The volume of consumers without a bank account is now at an all-time low.
For the third consecutive survey period, the number of U.S. households without a bank account fell, according to the results of the 2017 biennial National Survey of Unbanked and Underbanked Households released by the Federal Deposit Insurance Corp. (FDIC).
Officials reported the percentage of U.S. households that were unbanked in 2017, the most recent year of the survey, was 6.5 percent, the lowest rate recorded since the FDIC began conducting the survey in 2009. It was down from 7.0 percent in 2015, and down significantly from a high of 8.2 percent in 2011.
The FDIC explained the unbanked numbers for 2017 equate to 14.1 million adults in 8.4 million households not having a checking or savings account.
Officials believe the decline in the unbanked rate from 2015 to 2017 can be explained almost entirely by improvements in the socioeconomic circumstances of U.S. households.
The number of underbanked U.S. households was also down compared to 2015 levels. In 2017, 18.7 percent of U.S. households were considered underbanked, or approximately 48.9 million adults in 24.2 million households.
For purposes of the survey, the term underbanked refers to households that had an account at an insured institution but also obtained financial products or services outside of the banking system.
Consistent with previous surveys, the FDIC found that the banking status in 2017 varied considerably across the U.S. population.
For example, unbanked and underbanked rates were higher among lower-income households, less-educated households, younger households, black and Hispanic households, households headed by working-age individuals with a disability, and households with incomes that tend to vary from month to month.
Officials mentioned mobile banking continues to become an increasingly important way for consumers to access their accounts. In 2017, mobile banking was used by 40.4 percent of banked U.S. households to access their account, almost double the 23.2 percent four years earlier.
According to the survey results, 86.0 percent of banked households visited a bank branch in the past 12 months, and 35.4 percent visited ten or more times. Officials determined this figure held true for households that used online or mobile banking as their primary means for accessing their accounts: 81.0 percent of banked households that used mobile banking as their primary method visited a branch in the past 12 months, and nearly one-quarter (23.0 percent) visited ten or more times.
Other key findings in the survey include:
— Nearly 13 percent of households (14.8 million households) demonstrated unmet demand for mainstream small-dollar credit, and a majority of these households (57.2 percent) reported staying current on bills in the prior year. The report notes that new underwriting technologies, such as those that rely on transactions in consumers’ checking accounts, could help expand credit availability for some of these households.
— One in five U.S. households (22.7 million households) did not use mainstream credit in the prior 12 months and, consequently, may lack a credit score. Black and Hispanic households at every income level evaluated in the survey were more likely to be in this condition than white households. The report notes that helping these households establish and build a credit history can make it easier for them to access credit on reasonable terms when a need arises.
— Along with 86 percent of banked households, almost one in six unbanked households visited a bank branch in the past year. The report notes that these visits may represent key opportunities to inform unbanked households about products and services that can meet their needs.
— While unbanked rates have fallen in recent years, those that remain unbanked have proven more and more likely to respond that they are “not very likely” or “not at all likely” to open a bank account in the next year (75.0 percent in 2017 versus 62.1 percent in 2013). This fact, along with evidence that certain population segments remain much more likely to be unbanked, suggests that strategies targeted at addressing barriers to bank account ownership for specific groups may help further reduce unbanked rates.
— The share of households reporting that they turned to nonbank firms in the last year for the provision of credit and transaction services tracked in the survey dropped to 22.1 percent, down from 24.0 percent in 2015 and 24.9 percent in 2013. The drop was evidenced in both the use of credit and transaction services.
“The good news is that our nation’s banking system is serving more American households than ever before. The bad news is that even as the overall number of people who are unbanked has declined, 8.4 million households continue to lack a banking relationship,” FDIC chairman Jelena McWilliams said.
AGORA founder and chief executive officer Steve Burke is building a robust collection of integrations where his platform for bulk portfolio transactions can function with dealer management software (DMS).
With Frazer and DealerCenter already in his pocket, Burke recently announced AGORA now has a joint newly launched integration functionality relationship with Wayne Reaves.
“Partnering with Wayne Reaves is a great honor and opportunity for both of our exceptional organizations,” Burke said. “The success and protection of our dealer customers is a shared mission for AGORA and Wayne Reaves, who are aligned to help dealers with loan portfolios; sell faster, sell more profitably and sell securely.”
As one of AGORA’s key integration partners, Wayne Reaves’ dealers can seamlessly and securely offer their loans for sale to the 60-plus banks, finance companies and credit unions on the AGORA platform, avoiding unsafe emails and data files
“Data files have been eliminated by the Wayne Reaves integration and dealers now have more liquidity than ever before,” Burke added.
Wayne Reaves became a licensed Georgia dealer in 1973 and has been involved in the independent automobile dealer business ever since. In 1987, Reaves began providing software to dealers for not only buy-here, pay-here, but also bank financing, wholesale, cash and lease transactions.
Wayne Reaves Software is now a leading provider of dealer management software and websites to independent dealers. The company now serves more than 5,000 dealers across 24 states.
And now the company has a relationship with AGORA.
“AGORA is the best way to offer your buy here pay here portfolio to many lenders at one time, ensuring the best possible offer is received. This will allow quicker transactions, more money and less hassle for the dealership using Wayne Reaves Software,” Wayne Reaves business relations director Bob Higgins said.
Visit www.agoradata.com for more information.
Two platforms used by an array of independent and buy-here, pay-here dealerships now work together.
According to a news release distributed on Wednesday, Selly Automotive’s customer relationship management (CRM) platform is now integrated with Friday Systems Lot Wizard dealer management software (DMS).
The companies highlighted this partnership will allow sales and inventory data to sync for dealerships to expand their knowledge about the customer during the sales process.
“This integration reinforces our commitment to providing affordable integrated solutions for independent and BHPH dealerships. We worked closely with the Friday Systems team to ensure inventory and sales data will be integrated for Lot Wizard Pro,” Selly Automotive chief executive officer Zach Klempf said.
Friday Systems strives to provide cutting edge solutions in dealer software by staying on top of the ever-changing landscape of the business and modifying the software to help dealerships stay in compliance.
“We’re excited to offer Selly Automotive’s CRM as an extension to our existing customer management tool in Lot Wizard Pro,” Friday Systems president Kerry Wiest said.
“This CRM will provide greater purpose to the independent and BHPH dealerships’ dealer management system (DMS) data, while sustaining our culture of affordable prices and comprehensive, reliable services,” Wiest went on to say.
For more information about Selly Automotive, visit www.sellyautomotive.com or call (888) 246-1372. For more information about Friday Systems, visit www.lotwizard.com or call (800) 677-7160.
Specialty financing and associated portfolios certainly are far from elementary, which is why the topics are now going to be examined within the world of higher academics.
FLOCK Specialty Finance has partnered with Kennesaw State University to create a new research lab that will analyze and interpret traditional and alternative consumer borrowing data to improve customer experience in consumer credit financing and enhance risk modeling in the buying and selling of debt portfolios.
The FLOCK Specialty Finance Lab is part of The Graduate College at Kennesaw State University led by associate dean Jennifer Priestley, who also serves as director of the Analytics and Data Science Institute. The Institute supports advanced study and research in the area of data science and analytics and provides training and graduate study grounded in a rigorous curriculum that is further enriched by opportunities for students to work on data-centric research challenges facing major private sector organizations.
“Applied research addressing real business issues is the hallmark of the 21st century Ph.D. program,” Priestley said. “The rapid growth of the specialty finance industry provides our faculty, staff and students with exactly the kind of challenge in which fact-based, data-driven research can make an enormous difference.
FLOCK Specialty Finance’s alliance with our Institute is a smart way to advance the evolution of its marketplace,” she continued.
FLOCK Specialty Finance is involved in middle market financing for charged off consumer debt, select subprime performing market sectors and other complementary receivables segments. The firm’s dedication to delivering value-added information tools and analytics to its clients along with flexible, nimble funding is the driver of this new partnership with Kennesaw State University.
“We selected the Analytics and Data Science Institute as our partner in this effort because of its focus on applied analytical research and access to Ph.D. students in Data Science,” said Michael Flock, founder and chief executive officer of FLOCK Specialty Finance. “The partnership will help us better evaluate the debt portfolio financing and will help our partners improve performance in their existing portfolios.
"Equally important, Dr. Priestley and her team of Ph.D. students help our industry better understand the impacts of public economic data, seasonality and other macro trends on our debt portfolios and on consumers’ ability to repay outstanding debt,” Flock added.
This first year of the alliance is expected to generate a unique scoring approach to improve customer experience in auto financing. Early results from this initial project focused on subprime auto financing may be available by fall.
Operators can get some treats ahead of Halloween as the biggest buy-here, pay-here specific event of the year is headed back to Las Vegas.
The NABD Buy-Here, Pay-Here Subprime Conference, powered by the National Independent Automobile Dealers Association, is set for Oct. 8-10 at the MGM Grand in Las Vegas, offering the industry’s best BHPH-specific training for both new operators and BHPH veterans.
The conference features education from the BHPH experts at the National Alliance of Buy-Here, Pay-Here Dealers and NIADA, including Ken Shilson, Ingram Walters and Chuck Bonanno, as well as top names from the subprime sphere.
Attendees will learn about new industry technology, the latest marketing strategies including digital marketing, collections and underwriting, and best practices that work today – and in the future.
There are also opportunities to network with industry experts, explore ways to secure capital to fund your operation, get updates on compliance and legal issues, and check out an exhibit hall filled with the latest products and services to improve any BHPH business.
“NABD continues, bigger and better than ever,” said Shilson, NABD president and founder. “You can't afford to miss this event. Opportunity knocks for BHPH operators who capitalize on it — and this conference will show you how to do it.”
The discounted early registration rate of $495 per person applies through Sept. 22. Group discounts are also available.
For more information or to register, visit www.nabdsubprimeconference.com or call (832) 767-4759.
AGORA, a Texas-based provider of technology solutions for the financial services industry, recently made two more moves to bolster its position as a platform for bulk portfolio transactions.
Along with announcing that Chris Barry has become a part of the management team as senior vice president of sales, AGORA also revealed that Tom Hudson has joined the company’s advisory board.
Hudson is the founding partner of Hudson Cook — one of the nation’s preeminent law firms in the area of consumer financial services. He is also the founder of CounselorLibrary.com — a collection of legal tools for compliance professionals as well as founder and editor in chief of CARLAW, a monthly publication of legal developments in auto finance.
“I have known and worked with Tom for years. Tom is an icon and a household name in our industry. We are thrilled and privileged that he has joined our talent-packed advisory board,” AGORA founder and chief executive officer Steve Burke said.
Hudson joins an advisory board that could be considered a who’s who in consumer finance, including:
— Ian Anderson, group president of Westlake Financial Services and a previous recipient of the SubPrime Auto Finance Executive of the Year
— Eric Green, CEO of Real Time Resolutions
— Kevin Weis, CEO of Spireon
— Steve Levine, founder of Ignite Consulting Partners
— Jim Bass, CEO of Starboard Advisors
— Gary Flowers, director of sales at Conduent
“I have advised and counseled thousands of market participants in my decades of practice in consumer finance. AGORA represents a truly remarkable and wholly novel dimension to our sector. It is sure to revolutionize how business is conducted, and I am very excited to help in that effort,” Hudson said.
Since its launch in April 2017, AGORA’s flagship loan exchange platform has rapidly grown in the secondary market for auto loans, allowing buyers and sellers to publish and exchange loan data directly in an efficient and secure environment without the need of intermediaries or brokers.
AGORA was created in response to the many friction points and inefficiencies that exist in the manner that auto loan portfolios currently trade — namely poor and inconsistent data, lack of transparency from the brokers that previously dominated the market and heightened regulatory concerns over unsecured transmission of personal consumer data.
“Having such a ‘blue-chip’ name as Tom Hudson associated in such a meaningful way with AGORA is a strong endorsement and validation of the value we continue to bring to the market. We could not be more proud to have Tom and our entire advisory board as our partners in our mission,” Burke said.
And now Chris Barry has joined the management team as the senior vice president of sales.
Barry will lead the growth of the platform and AGORA’s ever-expanding scope of services and solutions it offers to the marketplace of auto finance loans and receivables.
“Chris is an experienced automotive finance leader with over 30 years of success building great organizations,” Burke said. “His senior leadership roles with GWC Warranty, American Credit Acceptance, JP Morgan Chase, and AmeriCredit Financial Services position Chris well to lead the growth and success of the AGORA community.
"Our growth over the past year has been exceptional, and we are thrilled to have Chris as a catalyst to take AGORA to even higher levels of success and innovation.” Burke continued. “Chris will take on the mission of building our sales team and messaging to the industry.
Currently, AGORA has 10 open positions for sales professionals and account managers, and Chris has put in place an excellent career path for motivated sales professionals,” Burke went on to say.
The announcements involving Hudson and Barry arrived a couple of months after AGORA formed a partnership with Nancy Hughes — a leading debt acquisitions expert — as well as finalizing a partnership with Ignite Consulting Partners to provide increased transparency and security.
Barry added, “Mighty oaks from tiny acorns has been my tagline throughout my career. The tremendous power and value of AGORA’s platform and groundbreaking technology is no tiny acorn, considering we have already placed $1.5 billion in the market in only 14 months, which we should easily double in the next 12 months.
“I am thrilled to be part of this amazing team, helping drive AGORA’s integrated resources across the consumer finance sector with this revolutionary platform,” Barry went on to say.
Tricolor, one of the nation’s largest used-vehicle retailers designed to serve Hispanic consumers, recently announced the addition of veteran financial services executive Jason Hutton as its chief innovation officer.
Hutton, who will report directly to chief executive officer Daniel Chu, is responsible for broadening the mission-driven platform to serve thin and no-file Hispanic consumers in additional sectors and through new, innovative products or services.
“While we continue to evolve the next generation of retail auto delivery to our consumer, Jason will be exploring new domains which leverage our current platform,“ Tricolor Chu said. “His proven energy, insight and entrepreneurial spirit across a diverse range of financial sectors will be the key to advancing our mission-driven approach to lending in new and novel ways.”
Hutton has served in a variety of senior executive roles at a number of leading financial services companies as well as smaller, more agile firms, spanning responsibilities in private equity, structured finance, consumer finance and M&A.
Hutton began his career with GE Capital, earning a Six Sigma certification, followed by investment experience at HBK Capital Management and Fortress Investment Group. He has also held senior management roles at Huron Consulting Group, the IBS Group, LGM Finance, Braviant Holdings and Cortland Capital Market Services.
“The Tricolor model delivers a powerful industry dynamic — a propriety and proven analytics-driven underwriting model, an innovative integrated sales and lending business model, and a trusted consumer brand,” Hutton said.
“I’m eager to explore innovative ways that we can leverage this unique set of resources to expand our affordable lending approach across all of our consumers’ possible financial services needs,” he went on to say. “The target market is sizable, the business strategy has been validated, and the opportunity to create significant value is enormous.”
More dealer assistance is set to arrive this summer, especially for buy-here, pay-here operators who have to juggle the end-to-end process of finding inventory, reconditioning vehicles and finalizing deliveries.
Stemming from dealer feedback to make a challenging audit process easier, NextGear Capital will be introducing a self-reconciliation tool that is designed to save dealers time and provides them with greater control over their vehicle audits. Combined with other recent audit process improvements, NextGear Capital insisted dealers will be able to experience up to 80 percent fewer audit-related interruptions and have the ability to reconcile units seamlessly from their devices.
With a mobile-first solution for reconciliation, the company highlighted dealers are empowered to take charge of their audits through a simple three-step process via NextGear Capital’s Account Portal. After logging in, dealers select a vehicle, take four photos, then submit them to clear outstanding audits in real-time.
Randy Dohse, NextGear Capital senior vice president of operations, explained this process can significantly reduce the amount of time it takes to resolve audits and allow dealers to avoid floor planning delays.
“After hearing dealer opinions on the audit process from our annual client survey, we were determined to make streamlining the entire auditing experience one of our top priorities,” Dohse said in a news release.
“We wanted to build more trust with dealers through increased transparency and simplify the overall experience to return time back to them so that they can focus on their business,” he continued. “Improving customer experience and addressing customer feedback with effective solutions are critical components for any business.”
NextGear Capital emphasized that dealer feedback was crucial in determining where improvements to the auditing process could be made. After conducting a comprehensive survey to gauge dealer feedback, results showed that the audit process was one of the more time-consuming tasks of daily floor plan management.
These results inspired NextGear Capital to further improve the auditing experience for dealers everywhere.
“None of us love the audit process. So I was very straightforward with our account rep and actually they had one of the regional guys fly in to talk to us about what we were feeling and what we were experiencing, and why that was such an issue for us,” said Heather Moreno, owner of Lightning Motorsports in Grand Prairie, Texas.
“They listened, they made changes, they’ve streamlined the audit process, they’ve worked with the auditors and I have found NextGear Capital to be incredibly responsive,” Moreno continued.
Efforts to streamline the auditing process have changed the way dealers interact with NextGear Capital. Beyond the transparency and flexibility that the account portal’s self-reconciliation tool provides, dealers now can get twice as much time to fully clear an audit, streamlined notifications and the ability to advise on scheduled vacation and auction days, all of which can be easily done from a smartphone or tablet.
“When we revised our audit reconciliation process, we knew that we were tackling a major pain point for dealers,” said Lucas Hancock, NextGear Capital senior director of risk.
“Empowering dealers to self-reconcile units combined with the most flexible auditing process in the market will positively transform how we communicate with and conduct business with dealers for the foreseeable future,” Hancock went on to say.
For dealers who are constantly on the go, NextGear Capital reiterated that the self-reconciliation tool and audit improvements can provide the benefit of a flexible and efficient process, with fewer interruptions and more time to get everything done.
Dealers also can receive improved visibility through the “My Audits” tab in their account portal dashboard, which will show units that need to be verified, audit due dates and potential financial impact if no action is taken.
My Audits is set to launch this summer, with additional self-reconciliation features to follow.
“Access to an industry-best combination of improved flexibility, functionality and convenience on audit processing means dealers have more time to concentrate on dealership sales and operations,” NextGear Capital said.
For more information about NextGear Capital’s self-reconciliation tool launching later this year or the audit process, visit www.nextgearcapital.com or contact a local NextGear Capital representative.
When the phone rings at a buy-here, pay-here dealership, it’s not uncommon for customers to be calling the store about a vehicle mechanical problem.
To help consumers who might not have the financial resources for major repairs, Confident Financial Solutions (CFS) and WebBank rolled out a new solution, leveraging the capability of the vehicle owner’s smartphone.
The platform introduced on Monday by CFS and WebBank lets a service adviser at a dealership or repair center offer customers another way to pay for repairs. A consumer completes a simple, four-step loan application process — from a smartphone — and receives a credit decision within minutes for up to $7,500. The loan is made by WebBank, a nationally-licensed, FDIC-insured, state-chartered bank.
“CFS, over the past four years, has grown to be one of the nation’s largest providers of installment loans to consumers made through auto repair service centers and car dealerships. As such, we understand how hectic things can get in a service department,” CFS chief executive officer Richard Counihan said. “This innovative solution will help improve service adviser productivity and enhance the customer experience at an often tension-filled moment.
“What’s more, this fueled-by WebBank solution will aid our expansion plans as it supports our drive to offer ‘auto loans you can trust’ to more people in more places,” Counihan continued.
“Most important, however, this partnership signals that CFS has fulfilled WebBank’s rigorous evaluation process and joined their select group of partners. Our relationship with WebBank allows us to offer a new, differentiated financial product that will benefit our customers and the hundreds of thousands of consumers they serve,” Counihan went on to say.
From what CFS calls the “point of need,” the service adviser’s desk, WebBank will issue, fund and hold the loans originated through the CFS platform on its own balance sheet. Drawing on CFS’ massive database of repair costs and its own deep insight into loan criteria, WebBank is able to evaluate all factors and then, in mere moments, provide approval status on the consumer’s smartphone, keeping the entire process private and embarrassment-free.
“WebBank is pleased to partner with CFS and bring to the automotive sector a new and better way to help their customers handle unexpected financial burdens that can occur when vehicle repairs are needed,” WebBank executive vice president Jason Lloyd said.
“As with all our partners, WebBank strives to offer financial products that exceed the most stringent qualification and compliance requirements in the banking industry while providing an exceptional experience between the bank and its consumers obtaining loans,” Lloyd continued.
According to a recent survey by AAA, the travel services organization, one in three motorists, or 64 million U.S. drivers, would not be able to pay for an unexpected vehicle repair without going into debt.
“As a long-time user of CFS services, we are excited by the new WebBank-fueled solution,” said Dan Johnson, vice president of fixed operations at Larry H. Miller Dealerships.
“We’re committed to excellence for our customers and always looking for ways to enhance their service experience. This service offers our customers yet another way to finance their auto repair expenses,” Johnson added.
Buy-here, pay-here dealers in California who watch vehicles roll over the curb with buyers who have insurance challenges can take advantage of a new product offered by Westlake Financial Services.
The finance company recently announced a new spot delivery insurance program, which is underwritten by Knight Management Insurance Services and now available to its dealer partners in California. Westlake’s new spot insurance program is designed to provide dealers short term insurance on the vehicle they have delivered to their customer during the funding process.
The company explained spot insurance can give dealers immediate vehicle coverage, eliminating the concern when a customer’s insurance cannot be verified at the time of purchase. Spot insurance can offer temporary, flexible point of sale policies available for seven- or 14-day coverage that can mutually benefit dealerships and their customers, creating a win-win opportunity.
“We are excited to offer an insurance product for dealers that will help get their customers on the road faster with immediate protection during the funding period,” said Ralph Ontiveros, vice president of Westlake Services and Lending Solutions.
Westlake highlighted every spot policy comes with five out of the box coverages — bodily injury, property damage, medical payments, comprehensive and collision. Dealers also have the option to purchase uninsured/underinsured motorist.
Spot insurance is available in the state of California through DealerCenter.
Dealerships interested in learning more about spot insurance are invited to contact Westlake’s insurance department directly at (866) 619-2524 or online at www.westlakefinancial.com.
