming months to finalize individual settlements at no cost to the servicemembers.

“Members of our armed forces make extraordinary sacrifices in order to protect and defend our nation, and they should be able to serve actively without fear that their legal rights will be violated,” said Associate Attorney General Rachel  Brand. “This settlement provides financial relief and credit repair assistance to the servicemembers whose vehicles were repossessed by CitiFinancial.

“The enforcement of federal laws protecting current members of the Armed Services, veterans, and their families continues to be an important priority for this Department of Justice,” Brand continued.

“The men and women who serve in the armed forces deserve to have us protect their backs while they selflessly protect us,” U.S. Attorney John Parker added. “This conduct clearly fell short of that and I'm grateful we were able to repair some of that harm.”

ARA and RDN partner to bolster finance companies and repo agencies

IRVING, Texas - 

The American Recovery Association (ARA) announced a new partnership on Friday with Recovery Database Network (RDN), a business unit of KAR Auction Services.

The organizations highlighted the agreement will help finance companies manage and monitor vendor compliance by integrating ARA’s Compliance Monitoring System and compliance metrics with the various software solutions offered by RDN.

RDN VendorVision is a secure, web-based compliance management platform that connects companies with their vendors.

“This partnership will make RDN VendorVision a central component of the ARA’s broad portfolio of exclusive member benefits,” ARA president Dave Kennedy said.

“By integrating RDN’s Recovery Solution and VendorVision products with ARA’s Compliance Monitoring System, clients will now have the ability to set standards and verify the necessary compliance training required for their recovery vendor network — creating a ‘culture of compliance’ within the American Recovery Association,” Kennedy continued.

There are currently nearly 150 finance companies already utilizing both the RDN and the ARA systems. Both organizations stressed that these providers as well as repossession agents within the industry can benefit from this partnership.

“RDN is committed to supporting our lending partners with simplified, integrated and efficient products and services,” said Michael Briggs, president and chief executive officer of CarsArrive and RDN. “By working with ARA, we can help promote, monitor and manage compliance and meet the shared needs of repossession agents and lenders.”

The RDN partnership is just one of the many benefits offered to ARA members. Some of ARA’s other partnerships and member benefits include AW Direct, Experian Auto-check, Goodyear Tires, Direct Connect, Cruise One, Harding Brooks Insurance, National Independent Auto Dealers Association and PRIOS.

For more information about ARA, its partnerships and its member benefits, visit repo.org.

Del Mar Recovery Solutions reveals corporate rebranding and strategic initiatives

CARLSBAD, Calif. - 

Del Mar Recovery Solutions is sharpening both its look and approach to better serve the entire auto finance space.

The provider of national repossession management, skip-tracing, remarketing, license plate recognition and specialty recovery services is making significant strategic investments to support its growth plan.

Del Mar has successfully completed a comprehensive rebranding effort. Executives highlighted the redesigned Del Mar Recovery Solutions logo and website showcase a fresh look for the company and utilizes a responsive and easy-to-navigate website design. 

“Del Mar has experienced significant growth over the years, all while continuing with the focus of our core mission: providing high quality and compliant recovery services for financial institutions. The time to freshen up our look is now in order to better align ourselves during these exciting changes in our industry,” chief executive officer Josh Elias said.

“Del Mar Recovery Solutions is known for its relentless passion and commitment to the services it offers which is attributable to its employees, clients, and partners who all make the company a leader in the automotive asset recovery sector,” Elias continued.

Del Mar Recovery Solutions — which is one of the sponsors of Repo Con during Used Car Week beginning on Nov. 13 in Palm Springs, Calif. — went on to highlight that the bold look is part of a transformation to increase awareness in the marketplace and emphasize the large role the company plays in compliance, quality and oversight in the industry. The redesigned website incorporates the look and feel of the new Del Mar brand and serves as an informational resource that incorporates success stories and competitive information.

As part of establishing Del Mar as an industry leader, the company has made the following additions to its senior leadership team during the past 12 months:

—Ren Zamora as chief financial officer and chief risk officer

—Jeff Rau as senior vice president of business development, strategy, and vendor management

—Brian Elliott as senior vice president of operations

—Julie Swanson as controller

—Rod Browning as information technology project manager

—Deborah McDowell as corporate trainer

“The goal is to elevate the core attributes of the Del Mar brand, which will allow the company to continue to innovate in an ever changing industry,” Elias continued.

“Our leadership team continues to harness the power of the quality of service we provide. As our business evolves, the company will continue to respond to customer demands by investing in leadership, processes and systems as a part of that evolution,” Elias added.

In addition to the leadership additions, the company has also started to leverage subject matter experts such as CARMA for compliance, audit and risk management solutions.

“Del Mar seeks excellence throughout the business. By partnering with CARMA, Del Mar emphasizes its commitment to best-in-class compliance management,” Zamora said.

Last year, Del Mar received a strategic investment from TZP Growth Partners, a private equity firm focused on investments in growing services companies and part of the TZP Group family of funds. This partnership positioned Del Mar to stay focused on the development and implementation of forward thinking technologies, process improvements, additions to its leadership team and expansion into other service offerings.

“Del Mar's experienced management team, compelling value proposition and commitment to compliance positions the business for continued growth in the automotive asset recovery sector,” said Rodney Eshelman of TZP Growth Partners.

Also this year, the company more than doubled its office space in its corporate headquarters in Carlsbad, Calif. The substantial additional capacity provides Del Mar with the ability to expand with its existing clients as well as add resources for new clients.

“Del Mar has found tremendous success in hiring and retaining quality employees in San Diego. We will continue to focus on leveraging this unique labor pool in the southern California marketplace to deliver superior service to our customers,” said Hillary Reggiani, associate vice president of human resources.

With an entrepreneurial spirit, Del Mar was founded in 2011 and has increased its array of services during the course of the past six years to deliver national auto repossession management. Del Mar has experienced consistent success through its development of relationships with auto finance providers and financial institutions, repossession agencies and technology partnerships.

In 2017, the company also embarked on a Service Organization Controls (SOC 2) Type II audit with a PCAOB registered and licensed CPA firm. The objective of the SOC 2 audit is to convey trust and assurance to users of the system that Del Mar has deployed an effective internal control system to effectively mitigate operational and compliance risks that the system may represent to its users.

“As the auto finance industry continues to grow, the company will remain focused on the execution of its core values which include the development of its staff, training, compliance, technological innovation, and compliance initiatives, all in an effort to maintain its best-in-class automotive asset recovery services,” Del Mar officials said.

FCC to examine 11 recommendations for blocking phone calls

WASHINGTON, D.C. - 

How collections departments can make contact with customers via phone might be impacted by what the Federal Communications Commission is currently reviewing.

The agency’s consumer advisory committee is expected to consider a recommendation from its robocalls working group on blocking unwanted calls during its meeting set for Sept. 18.

Back in May, policymakers created 11 suggestions with the aim of dramatically reducing the flood of unwanted robocalls to consumers, improving consumer education and simplifying the complaint filing process. Those 11 points included:

1. Initiate and prosecute enforcement actions against known robocallers who are violating the law.

2. Ensure a system of effective enforcement, with appropriately escalating penalties against repeat violators.

3. Enhance its current online Unwanted Calls Consumer Guide to consolidate best practices and tips currently shared by other government agencies, and to reflect new guidance and resources emerging from industry’s work on this issue. Currently a number of links are provided to external resources. These resources should be more fully integrated into the aforementioned consumer guide.

4. Ensure that the FCC’s educational resources and complaint forms are available in accessible formats, and languages other than English where appropriate, and encourage others that provide educational resources and the ability to make complaints about robocalls to also do so.

5. Develop educational materials specific to the impact of robocalls on consumers with disabilities. One area of focus should be the use of robocalls over all types of telecommunications relay services (TRS), including video relay services, Internet Protocol Relay, and captioned telephone relay services. Consumer protection tips and resources should be highlighted as well as best practices for relay service providers. A second area to highlight is information and resources about accessible caller id services and equipment usable by people who are blind or visually impaired.

6. Simplify the consumer complaint filing process for unwanted calls. Many consumers receive multiple unwanted calls each day, and would currently have to enter each complaint separately. Developing a form that allows for information to be entered about multiple unwanted calls at once would simplify the process.

7. Create a separate intake portal for unwanted-call complaints. This portal would have a unique icon on the Consumer Complaint Center landing page. With the goal of reducing the burden for consumers of entering a complaint, this dedicated intake form would allow for multiple unwanted calls to be reported and would require the minimum amount of information needed to make the complaint actionable, while allowing other entry fields to be optional.

8. Incorporate educational information into the response sent by the FCC to consumers who submit an unwanted-call complaint. This could be a link to the FCC’s enhanced consumer guide discussed above. The response should also explain how unwanted call complaint data is used.

9. Develop an app that can be used by consumers with mobile devices to quickly file complaints for unwanted calls received on their device. The app should be accessible to and usable by people with disabilities. As allowed by the consumer’s privacy permissions, this app would automate the entry of the above-mentioned actionable information, as well as additional details if available.

10. Build upon the existing Memorandum of Understanding with the Federal Trade Commission by exploring the value and feasibility of creating a co-hosted single education and complaint portal for the issue. Currently, each agency hosts separate education content and complaint filing portals, and many consumers are unsure of where to file their complaint.

11. Explore making complaint data available to third parties on a near-real time basis in order to maximize its usefulness for companies whose robocall analytics engines use the data to identify telephone numbers that may be candidates for blocking or providing alerts to consumers.

Specific details about the FCC’s upcoming meeting on this topic can be found here.

3 critical questions for repo agents about locksmiths

CARY, N.C. - 

The Council of Repossession Professionals (CORP) cautioned repo agencies about the potential pitfalls of using a locksmith company that might be mandated by a particular finance company client but could utilize employees who may not be aware or comply with specific state regulations.

CORP explained through a post on the news section of its website that many states have explicit regulations when it comes to locksmiths, indicating that some jurisdictions prohibit contracting work to local locksmiths who might not be employed by a national company.

“Some states even demand that these national locksmith companies have an actual physical business in the state they are doing the service in,” said CORP officials, who represent eight national organizations including:

—American Lenders Service Co. (ALSCO)
—American Recovery Association (ARA)
—California Association of Licensed Repossessors (CALR)
—Florida Alliance of Certified Asset Recovery Specialists (FLACARS)
—Illinois Association of Repossession Agencies (IARA)
—Michigan Association of Repossession Agencies (MARA)
—Rocky Mountain Repossessors Association (RMRA)
—Time Finance Adjusters (TFA)

CORP suggested that repossession agencies ask and seek the answers to three simple questions with regard to the cutting of new keys for repossessed vehicles.

—Do locksmiths have to have a license to operate?

—What type of insurance does the state require them to have?

—Does the state require all businesses to carry worker’s compensation?

“Once you have this information, now you have a chance,” CORP said in the post that’s available here.