Dealertrack on Tuesday launched its next generation in-state registration and titling solution for dealers in California. With a new modern user interface, the company highlighted this latest version of Dealertrack’s registration and titling system was developed to radically simplify the registration and titling process.
Dealertrack explained the Web-based registration and titling solution can delivers a number of benefits to California dealers, including:
• Fast transaction speeds
• Same-day shipping of plates and stickers
• Expedited notification of transaction audit results within 48 hours via Dealertrack’s Audit and Scan Service
• Clean and organized one-page data entry
• Single-click processing for most transactions
• Zero wait time for data entry, even when DMV systems are down
• DMS import from all major systems
• Point-to-point shipment tracking of vehicle license plates and registration documents.
“We have worked closely with title clerks, business managers and controllers in California dealerships to get their guidance as to how we can make their jobs easier and their work processes more efficient. The result is a simple, fast solution with powerful functionality,” said Bill Rountree, vice president and general manager at Dealertrack.
“With this new software, users will also have greater visibility into every deal — at every step of the process, at any time — allowing for better transaction tracking and workflow management,” Rountree continued.
Dealertrack has more than 20 years of registration and titling experience, and manages more than 45 million vehicle titles nationwide. Dealertrack is one of the only companies that can offer a comprehensive solution to meet the broad range of dealers’ registration and titling needs, including in-state and out-of-state registration and titling tools, as well as expedited title release services.
For more information on Dealertrack’s registration and titling solution, go to this website.
The chief of staff at the Consumer Financial Protection Bureau recently spelled out nine priority goals the regulator intends to work toward during the next two years.
While listed alphabetically, the first three mentioned by Chris D’Angelo certainly could be connected with auto financing. The rundown included:
1. Arbitration
2. Consumer reporting
3. Debt collection
4. Demand-side consumer behavior
5. Household balance sheets
6. Mortgages
7. Open-use credit
8. Small business lending
9. Student lending
“We selected these goals based on the extent of the consumer harm that we identified and our capacity to eliminate or lessen that harm,” D’Angelo wrote in a blog post on the CFPB’s website.
“We weighed each of our tools — for example, setting basic rules of the road, improving consumer education, or holding institutions accountable for breaking the law — to determine the right mix for achieving each priority goal, and we developed a plan to make sure that we put our limited resources to work in the most effective way possible,” he continued.
D’Angelo indicated that the CFPB articulated these nine topics as a way to help its Consumer Advisory Board. But he also conveyed a message that the bureau is staying busy beyond these nine subjects.
“It’s important to note that these priority goals do not capture all of the important work we are doing,” D’Angelo said. “In particular, we will continue to police all markets within our jurisdiction for compliance with consumer financial law and regulations. So, financial companies should continue their focus on complying with the law beyond the particular issues described in the goals, whether or not they see their particular industry or product mentioned explicitly.
“In addition, while this strategy focuses primarily on forward-looking priorities, there are some priority work streams that are well-established and ongoing, and we will see that work through to completion,” he went on to say. “This includes, in particular, our fair lending oversight of indirect auto lenders and our rulemaking on prepaid cards.”
Extended explanations about the CFPB’s nine regulatory can be found here.
It’s a scenario perhaps not too uncommon to many finance company executives. They determined one of their key employees is incapable or unwilling to succeed with the company.
To illustrate why it’s important to focus on six root factors that drive search success, Automotive Personnel founder Don Jasensky shared a case study about how a finance company first went about finding a new top executive.
Jasensky recapped that a finance company hired his consulting firm, and he met with its five-person hiring committee. This initial meeting was to assemble the experiences, traits and qualities the finance company was seeking for its new executive.
“I asked this group of executives what are the objectives for the position — metrics — the numbers to understand where they are at and where they want to get to,” Jasensky said. “They were flummoxed. No one really had a handle on what success would look like in terms of numbers.
“Bad start, but typical,” he added.
Then Jasensky moved to a key question he thought would help the committee formulate a strategy. A year from now, what will this candidate need to accomplish to be considered a great hire? After posing that question, Jasensky said, “a hockey game broke out.
“It quickly became apparent that each committee member had a different idea of what the responsibilities and authority level would be,” he continued. “‘Authority creep’ may have been on the minds of some of the members to cut up a little bigger piece of the corporate pie for themselves. Another member was looking to unload several of his undesirable responsibilities on this new executive.
“Their interviewing questions were mainly perfunctory with little substance to get to the true ability of an interviewee,” Jasensky went on to say. “We helped the group form a list of intelligent interviewing questions that would be their road map for conducting productive interviews.
“I encouraged an open discussion, room for respectful arguing and helped lead them away from hiring a camel and getting the race horse they were seeking,” he added.
To get that executive to help the company flourish, Jasensky recommended that the hiring committee focus on the six root factors that will drive success. That rundown included:
• Define success by position objectives and goals. What are the numbers now and where should they be? This is a metrics question. Understand the numbers before you start your search.
• Define problems the new employee needs to correct.
• Define opportunities the new employee can leverage.
• With experience, setting a hard number is usually a mistake. Never be married to a number. Why? Jasensky explained some people are doing a better job after five years than others after 15 or 20 years. “You need enough experience to excel at the position, but ‘enough’ can vary greatly among candidates,” he said. “Allow for this in your search.”
• Who will be part of the hiring committee? Discuss the position with them so each is looking for the same candidate. “Remember that a camel is a race horse selected by a committee,” Jasensky said.
• Prepare a list of intelligent interviewing questions that will lead to a great hire.
More suggestions about hiring quality employees can be found at www.searchpro1.com.
The National Automotive Finance Association is again hosting the opening module of its Consumer Credit Compliance Certification Program; the ongoing training endeavor to help finance companies and other stakeholders in the industry tackle the increasingly difficult challenge of complying with federal and state regulatory requirements.
The NAF Association will welcome another cohort of students during the training session scheduled for April 21 through April 22 in Tampa, Fla.
The certification program is designed to provide the compliance professional with a solid working knowledge of the federal laws and regulations that govern consumer credit, together with a representative overview of state consumer credit law.
The program consists of four modules — two presented in an in-person classroom setting and two in an online format at the student’s own pace. Each module includes multiple sessions and each session provides a thorough outline and description of the applicable law or regulation. Each session is followed by an online test that must be passed to receive credit for the session.
“The program provides the student with a comprehensive breakdown, as well as ‘in total’ walk-through, of the consumer credit laws and regulations, preparing graduates to perform in a compliance role. The course work is rigorous,” NAF Association executive director Jack Tracey said.
Tracey noted there are 22 hours of classroom work and it likely takes 30 minutes to an hour to complete each of the 29 online sessions.
After successfully completing the program, the graduate will be recognized as a Certified Consumer Credit Compliance Professional. Tracey indicated the Certified Compliance Professional must complete continuing education every two years to maintain certification.
“The continuing education will provide updates on statutory and regulatory requirements, and discuss developments,” he said.
To register for the next module or for more details about the Consumer Credit Compliance Certification Program, visit this website.
After many years of investing in research and development with its valued clients and partners, MaximTrak Technologies recently rolling out an F&I platform the company believes has four unique enhancements geared toward international business.
The MaximTrak Global platform is being released in the United States, Canada, China, Australia, South America and into Europe. This new platform contains newly enhanced features aimed at creating a world-class experience that not only handles the challenges of modern F&I but increases profitability and CSI scores.
These new features include:
— Customizable portal page: F&I managers have access to a configurable landing page upon login that displays the most relevant reports, news items, alerts, and other critical content.
— Enhanced workflow: With a newly enhanced workflow, F&I managers can flow through the transaction process, rating, menu, contracting, and reporting faster than ever — without compromising on compliance.
— Media-rich content: New presentations tools and videos are underway to allow for a more engaging and informative sales experience for the modern consumer.
— Scalable, configurable and customizable: The new platform can allow for new levels of tailoring the system to meet the particular needs of the dealership and the F&I manager. It also sets the stage for adding new custom features to meet the specific ways our customers do business.
In addition, new and existing clients can upgrade to MAXIMTRAK FLITE, which can combines a state-of-the-art touch screen and tablet technology with MaximTrak’s fully integrated, compliant and comprehensive system to put the customer in control in a whole new way.
The entire buying process is enhanced and streamlined with interactive videos, surveys, product recommendations, package building, and more. With the flick of a finger, customers are guided through a consistent, frictionless, and enjoyable sales experience transforming the vehicle delivery process and driving dealer profitability.
MaximTrak Global will be made available to existing MaximTrak customers. Current and new customers can upgrade to FLITE at an introductory rate for a limited time.
“We have taken what we have pioneered in America out to lead the global effort. Then we are bringing back home what we learn internationally,” MaximTrak Technologies president Jim Maxim Jr. said.
“This cross-pollination gives us unique insights into creating better buying experiences, better systems, and better results for OEMs, dealer principals, F&I managers, agents and the end consumer,” Maxim added.
To learn more and for a personal demonstration of MaximTrak, call (800) 282-6308 or email sales@maximtrak.com.
Carleton Lending Solutions, a provider of compliant loan calculation and document generation software, recently rolled out its next generation suite of tools, including CarletonCalcs, CarletonDocs, CarletonAccess and CarletonAudit.
Carleton highlighted that its solutions incorporate the latest upgrades to the firm’s LoanSmart Solutions that have been adopted by major lending software providers for more than 20 years. These lending solutions represent Carleton’s commitment to delivering software that meets Consumer Financial Protection Bureau third-party vendor compliance recommendations and consumer privacy and security requirements.
In 1996, Carleton introduced LoanSmart Lending Solutions that included Web applications and software modules that could be integrated with loan origination systems to perform compliant loan calculations and the seamless generation of lending documents.
Officials insisted that now 20 years later, Carleton’s LoanSmart solutions are used by more than 125 lending software providers to meet the compliance requirements of their clients.
“Carleton’s ability to adapt our software and support to the ongoing changes in technology, lending and compliance has made us the preferred partner of loan origination software providers who recognize the importance of having long-term compliance support for their lenders,” Carleton president and chief executive officer Pat Ruszkowski.
“We renamed our next generation lending solutions using the Carleton name to reflect our company’s 45-plus year compliance leadership in the lending industry,” Ruszkowski continued.
“Our compliance support and active dialogue with the federal and state regulators to assist our clients in this complex and highly regulated lending environment is built in to all our lending solutions,” he went on to say.
To learn more about Carleton Lending Solutions, go to www.carletoninc.com or contact Rob Hosinski at (800) 433-0090, ext. 245 or Rhosinski@carletoninc.com.
FactorTrust finalized a partnership with Equifax on Tuesday to provide its customers with an improved view of consumers’ ability to repay (ATR).
Executives explained that the collaboration blends data from the alternative credit bureau with traditional credit data from one of the nation’s largest credit reporting agencies. As a result, the companies indicated finance companies will have access to the comprehensive credit profiles needed to assess an underbanked consumer’s residual income and comply with forthcoming regulations regarding a consumer’s ability to repay loans.
FactorTrust’s Ability to Repay product, LendProtect ATR can provide finance companies with a robust solution that can accelerate their ability to add the information and tools needed to meet the anticipated ATR underwriting requirements from the Consumer Financial Protection Bureau. The flexible platform simplifies integration of core data sets such as existing credit obligations from FactorTrust and Equifax with validated income and living expense data to calculate residual income, a key component of the CFPB’s proposed rulemaking.
In addition, the platform can help finance companies to manage compliance, reporting and maintain data on underwriting decisions.
“We are committed to continually improving our solutions with quality data that helps our customers,” FactorTrust chief executive officer Greg Rable said.
“Our partnership with Equifax not only benefits lenders, but also borrowers,” Rable continued. “It’s important that everyone have access to financial services when needed, and it is important for lenders to make the most informed decisions possible when offering loans to consumers.”
LendProtect ATR will include new predictive data attributes and scores. These components will capture borrowing capacity, debt-to-income ratio and other measures related to a consumer’s ability to repay in order to enable improved credit risk management.
“Lenders will now have more insight into a consumer’s credit history, enabling the lender to offer smart, profitable lending solutions with confidence,” FactorTrust said.
Both the Department of Justice and the Consumer Financial Protection Bureau sent out press releases on Tuesday afternoon reporting the settlement the agencies made to resolve allegations that Toyota Motor Credit engaged in a pattern or practice of discrimination against African-American and Asian/Pacific Islander borrowers in auto financing.
While each regulator highlighted similar points — how the captive must restrict dealer markups and send restitution back to contract holders — a key statement was not included in the material from the Justice Department but was shared by the CFPB. It’s a statement that perhaps might give finance companies of all sizes a moment to reflect.
“The investigation did not find that Toyota Motor Credit intentionally discriminated against its customers, but rather that its discretionary pricing and compensation policies resulted in discriminatory outcomes,” the CFPB said.
SubPrime Auto Finance News reached out to both regulators for an explanation about the difference in the settlement press releases but did not receive replies.
Toyota Motor Credit officials reiterated their stance about the investigation and settlement as the agencies made their announcement.
“We want to emphasize that TMCC does not tolerate discrimination of any kind, even perceived or unintentional, from its employees or business partners,” captive officials said in a statement to SubPrime Auto Finance News. “This principle extends to the company’s fair lending practices.
“While TMCC respectfully disagrees with the agencies’ methodologies to determine whether industry lending practices have been discriminatory, the company shares the agencies’ commitment to ensuring that consumers can count on competitive and fair auto financing options,” Toyota Motor Credit officials added. “The actions TMCC will take under this agreement are intended to further that commitment.”
In reacting to the settlement, the American Financial Services Association used the term “some progress” when the organization sent a statement to SubPrime Auto Finance News on Wednesday.
“The announcement of the voluntary settlement entered into by Toyota Motor Credit Corporation with the Consumer Financial Protection Bureau and the Department of Justice represents some progress,” AFSA officials said.
“However, we continue to advocate for a universal, market-based solution to dealer compensation rather than the use of one-off enforcement actions, based on flawed methodologies, to address potential disparate impact,” they continued.
“The American Financial Services Association stands committed to working with the CFPB to resolve this issue and reach a solution that is in the best interest of millions of U.S. consumers,” AFSA went on to say.
Growing burden on finance companies
The CFPB did point out that its latest coordinated action with the Justice Department in the auto finance space marks the fourth one since December 2013.
So far, the bureau and DOJ have reached settlements with Ally Financial, American Honda Finance and Fifth Third Bank. The agreements included not only contract holder restitution but also curtailment of dealer markup practices.
This series of events likely has pushed auto finance companies of all sizes to try to modify their practices in order to be compliant with the demands of the CFPB and other federal regulatory agencies. AFSA president and chief executive officer Chris Stinebert discussed what finance company leaders are potentially facing during a conversation with SubPrime Auto Finance News back in December.
“Auto finance companies for years have been regulated in every state where they operate and have worked hard to adhere to strict compliance rules and regulations in those various states,” Stinebert said.
“Now the federal government, namely the CFPB, is adding another layer of complexity with rulemaking and certain enforcement actions which seem to be an overreach to the auto finance industry and certainly unfair to law-abiding companies who are targets of the enforcement actions,” he continued.
“As a result, auto finance companies are awash in state and federal compliance standards,” he went on to say. “Companies have had to beef up compliance staffs which means hiring additional lawyers, paralegals and staff professionals to support their efforts to be compliant on both the federal and state levels.”
With agreements involving some of the largest players in the auto finance space and including millions of dollars in actions, organizations such as AFSA are trying to convey a strong message to lawmakers, regulators and other important parties within the Capitol Beltway about the growing burden these intensifying compliance mandates are placing on finance companies
“The message AFSA is trying to convey to lawmakers, regulators and other important stakeholders inside and outside the Beltway is something that regulators do not think of when they are writing regulations for our industry. That is, in order to enact all of these rules it takes money,” Stinebert said.
“Unfortunately, more often than not, the unforeseen costs of overzealous regulations ultimately flows to the customer and what they are paying for the cost of access to credit,” he continued.
“The cost of credit, determined by credit scores and such factors as the length of time on a certain job or the length of time at a certain residence, can lead to access to affordable credit for the customer,” he went on to say. “But the cost of beefing up compliance staffs by adding more professionals and IT systems, squeezes the margins and ultimately raises the cost of affordable credit.”
The ultimate cost on vehicle buyers as regulators intensify their actions is a point raised by the National Automobile Dealers Association late Tuesday in a statement to SubPrime Auto Finance News. An NADA spokesman reiterated the solution the association has tried to give the CFPB.
"The CFPB's campaign to eliminate auto loan discounts has already cost consumers money and eroded the rights that every consumer has to negotiate and benefit from a competitive marketplace,” NADA said.
“As long as those rights are under assault, NADA will continue to urge the CFPB to adopt a solution, developed by the U.S. Department of Justice, that fully addresses fair credit risk in auto lending without needlessly harming consumers,” the association added.
This week, Scan123 announced the integration of its electronic document management system with Auto/Mate Dealership Systems.
Officials said the integration can help dealers transition to a paperless environment, streamline workflow and help them to comply with federal law.
“Integrating our system with Auto/Mate’s DMS was inexpensive and relatively easy due to the Open/Mate integration program, which is based on open standards,” said Gordon Vavrek, sales manager with Scan123.
“Integration with a top tier DMS provider allows us to expand our customer base and improve our service to our current customers that use Auto/Mate's DMS,” Vavrek continued.
Scan123's electronic document management solution can delivers these other benefits to dealers:
— Increases productivity, multiple users can access the same file at the same time with a quick search
— Backs up all files in digital format, ridding stores of paper.
— Reduces filing costs associated with folders, filing cabinets and storage fees
— Restricts access to sensitive files with granular user permissions
— Allows secure access to files from anywhere using a 256-bit encrypted Internet connection
"The ability to instantly retrieve information from a DMS allows employees to quickly answer inquiries from partners and customers, increasing productivity and customer satisfaction," said Mike Esposito, president and chief executive officer of Auto/Mate Dealership Systems.
“With a document management solution, your employees may never have to say, ‘Let me look that up and get back to you’ again,” Esposito added.
Some components of Toyota Motor Credit’s settlement with the Department of Justice and the Consumer Financial Protection Bureau released on Tuesday are similar to what the regulators reached with American Honda Finance last summer.
The Justice Department and the CFPB explained the settlement is to resolve allegations that Toyota Motor Credit engaged in a pattern or practice of discrimination against African-American and Asian/Pacific Islander borrowers in auto financing.
Through the settlement, TMC agreed to limit “significantly” the discretion of dealers to charge interest rate markups on vehicle installment contracts. Furthermore, officials indicated the captive also committed that it will not increase the interest rates it quotes to dealers in order to fund additional nondiscretionary dealer compensation implemented as part of the settlement.
The settlement also provides $19.9 million in compensation for borrowers who took out financing between January 2011 and January of this year and paid higher markup based on the alleged discrimination.
Additionally, TMC will pay up to $2 million to African-American and Asian/Pacific Islander borrowers with markup disparities while the captive is preparing to implement the new policies.
Officials noted the new policies must be in place by August.
Captive finance company response
Coinciding with the regulators’ announcement, Toyota Motor Credit shared its view of the situation on Tuesday.
“TMCC determined that a voluntary agreement was the preferred resolution of the agencies’ review because it helps preserve consumer financing options while fairly compensating its dealer partners and upholding its commitment to fair lending practices. TMCC is the latest of several lenders to enter into such an agreement,” captive finance company officials said.
“TMCC does not tolerate discrimination of any kind, even perceived or unintentional, from its employees or business partners — this principle extends to fair lending practices,” they continued.
“While TMCC respectfully disagrees with the agencies’ methodologies to determine whether industry lending practices have been discriminatory, the company shares the agencies’ commitment to ensuring that consumers can count on competitive and fair auto financing options,” the finance company went on to say. “The actions TMCC will take under this agreement are intended to further that commitment.”
The captive also discussed how the investigation unfolded; a process Toyota Motor Credit said began in 2013.
“During their review, the agencies did not contend that TMCC intentionally discriminated against its customers,” the captive said. “Accordingly, TMCC denies any wrongdoing and notes that this voluntary agreement does not include an assessment of civil money penalties.
“As an indirect lender, TMCC has no visibility into the race or ethnicity of its customers or credit applicants, and these factors have no bearing on the company’s credit or pricing decisions,” the company added.
Foundation of investigation
Officials explained TMC’s business practice — similar to what is utilized by most captive finance companies — allows dealers discretion to vary a loan’s interest rate from the price the captive initially sets based on the borrower’s objective credit-related factors. Regulators contend dealers receive greater payments from TMC on loans that include a higher interest rate markup.
The coordinated investigations by the department and the CFPB that preceded Tuesday settlement determined this system of subjective and unguided pricing discretion directly results in Toyota’s qualified African-American and Asian/Pacific Islander borrowers paying more than qualified non-Hispanic white borrowers.
To address this system, TMC agreed to change the way it prices its loans by limiting dealer markup to 125 basis points (or 1.25 percentage points) for contracts of 60 months or less, and to 100 basis points (or 1 percentage point) for loans greater than 60 months.
The DOJ and CFPB anticipate that TMC’s new caps on discretionary markups will substantially reduce or eliminate disparities in markups based on race or national origin.
The markup stipulations are similar to what the regulators ordered Honda Finance to implement last summer.
The settlement resolves claims by the Justice Department and the CFPB that Toyota Motor Credit discriminated by charging thousands of African-American and Asian/Pacific Islander borrowers higher interest rates than non-Hispanic white borrowers.
The agencies claim that the captive charged borrowers higher interest rates because of their race or national origin, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk. The United States’ complaint alleges that the average African-American victim was obligated to pay more than $200 more during the term of the loan because of discrimination, and the average Asian/Pacific Islander victim was obligated to pay more than $100 more during the term of the loan because of discrimination.
The Equal Credit Opportunity Act (ECOA) prohibits discrimination in all forms of lending, including auto financing. The captive’s settlement with the Justice Department, which is subject to court approval, was filed on Tuesday in the U.S. District Court of the Central District of California in conjunction with the Justice Department’s complaint.
The captive resolved the CFPB’s claims by entering into a public administrative settlement.
“We are dedicated to promoting fair and equal access to credit in the auto finance marketplace,” CFPB director Richard Cordray said. “Toyota Motor Credit is among the largest indirect auto lenders, and we commend its industry leadership in shifting to reduced discretion to address the significant fair lending risks.”
In addition to the payments of at least $19.9 million to African-American and Asian/Pacific Islander borrowers, the settlement also requires Toyota Motor Credit to improve its monitoring and compliance systems. The settlement allows the captive to experiment with different approaches toward lessening discrimination and requires it to regularly report to the department and the CFPB on the results of its efforts as well as discuss potential ways to improve results.
“Toyota’s reforms will level the playing field to ensure that all eligible borrowers — regardless of their race or national origin — can sign auto loans with fair terms and reasonable interest rates,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division.
“While dealerships deserve fair compensation for the valuable customer service they provide, federal law protects consumers against higher price markups simply because of what they look like or where they come from,” Gupta continued. “We commend Toyota for crafting a new compensation system that strikes an appropriate balance for dealers and consumers.”
Distribution plan
The settlement provides for an administrator to locate victims and distribute payments of compensation at no cost to borrowers whom the department and the CFPB identify as victims of the captive’s actions.
The Justice Department and the CFPB will make a public announcement and post information on their websites once more details about the compensation process become available. Borrowers who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the department or the CFPB at this time.
“No consumer should be forced to pay more money for a loan because of their race or national origin,” said U.S. Attorney Eileen M. Decker of the Central District of California. “This settlement resolves our claims by providing compensation for affected consumers and seeking to ensure that future loans funded by Toyota reflect equal terms.”
