One of the founding members of the Automotive Intelligence Council is tackling perhaps one of the most daunting challenges ever — how collections will proceed once the coronavirus pandemic subsides.
SubPrime Auto Finance News is hosting a free webinar featuring DRN executive vice president and general manager of fintech Jeremiah Wheeler, who will delve into five crucial takeaways to help auto-finance companies and recovery firms navigate through collections and repossessions after COVID-19.
The free session is scheduled for 2 p.m. ET on April 14.
“Now more than ever, making right party contact with debtors is the key to improving business models. DRN has historical vehicle location data that extends well before the pandemic, during and now after that can help you locate debtors with better addresses,” DRN said.
“DRN’s vehicle location data transforms automotive recovery processes and substantially increases portfolio returns,” the company continued. “We’ll share client case studies showing how using our data has changed their business processes. We’ll explain how DRN’s exclusive data and analytics helps customers know more, faster and what it can mean for you in the times to come.”
The key takeaways Wheeler plans to share during the webinar:
• Prepare your business now for actions post COVID-19.
• Historical data can be the key to finding the debtor.
• Making right party contact can help mitigate losses.
• Delinquency is not always the end of the road for your customer.
• Increase portfolio returns by transforming the recovery process.
Also set to join Wheeler for the session to offer their perspectives are Dean Berendt, vice president of collections for Landmark Credit Union, and Rod Arends vice president of service center operations for Southeast Toyota Finance.
And on Wednesday, Wheeler confirmed that also set to join the webinar will be Jan Stieger, executive director at Receivables Management Association, who will share the latest update on moves made by state and federal regulators.
Registration for the webinar can be completed on this website.
Hudson Cook partner Lucy Morris cautioned the financial-services industry not to set aside completely a task that might have been a top priority before the coronavirus pandemic arrived.
“As the public health crisis spreads and worsens, one might think that law enforcement agencies like the Consumer Financial Protection Bureau and Federal Trade Commission would pause enforcement and supervision work so that companies can focus on the health and safety of customers and employees,” Morris wrote in a commentary posted on Hudson Cook’s website.
Morris then added, “the CFPB and other agencies are still very much open for business.”
In separate announcements, the regulators that closely govern auto financing and other segments of financial services gave pledges to work with firms that also have a long list of crisis-connected tasks.
Federal Trade Commission chairman Joe Simons first indicated the FTC’s staff is working hard with other enforcement authorities and stakeholders to stop scammers and other unfair and deceptive business practices during the pandemic.
“We will not tolerate businesses seeking to take advantage of consumers’ concerns and fears regarding coronavirus disease, exigent circumstances, or financial distress,” Simons said in a news release.
In addition, Simons noted that the FTC will remain flexible and reasonable in enforcing compliance requirements on companies that may hinder the provision of important goods and services to consumers, and will consider good faith efforts to provide needed goods and services in making enforcement decisions.
“The FTC is ready to assist businesses that may seek guidance about compliance obligations on consumer protection issues during this unprecedented time,” Simons said.
The latest FTC statement is available here.
Meanwhile over the CFPB, the bureau announced that it is providing flexibility to enable financial companies to work with customers in need as they respond to the COVID-19 pandemic. The CFPB said it is postponing some data collections from industry on bureau-related rules to allow companies to focus on responding to consumers in need and making changes to its supervisory activities to account for operational challenges at regulated entities.
“As consumers seek temporary relief from lenders, the pandemic is impacting the operations of financial companies that are eager to help their customers during this unprecedented time,” CFPB director Kathleen Kraninger said in a news release.
“Our actions today are temporary and targeted to support consumers by allowing financial companies to focus their resources on assisting consumers,” Kraninger continued.
“The bureau, along with our state and federal partners, have released prior guidance encouraging financial institutions to work constructively with borrowers and other customers affected by COVID-19 to meet their financial needs. We will continue to issue additional guidance and policies to facilitate the ongoing collaborative relationship between companies and their customers during this time,” Kraninger went on to say, in a reference to this previous recommendation from federal officials.
The CFPB also announced that as a result of operational challenges confronted by institutions due to the pandemic, the bureau said it will work with affected financial institutions in scheduling examinations and other supervisory activities to minimize disruption and burden.
When conducting examinations and other supervisory activities and in determining whether to take enforcement action, the bureau indicated that it will consider the circumstances that entities may face as a result of the COVID-19 pandemic and will be sensitive to good-faith efforts demonstrably designed to assist consumers.
The latest statements from the CFPB about quarterly reporting as well as other investigative and enforcement actions can be found here.
On Friday, TransUnion shared its latest information about the depth and speed the coronavirus pandemic is impacting family budgets.
TransUnion reported six in 10 Americans (59%) said their household income has been negatively impacted by the COVID-19 pandemic — an increase of 53% from those who reported impact during the previous week.
The credit bureau indicated an additional 10% of U.S. adults said they expect their household income will suffer in the future. The newly released research from TransUnion found that consumers from the youngest generations, as well as those persons least informed about their credit, perceive the greatest financial hardship.
TransUnion explained that it has initiated a survey of adults in the U.S. and abroad to better understand the financial impact of COVID-19 on consumers. The most recent U.S. survey of more than 3,100 adults marked the second in the ongoing research.
“Whether it’s their health, financial well-being or changes in day-to-day living, the lives of tens of millions of people in the U.S. and abroad have been dramatically changed,” said Amy Thomann, head of consumer credit education for TransUnion.
“The aim of our weekly consumer research is to better understand the financial impact of the COVID-19 pandemic and better inform consumers, businesses and government decisions during these unprecedented times,” Thomann continued in a news release.
TransUnion’s research pointed out that the youngest generations, particularly millennials and Gen Z, were most impacted financially by the COVID-19 pandemic. While 59% of Americans said their household income was negatively affected by the virus, TransUnion discovered the percentages were more pronounced for millennials (68%) and Gen Z (63%).
Furthermore, the research showed that millennials (79%) and Gen Z (74%) were among the most concerned about their ability to pay bills and loans in the next month. This compared to 70% for all respondents and 53% for Baby Boomers.
TransUnion also acknowledged the concern is growing.
Survey responders indicated an inability in the near future to pay bills and loans averaging $1,031 — a 14% increase from last week’s average of $903. Much of the payment problems are likely due to the fact that 36% of respondents said their work hours have been reduced.
Comparatively, last week 45% of respondents said their work hours were reduced. However, this improvement is marred by the fact that 16% of respondents said they lost their job compared to 9% of the survey results uncovered a week earlier.
TransUnion also emphasized its survey findings reinforced the need for further consumer education in relation to financial options.
Of those survey respondents struggling to pay bills, nearly one quarter of the population doesn’t know what they could do to address the situation. This level of uncertainty increased to 41% among consumers that do not know their credit scores.
Of those consumers who do not know their credit scores, 80% have not contacted their lenders to discuss options, versus 63% for the overall population.
“Consumers are facing many unexpected challenges and it’s natural that people are concerned about their finances. It is clear that those with the least knowledge about their financial situation or means to act have been the hardest hit. We encourage consumers looking to minimize potential negative impacts of the pandemic on their credit to visit TransUnion’s COVID-19 website,” Thomann said.
TransUnion’s research and credit education tools will be updated in real-time on its COVID-19 website as the company continues to support consumers and businesses from around the globe.
APCO Holdings, a provider and administrator of automotive F&I products and home to the EasyCare and GWC Warranty brands, announced on Friday that the company will begin providing free access to digital retailing tools and online training courses designed to help dealers as the coronavirus crisis impacts normal business operations.
Recognizing the importance of being able to do business as close to usual as possible, APCO said that the company pledges to assist and support its dealer partners with the launch of a multi-pronged initiative to help tackle and overcome challenges stemming from the COVID-19 pandemic.
“COVID-19 is impacting our clients in ways that no one could have foreseen. With conditions changing daily, we want to make sure our partners have the tools they need to continue to serve their community,” APCO Holdings chairman and chief executive officer Fin O’Neill said in a news release.
“Our priorities are taking care of our team while continuing to fulfill our fundamental role serving our customers,” O’Neill added. “We continue to provide the important services our dealers count on, and we are offering additional assistance, services and support they need during this difficult period.”
APCO has partnered with video solutions provider Covideo to give 60 days of access to their video messaging tool at no cost for all their dealer partners who currently offer F&I solutions through the EasyCare and GWC brands. This marketing tool can allow dealers to send personalized video messages via text, email, or social media and will enable dealers to provide customers with virtual test drives and walk-arounds when they are unable to come to the lot in person.
“Covideo’s robust video platform will allow dealers to continue to build their relationships with potential buyers without losing that personal touch, through detailed, custom video messages that walk them through the decision-making process remotely,” O’Neill said.
APCO has also launched a comprehensive live webinar series available to dealers at no cost, developed and led by their veteran in-house training team.
Covering a range of advanced F&I and selling strategies, these online courses range in length from 30 minutes to one hour and are designed to give F&I and sales teams the skills they need to grow their knowledge base during idle time in our present environment.
“Some of the most successful dealers in the nation have developed their F&I and sales strategies based on our training and development tools,” O’Neill said.
“We’ve taken the essentials from our comprehensive course offerings and created a series of sessions that confront some of the challenges every dealer faces on a day-to-day basis,” he continued. “We encourage our partners to take full advantage of this opportunity so that they’re ready to emerge from this crisis with the right tools and knowledge to forge ahead.”
For further information about APCO, go to www.gwcwarranty.com and www.easycare.com.
As everyone reading this is well aware, the world is currently experiencing extraordinary circumstances that have upended daily life — now, there’s no such thing as “business as usual.” One question being posed by banks, finance companies and other lenders everywhere is, “How do we best care for our customers during this time of unprecedented economic and social upheaval?”
Caring for your customers involves many decisions, both large and small, in every single area of your institution. Along with decisions related to areas such as whether to close branches, the amount of cash to keep on hand and possible lending modifications — among hundreds of others — choices about how to safeguard borrowers as well as your institution from undue risk are more important than ever.
Protecting your portfolio now
With that said, portfolio protection is our greatest area of expertise, so it’s a good place to start. We’ve heard from many of our partners seeking guidance on how to handle their portfolio tracking and insurance programs now. Each institution is unique, so there are few blanket statements to make about specific program details that would apply to all; if you have questions, we encourage you to contact your State National Client Executive to explore your best solutions. What applies to everyone, though, is that mitigating risk in your portfolio is critical to weathering this storm as well as recovering successfully when the storm has passed.
One in eight drivers in the U.S. is uninsured — a number that will likely grow as consumers across the country face increasing financial hardships. Given that, as well as many unanswered questions about what will happen with the U.S. and world economy, making sure your auto and mortgage collateral is properly insured is essential. It’s part of protecting your institution, as well as protecting your borrowers, both now and in the future.
The question is: What is the fairest, most efficient way to protect both while also best caring for your borrowers and creating the best possible customer experience?
Having partnered closely with lenders of all sizes, all around the country, for almost half a century, it is our experience that collateral protection insurance (CPI) stands out as the clear answer — IF it is part of a well-run, well-managed program.
Some insurers may suggest that blanket insurance is the way to go to avoid borrower noise, and it may seem so on the surface — but there’s more to how it affects your customers’ experience than meets the eye at first glance.
Who should pay?
Most of your borrowers do comply with the promise they made to maintain insurance on the car or home they financed. But with a blanket policy, ALL borrowers — those who keep their property insured and those who don’t — bear the cost. Depending on your location that might happen directly or indirectly, but either way, the cost is shared by all of your customers. Our philosophy is that serving the greatest good means taking care of your borrowers collectively, as a whole — keeping costs as low as possible for the majority while still providing adequate protection for all.
But what about noise?
With a well-run tracking program using state-of-the-art automation that updates insurance data in real time, borrowers only hear from the provider when there is no proof of insurance in place. The vast majority of borrowers will never receive a notice or even be aware the program exists.
Even those who haven’t provided insurance information, or those whose information is incorrect or insufficient, receive multiple chances to correct the deficiency before a policy is placed. And again, with a well-run program, it is exceedingly easy for borrowers to submit their insurance information, through multiple channels, with updates recorded immediately.
When it comes to protecting your collateral, don’t let scare tactics or publicized examples of poorly managed programs make the decision for you — or your borrowers. A well-run tracking and lender-placed insurance program protects not only your portfolio, but also your customer experience and the financial health of your institution.
State National considers our business partners just that — partners. Our goal is and has always been to help our clients achieve success, both because when you are successful, we are successful — but also because we truly care about our business partners and believe in doing whatever we can to help them, their customers, and their communities.
In the upcoming weeks and months, we will be sharing resources and information about many areas of concern to lending institutions in these volatile times. Topics will vary, depending on what pressing needs may be in the moment. Some will have little to do with the products and services we offer — they will be presented simply for the purpose of offering assistance you need to navigate what’s happening.
Be on the lookout for more resources to come, including topical information and advice developed in conjunction with our industry partners. In the meantime, please stay safe, and let us know how we can help you and your financial institution not only survive but thrive in the unpredictable days and months ahead.
Trace Ledbetter is executive vice president at State National Companies, where he directs and oversees delivery of all services and products for lender services, including customer relationship management, underwriting and claims.
In light of how collections are being impacted by the coronavirus pandemic, FICO is hosting a free webinar on Tuesday to help the financial services community.
Set to be a part of the session are Leah Dempsey, vice president and senior counsel for federal advocacy at ACA International, and Daniel Nestel, senior director of government relations at FICO, for a discussion about the current and future outlook of key legislative and regulatory issues confronting collections professionals.
Topics during the session set for 1 p.m. ET on Tuesday will include:
• The latest on the CFPB debt collection proposal
• The impact of federal robocall legislation and regulations on collection activities
• The potential for FCC action related to the Telephone Consumer Protection Act; and recent proposals targeting medical debt reporting
• An update on the federal, state and local public policy activity related to the COVID-19 health emergency impacting the collections industry
“Decisions made on Capitol Hill and in federal agencies are playing a major role in shaping the future of the collections industry. Be informed about these changes and register today,” FICO said.
Webinar registration can be completed on this website.
While auto-finance providers communicate with their customers impacted by the coronavirus pandemic, six different federal regulatory agencies encouraged institutions to work constructively with borrowers affected by COVID-19 while providing additional information regarding loan modifications.
Meanwhile, Hudson Cook partner Anastasia Caton shared exclusive insight with SubPrime Auto Finance News about what those recommendations and upcoming actions by lawmakers might mean for collections and repossessions.
The agencies not only encouraged financial institutions to work with borrowers, they said they will not criticize institutions for doing so in a safe and sound manner.
The regulators also said they will not direct supervised institutions to automatically categorize loan modifications as troubled debt restructurings (TDRs). The joint statement went on to provides supervisory views on past-due and nonaccrual regulatory reporting of loan modification programs.
Along with the Federal Reserve, the other agencies that joined in this week’s statement included:
— Conference of State Bank Supervisors
— Consumer Financial Protection Bureau
— Federal Deposit Insurance Corp.
— National Credit Union Administration
— Office of the Comptroller of the Currency
“The agencies view prudent loan modification programs offered to financial institution customers affected by COVID-19 as positive and proactive actions that can manage or mitigate adverse impacts on borrowers, and lead to improved loan performance and reduced credit risk,” the regulators said in their statement.
The statement reminded institutions that not all modifications of loan terms result in a TDR.
The regulators explained short-term modifications made on a “good-faith basis” in response to COVID-19 to borrowers who were current prior to any relief are not TDRs. This includes short-term — for example, six months — modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant.
The update went on to mention the agencies’ examiners will exercise judgment in reviewing loan modifications, including TDRs, and will not automatically adversely risk rate credits that are affected, including those considered TDRs.
“Regardless of whether modifications are considered TDRs or are adversely classified, agency examiners will not criticize prudent efforts to modify terms on existing loans for affected customers,” officials said.
Insight from Hudson Cook
Late on Wednesday, Caton sent this message to SubPrime Auto Finance News. Below are her comments in their entirety:
The proposals floating around in Congress (some of which are ideas, and some of which are proposed legislation) relating to debt collection are well-intentioned. Millions of Americans are very suddenly without work and without any way to make ends meet. Add to that the extreme stress of health-related uncertainty and children being out of school, and they are not likely to devote their attention and, in many cases, limited resources to repaying debt. The proposals and a lot of recent regulator guidance acknowledge that reality.
The most recent bill in the Senate (introduced by Sen. Sherrod Brown) would amend the federal FDCPA to effectively prohibit debt collectors (not creditors) from actively attempting to collect debt, including by repossession, during a disaster period. It would allow debt collectors to contact consumers in writing, but for informational purposes only. The moratorium on collection would last for 120 days after the end of the disaster period. Most importantly, though, Senator Brown’s bill would not impact the ability of a creditor to directly collect from its own customers or to repossess vehicles.
Rep. Maxine Waters released a memo that goes much further, including by proposing to suspend all consumer and small business credit payments during a pandemic, to suspend all negative consumer credit reporting during the pandemic and for 120 days after the pandemic ends, and to prohibit collection of all consumer debt, including medical debt, and repossessions during the pandemic and for 120 days after it ends. These proposals would apply generally to all creditors and debt collectors and would likely have a seismic impact on the consumer credit industry. Rep. Waters’ proposals are aggressively aimed at easing the burden on consumers during this time of uncertainty. Important to note, though, is that they are not part the legislative process (yet).
As of this morning (March 25), it appears that Congress and the White House have struck a deal on a stimulus package. At this time, it does not appear that either Sen. Brown’s bill or Rep. Waters’ proposals will be a part of the stimulus package. That does not mean they will not be a part of later legislation addressing the ongoing crisis, especially as circumstances evolve. If there is anything COVID-19 has taught us, it is that everything can change in the course of one day. And, states could still take action. Nevada, for example, has banned all collection activity by licensed collection agencies in the state. Other states have been more flexible, including by encouraging creditors and collectors to ease their collection practices and work with customers experiencing financial distress, and by expressly allowing employees to work from home without (in some states) needing a branch office license.
With the potential looming for more aggressive steps to limit collection, auto finance companies should consider how they might revise their collection strategies, including by curtailing collection activity, reassessing repossession policies, and pivoting to customer assistance programs (e.g., payment accommodations and modifications) as the primary objective of customer outreach. By working with customers using empathy, sensitivity, and creativity, auto finance companies will draw less potentially negative attention from state and federal regulators and legislators (at the same time generating good will with customers who are under an enormous amount of stress right now). In fact, regulators at both the state and federal level have encouraged creditors to take all steps necessary to accommodate customers, and have indicated that they will limit regulatory scrutiny of creditors that actively work with customers to mitigate financial distress.
I will end by saying that auto finance companies also employ millions of Americans. Servicing and collection activities can mostly take place in remote locations (especially given the easing of state regulations relating to doing business at a licensed location) without jeopardizing the health or safety of employees. Auto finance companies therefore are extraordinarily fortunate to be able to continue to employ people through this unusual and uncertain crisis. Consumer credit trade associations are hard at work bringing this fact to the attention of state and federal regulators and legislators.
The American Recovery Association issued a message late Tuesday, acknowledging the immense problem the coronavirus pandemic is causing when it comes to collections and vehicle repossessions.
As more states and municipalities issue stay-at-home orders, ARA has tried to get clarity from officials about how businesses involved with repossessions and recovery can function under these circumstances. Thus far, ARA said, “We have made inquiries to every governor that has made a stay at home proclamation for clarification on whether or not the repossession industry is an essential or life-sustaining business and we have yet to hear back from them.
“Our discussions with attorneys and accountants have proven to be just as confusing. They are also unable to get clarification from the federal government on most of the new laws and regulations passed in the last two weeks,” ARA continued.
“We find it very difficult to believe that a judge or jury will offer our industry much relief under these guidelines when we suggest we are operating as an essential business per the guidelines of the U.S. Department of Homeland Security,” ARA went on to say. “It may be that a client will offer us an indemnification that should one of our employees become ill or, even worse, die from an interaction with a consumer or vice versa.”
Bottom line is, as an agency owner, it is your responsibility to protect the well-being of your employees and the consumers your company comes in contact with,” ARA added.
The association closed its latest message by recommending repossession agencies send letters to customers and clients, reiterating the individual company’s policy in regards to dealing with the handling of personal property, the release of collateral and storage of vehicles left on your property during this crisis.
ARA has a collection of online resources for agencies to leverage that can be downloaded here.
Furthermore, ARA president Dave Kennedy and executive director Les McCook will be hosting an open industry webinar to have these questions and more answered in times of uncertainty. The session is scheduled for 2 p.m. ET on Thursday.
Agencies can register for the webinar here.
With guidelines to contain the spread of COVID-19 also suffocating regular activity of financing and retailing vehicles, the auto-finance industry continues to make adjustments to shore up their businesses and maintain contact and services to customers.
Cherokee Media Group gathered together the latest information to surface since Monday. To add your company’s operational update to this news roundup, send a message to nzulovich@cherokeemediagroup.com.
Here is the latest rundown:
defi SOLUTIONS
In addressing what we can and must do at this unique time, defi SOLUTIONS has begun seeking input from our clients on how we can best serve them at this time.
Our Priority
Right now, and as always, the priority of defi is to ensure the health and safety of the individuals, companies, and industries that comprise and support the defi COMMUNITY of lenders, partners and defi team members. We are continuing to maintain operational readiness and to support the important work of our clients as they continue to address the needs of our communities at large. Led by our Executive Leadership Team and informed by our Pandemic Preparedness Task Force, defi SOLUTIONS is monitoring closely the COVID-19 situation, domestically and internationally, to assess evolving risks and best prepare to respond accordingly.
As a first step beyond maintaining our systems and processes, we are offering our defi DIRECT product — waving all implementation and transaction costs — to those clients whose type of lending and current processes allow them to quickly implement and begin using.
What is defi DIRECT?
defi DIRECT lets lenders reach borrowers wherever they are, whenever they may be shopping – which right now means from the safety and comfort of their homes. Lenders create a personalized application that looks and feels the way they want their businesses to look and feel to consumers and which passes on the data and documents needed to return decisions to the borrowers in seconds.
According to defi client Landon Hammond, SVP, First Financial Bank:
“We saw growth of $7 million in one month after launching defi’s DIRECT product solutions. We couldn’t be happier. Implementation was easy. Getting our processes up and running was simpler than we expected. We’re now better able to attract new borrowers as well as support our existing customers thanks to defi SOLUTIONS services and team."
Why now?
We’ve been saying “now more than ever” for a long time, but this is truly a “now more than ever situation.” It’s imperative that lenders are available to borrowers and able to make a fast, right decision for their businesses.
Our first-step solution:
We're giving them defi DIRECT with free implementation (for those not currently using) and no transaction fees (for all clients) though June 30th.
What next?
As with every day, we continue to maintain our products and processes, take care of our clients and team members, and continue to look for opportunities to positively impact our community.
DRN
DRN continues to closely monitor the widespread impact of the coronavirus (COVID-19) pandemic. The safety and well-being of our employees, customers, partners and suppliers remain our top priority. Additionally, we are committed more than ever to supporting the critical communications, safety and security needs of our public safety and enterprise customers during this time.
A highly skilled team has been put in place and is closely monitoring the situation around the world. We have taken measures to manage the virus’ impact by the following guidance from the U.S. Centers for Disease Control and Prevention, World Health Organization and local governments. These measures include:
Working and Gathering Remotely
We have advised employees and contractors to work from home if they can. Our staff will utilize video-conferencing tools to stay productive and connected with colleagues, partners, and customers. Those with responsibilities that require them to be on-site to support the mission-critical efforts of our customers have received more information about performing their duties during this time.
Heavily Restricted Travel
Employees have been instructed to avoid domestic and international air travel, which currently unless it is business-critical, and all air travel requires leadership approval.
Avoiding Large In-Person Meetings and Gatherings
Employees have been asked to avoid attending large in-person meetings and gatherings. Further, we have canceled our in-person corporate events and will opt for virtual events and product showcases instead. Our staff will utilize video-conferencing tools to stay productive and connected with colleagues, partners and customers.
Implementing Extra Cleaning and Hygiene Measures
We have implemented are implementing additional cleaning procedures at our facilities and continue to share guidance from public health authorities to help prevent the spread of COVID-19.
Business Continuity Planning
We are committed to supporting our public safety and enterprise customers during this time, as we do during natural disasters and other widespread emergencies. Business continuity plans we already have in place are being expanded, so we can adjust to changing circumstances and restrictions while striving to ensure we can continue to operate and meet the varied needs of our customers. We encourage our customers to plan ahead and contact their account managers with questions.
Exeter Finance
It has been said that adversity is the true test of character. It’s easy to be well mannered and soft spoken on beautiful, sunny days when you don’t have a care in the world. But what we say and how we behave when times are tough speak volumes about who we really are.
At Exeter, not unlike companies across the nation and around the world, our most-recent test of character began about two weeks ago. The number of cases of COVID-19 was increasing and health concerns were growing. So, we joined many other organizations in announcing that we would immediately begin taking steps to protect the people who matter most to us.
On March 12, we initiated steps to have our employees work from home. Despite the challenges of implementing such a step, we told our team members that we were doing what we could to take care of them so they could continue taking care of our dealers and customers.
Today, nearly all of our employees are working remotely — still supporting auto dealerships, providing service to our nearly 400,000 customers and helping one another operate our business. It has taken flexibility and patience to get to this point, and candidly, we’re not all fully comfortable with everything yet. It is becoming the new normal, though, and I know it won’t take long for us to get used to our new routines.
Through it all, I have been encouraged by the commitment and ingenuity our employees have demonstrated as we find new ways to take care of our various stakeholders. Our Dealer Sales Managers are using Facetime, Skype and other technology to keep in touch with their dealers. Our Customer Service Representatives are taking calls at their kitchen tables. And our corporate team members are holding what seem like record numbers of conference calls to collaborate and manage our business!
I know it isn’t easy for anyone, least of all the people we serve. Yet, as an organization, we are adapting and adjusting — and will continue to do so for as long as it takes. Our Exeter team remains focused and ready to help, and we are grateful for the opportunity to work with you and be of service to your customers.
GM Financial
General Motors announced that it intends to draw down approximately $16.0 billion from its revolving credit facilities. This is a proactive measure to increase GM’s cash position and preserve financial flexibility in light of current uncertainty in global markets resulting from the COVID-19 pandemic. The funds will supplement the company’s strong cash position of approximately $15 billion to $16 billion expected at the end of March.
“We are aggressively pursuing austerity measures to preserve cash and are taking necessary steps in this changing and uncertain environment to manage our liquidity, ensure the ongoing viability of our operations and protect our customers and stakeholders,” said Mary Barra, GM chairman and CEO. “Over the past several years, we have made necessary, strategic decisions and structural changes that have transformed the company and strengthened the business, better positioning us for downturns.”
In addition, GM Financial has strong liquidity and capitalization. GMF had $24 billion of liquidity at the end of 2019 and expects to end the first quarter with similar levels of liquidity. Its liquidity level is targeted to support at least six months of cash needs, including new originations, without access to capital markets. GM Financial is managing below its target leverage ratios.
“GM Financial has prepared for times like this by maintaining a strong financial position and ready access to cash. We are confident that we will be able to navigate the challenges created by this environment without capital from GM,” said Dan Berce, GM Financial president and CEO.
GM is also suspending its 2020 guidance due to uncertainty around the business impact of the COVID-19 pandemic.
Hudson Cook
The legal team at Hudson Cook is increasing its Compliance Coffee Break series, adding more webinar sessions to address the ongoing and future impact of legal issues related to COVID-19.
The next session is set for Friday, focused on Bank Regulatory Compliance in the Shadow of COVID-19 and featuring Tom Quinn and Ryan Stinneford.
The next two webinars will discuss Payment Accommodations and Modifications and include Patty Covington, Anastasia Caton and Robert Gage. The fourth will be on Fintech Innovation Opportunities in the COVID-19 Era, with Cathy Brennan.
More details about the sessions as well as registration can be completed on this website.
Open Lending
Open Lending’s top priority during this time is to ensure the health and safety of our customers, community and employees. As more cases of COVID-19 appear globally and locally, we are relying on virtual meetings and our employees are working from home. That said, we are still fully functional with business taking place as usual. Our technology and infrastructure are designed to function securely in this remote fashion. We have tested our business continuity plan, and we will continue to serve our customers with the first-class service they expect.
While the circumstances of the COVID-19 pandemic are unprecedented, Open Lending’s Lenders Protection program was built to weather adversity. Our 20 years of proprietary loan performance data includes periods of similar economic downturn. During the great recession, a time when most financial institutions reverted to conservative lending practices, institutions using the Lenders Protection program where able to continue lending to their most vulnerable members.
To circumvent potential risk related to the current economic environment, Open Lending has already implemented risk mitigation changes to the Lenders Protection program. These modest revisions are intended to allow our clients to continue serving the automotive finance needs of their borrowers and protect the institution from the additional risk we foresee related to the COVID-19 pandemic.
We are grateful for the opportunity to continue serving the under-served in these trying times and encourage you to visit our website for more information.
RISC
We cannot avoid the news about COVID-19 and the uncertainty it is bringing to our lives. This virus has caused disruptions to not only our daily lives but, most certainly, the collateral recovery industry. In these challenging times, the compliance team at RISC would like to do our part and help support the industry agents on the frontlines. We realize that the pandemic and its economic impacts will slow assignments significantly. However, it is important to remember that this will not last for long. If we can find ways to weather the storm then we know there is going to be a significant workload in the near future. In fact, it is realistic to say there will be more work than we all can handle. As an industry, we need to help each other survive, prepare, and be ready for the favorable times to come.
To support the agent community, RISC will waive all membership fees including the CARS education subscription fees within the membership for current and new RISC Pro Members starting immediately through the end of May. Billing will resume the first week of June 2020. Our hope is that this will give some financial relief to agents and the chance to use the downtime to get staff trained and ready for when business turns back on.
RISC Pro is a membership for Agents that provides the ability to:
• To manage and store compliance documentation on the MBSi VendorConnect platform. Lenders can see the status and assign more efficiently using RecoveryConnect.
• Showcase a compliance profile and company listing in front of 40+ Lenders and Forwarders that are on the MBSi VendorConnect / RISC Pro platform.
• Quickly share a compliance profile directly with the Lenders on the platform or outside the MBSi platform via email.
• Have unlimited staff access to the CARS National Certification, Continuing Education, and Drivers Safety Certification for a small monthly "pay as you go" subscription rather than the full upfront certification cost.
Membership billing is currently on hold and will begin again the first week of June. There is NO cancellation fee. If agencies decide to cancel the RISC Pro Membership, any CARS certification completed between now and then will require you to pay in full to retain a valid CARS certificate. More details can be found in the RISC Pro Service Agreement at Registration.
For more information, visit www.RISCus.com or call (813) 712-7535.
RouteOne
All of us at RouteOne and MaximTrak want you to know that we remain committed to doing our best to serve you in the manner you deserve while observing best practices and guidance from authorities during the COVID-19 pandemic. We know you are doing everything you can to serve your customers best and we are, too.
Safety of Employees and Customers
We have been implementing measures to promote the health and safety of all of our employees and customers for some time now. Based on guidance received from the State of Michigan, the Center for Disease Control, and the World Health Organization, the following is a partial list of RouteOne actions we have implemented that may temporarily change how we support you:
1. We have restricted all domestic business travel.
2. Work from home protocols are in place, and we have instructed our staff to do everything they can to perform all business activities via phone, web-sharing, e-mail, etc.
Stability of Operations
We have confirmed resourcing and contingency plans to ensure continuity of operations with our hosting team and service desk.
Relief To Our Customers To Enable Remote Processes
RouteOne’s core credit application and eContracting solutions have always been and will continue to be offered at no charge to dealers. Additionally, RouteOne offers supplemental subscription products. These products are on a month-to-month basis, and a dealer can cancel and reactivate at any time, as circumstances change, allowing dealerships to administer their business as needed if forced to close or reduce operations because of mandates or business conditions related to COVID-19.
Outlined below are the actions RouteOne is taking, now through May 31 to further support dealers ability to transact with consumers online and from remote locations:
• Online Credit Applications: All RouteOne Digital Retail subscriptions reduced by 50%. These tools help engage with customers remotely, allowing them to submit lead information, apply for credit, and provide customer quotes.
• Menu Presentations: MaximTrak GO is available at no charge to MaximTrak Menu subscribers. MaximTrak GOTM allows dealer users to deliver a menu presentation to a consumer’s mobile device for the selection of protection products.
• Remotely eSign Contract Documents – Remote eSigning fees are waived. And, as always, RouteOne never charges for access to its base eContracting solution. Remote eSigning allows a consumer to securely review and electronically sign an eContract, along with associated RouteOne-generated ancillary documents, at a time and place of their choosing. RouteOne’s eContracting product is integrated to 100+ finance sources, with 25 offering Remote eSign support.
These measures will help ensure that a dealer’s consumers can complete as much of the transaction as possible from the convenience of their home or location of choice. RouteOne tools allow for self-administered flexibility for dealership staff to access the consumer’s information from RouteOne’s Deal Manager, either from the dealership or home office. RouteOne is also offering bi-weekly web training sessions on remote tools along with our general eContracting training sessions.
Digital Retail and Remote eSigning economic relief will automatically be reflected in your RouteOne billing statement. No action required by the dealer. MaximTrak Menu subscribers interested in enabling a remote menu experience with MaximTrak GO can reach out to support at support@maximtrak.com.
Please rest assured that we continue to monitor the situation and address our practices as needed. Ultimately, we are here to help in whatever ways we can to keep your business operating during these extraordinary times.
We thank you for the opportunity to serve you. You can reach any of the RouteOne Business Development team at https://www.routeone.com/salesteam, and we invite you to contact our leadership any time we can be of service.
Santander Consumer USA
Santander Consumer USA and Chrysler Capital announced several initiatives to support customers and colleagues as the spread of Coronavirus (COVID-19) affects our communities.
What we are doing for our customers: We are taking proactive steps to assist affected customers who are suffering financial hardship.
Our Customer Assistance Team is providing additional customer support, including:
—Expanded payment deferrals
—Late charge waivers
—Lease extensions
We are keeping customers informed about this evolving situation in several ways.
Santander Consumer USA customers should call (888) 222-4227 or log on to SantanderConsumerUSA.com for Coronavirus-related inquiries.
Chrysler Capital customers should call (855) 563-5635 or log on to ChryslerCapital.com for Coronavirus-related inquiries.
What we are doing for our dealers:
We have partnered with Fiat Chrysler Automobiles (FCA) to launch new incentive programs Including:
90 days to first payment on select FCA models
0% Annual Percentage Rate for 84 months on select 2019/2020 FCA models
Our business continuity contingency plans have allowed credit analysts, funders and other essential staff to work remotely, limiting the impact to dealers in the event we are required to close a site.
What we are doing for our employees:
The health and well-being of our colleagues and customers is a top priority for SC and Chrysler Capital. We are doing our part to help curb the virus spread and have instituted work from home and other dispersed work locations to support greater social distance. We also are taking additional steps to ensure a safe and healthy work environment for our colleagues including:
Increasing the frequency and scope of the cleaning protocols at all of our facilities
Eliminating non-essential travel
Established a Temporary Emergency Paid Leave Program that provides employees with up to 80 hours of additional paid time off to use – either continuously or intermittently, and before exhausting other paid time off – to assist with dependent care needs related to the Coronavirus
Providing $250 a week in pay premiums for frontline customer support workers to help defray additional costs incurred while coming to work during the pandemic
“During this unprecedented time, Santander Consumer and Chrysler Capital customers, employees, dealers and partners need our support and the assurance that we will assist them in the days ahead,” said Mahesh Aditya, president and CEO of Santander Consumer USA. “We believe that we have a responsibility to take the steps we are announcing today, and we will continue to work with all our stakeholders as we face the Coronavirus together.”
The SC leadership team, along with the Santander US leadership team, continues to monitor the situation closely and is following guidance from relevant authorities, including the Centers for Disease Control and Prevention (CDC), the World Health Organization (WHO) and various state and local governments.
Wells Fargo
Wells Fargo announced additional comprehensive steps to help customers, communities and employees grappling with the impact of COVID-19. The company has suspended residential property foreclosure sales, evictions and involuntary auto repossessions. Additionally, the Wells Fargo Foundation will increase its charitable donations to $175 million to help address food, shelter, small business and housing stability, as well as to provide help to public health organizations.
“The coronavirus is disrupting the daily lives of many people around the world, and Wells Fargo has taken — and will continue to take — the steps needed to support our customers, employees and communities during this difficult time,” CEO Charlie Scharf said. “We will continue to evaluate this fluid situation and take additional action as necessary.”
Wells Fargo is taking several other steps to meet the needs of customers, operate safely and effectively and reduce the risk to employees and customers, recognizing that the company provides critical and essential services to the stability of the economy and the financial wellbeing of customers.
Meeting customer needs
Wells Fargo is working on a daily basis to put measures in place to support the needs of customers impacted by COVID-19 in the most effective ways possible. Wells Fargo is suspending residential property foreclosure sales, evictions and involuntary automobile repossessions. The company also is offering fee waivers, payment deferrals and other expanded assistance for credit card, auto, mortgage, small business and personal lending customers who contact the company.
Additionally, Wells Fargo continues to take the action needed to ensure it can best serve customers, while also prioritizing employee and customer safety. The company is temporarily closing some branches, adjusting operating hours of branches, relocating employees to busier branches and utilizing drive up instead of lobbies where possible. Customers can check Wells Fargo’s branch locator for ATM locations and the status of branches and can use mobile and online banking tools almost anywhere 24 hours a day, seven days a week.
Across the company, including in branches, contact centers and corporate locations, the company is taking significant actions to ensure safety, including enhancing social distancing measures, staggering staff and shifts, enabling work from home for as many employees as possible and implementing an enhanced cleaning program.
Wolters Kluwer Lien Solutions
Wolters Kluwer Lien Solutions has been closely monitoring developments of the rapidly evolving COVID-19 situation, including information and guidance published by healthcare authorities around the globe.
Wolters Kluwer Lien Solutions has well-established business continuity plans in place to help us carry on business operations. Based on the information currently available, we are being proactive regarding the health and safety of our customers, our employees and their families.
In this unprecedented time, we remain a trusted partner in handling auto titling work. Wolters Kluwer Lien Solutions is committed to providing our customers with the same high level of service they have come to expect from us.
We will continue to focus our efforts on minimizing disruption to our customers’ work while providing timely status updates. Our team of experts is closely monitoring each DMV for any closures or changes in operations. When DMV closures do occur, we work with our customers to help mitigate risk and come up with a workaround or an alternative plan.
We are here to help not only with your titling needs, but to provide support and guidance with the ever-changing landscape of DMV closures or limited servicing. Please do not hesitate to reach out to us here.
The American Bankers Association. American Financial Services Association and the Consumer Bankers Association represented half of the industry groups that sent a letter on Sunday to the Securities and Exchange Commission (SEC) to delay implementation of the Current Expected Credit Loss (CECL) accounting standards.
To recap, the Financial Accounting Standards Board (FASB) is looking to ensure that financial institutions have solid measures in place to ensure they have appropriate reserves for any future losses based on the life of each auto loan. As a result, the board instituted its new Current Expected Credit Loss model (CECL).
The new model will require higher levels of loan loss reserves and lead to changes in lending practices and portfolio management. It will also require a significant amount of data capture, analysis and modeling to meet the implementation deadline.
In light of the coronavirus pandemic, a total of six industry associations urged SEC chairman Jay Clayton to use his ability that ensures the pause to CECL implementation should remain in effect at least through 2023.
“In this moment of great uncertainty, America’s banks stand ready to support our customers, small businesses and companies in the communities that we serve. To best address these challenges we face today, banks must devote their full attention to their core business functions and be able to lend and meet their customer and community needs. To that end, we write in support of both proposed congressional legislation and the FDIC’s letter to the Financial Accounting Standards Board (FASB) that call for delaying the current expected credit loss (“CECL”) accounting standard and allowing banks now subject to CECL to opt out of the standard,” the associations’ letter began.
"COVID-19 has caused ‘sudden and significant changes in the economy over just the past several days and the uncertainty of future economic forecasts’ and all responses to it require flexibility because ‘the pandemic and rapidly evolving measures to confront these risks make certain allowance assessment factors potentially more speculative and less reliable at this time,’ according to the FDIC’s March 19 letter. The focus and efforts of banks, as it is for our government, should be targeted on supporting the economy and we should not be subject to incentives that constrain our ability to lend and help to restore our communities during these troubled times,” they went on to say in the letter.
Joining the American Bankers Association. American Financial Services Association and the Consumer Bankers Association in asking for the CECL delay were:
— CRE Finance Council
— Mid-Size Bank Coalition of America
— Mortgage Bankers Association
