Reynolds and Reynolds this week launched of the Reynolds LAW Ohio F&I Library, a comprehensive catalog of standardized, legally reviewed finance and insurance documents available to dealers in the Buckeye State.
Officials highlighted the Reynolds LAW brand library of forms was developed jointly through a partnership between Reynolds Document Services and the Ohio Automobile Dealers Association (OADA).
"After partnering recently with a number of other state and regional dealer associations in the creation of LAW forms libraries, Reynolds is pleased to partner with the OADA in the same venture," said Jerry Kirwan, senior vice president and general manager of Reynolds Document Services.
“The OADA and our other dealer association partners understand a LAW forms library can support a comprehensive retail management approach for dealers and can help dealers improve the car-buying experience for their customers,” Kirwan continued.
Kirwan insisted changing regulations for automobile dealers have increased the pressure to improve dealers' F&I operations. As a result, he noted dealers are seeking trusted ways to help their business meet current compliancy standards, improve efficiency and lower risk, and stay up-to-date with customer service trends.
The LAW Ohio F&I Library of documents was created and will be maintained by the combined expertise of Reynolds director of compliance Terry O'Loughlin, Reynolds’ AFIP certified compliance legal specialists and the OADA.
"The creation of the Ohio LAW library aligns with our interests of providing our members with credible ways to improve dealership operations, as well as improve the experience for their customers," said Tim Doran, president of the OADA. "We are pleased to partner with Reynolds in this endeavor."
Based in Dublin, Ohio, the OADA is a political, economic and educational association created for Ohio dealers, by Ohio dealers, and managed by Ohio dealers, with the mission to protect the interests and increase the value of automotive dealerships throughout the state. Visit the OADA online at www.oada.com.
Reynolds' LAW forms are available in all 50 states and Washington, D.C., and have been endorsed by a number of state automobile dealers associations and leading automotive finance institutions.
The flagship product of the LAW brand is the Reynolds LAW 553 Universal Retail Sale Contract. The Reynolds LAW 553 is available in a variety of languages and is regularly reviewed by industry experts to help keep pace with new legislative and regulatory developments.
Reynolds Document Services offers similar LAW brand forms libraries to dealers in a number of states, including California, Pennsylvania, West Virginia and Virginia.
Hudson Cook bolstered its partner roster of former high-ranking enforcers who held roles at the Consumer Financial Protection Bureau and the Federal Trade Commission.
This week, the law firm added Lucy Morris as a partner in its Washington, D.C. office. Morris brings 25 years of experience in all aspects of consumer finance law and public policy. The firm indicated she will support the firm’s enforcement and compliance practices, and her experience will further enhance the firm’s ability to provide meaningful and practical advice to its clients.
“Lucy brings a wealth of experience with consumer financial services regulation, from both the CFPB and the FTC, and she will be a great addition to our practice,” Hudson Cook chairman Tom Hudson said.
From 2011 to 2014, Morris served as deputy enforcement director in the Division of Supervision, Enforcement, and Fair Lending at the CFPB. Morris’ responsibilities at the CFPB included overseeing investigations and litigation relating to consumer financial products and services, including credit cards, mortgage origination, mortgage servicing, payday lending, debt collection, credit reporting and debt settlement.
From 2010 to 2011, Morris served as a founding member of the implementation team that organized the CFPB after passage of the Dodd-Frank Act, helping to stand up the bureau’s enforcement, supervision and other functions.
Before joining the CFPB, Morris worked at the FTC from 1989 to 2010. She served in a variety of positions in the FTC’s Bureau of Consumer Protection, including assistant director of financial practices and assistant to the director.
Morris worked in the Division of Financial Practices for 18 years, where she was responsible for protecting consumers of financial products and services through law enforcement, rulemaking, policy development and public outreach. During her tenure at the FTC, Lucy supervised, litigated, and investigated complex law enforcement actions involving a variety of consumer financial products and services, including mortgage origination, mortgage servicing, credit reporting, debt collection and debt settlement.
Morris was given the Chairman’s Award in 2008, the FTC’s highest award, in recognition of her accomplishments.
Before joining the FTC, Morris practiced law for three years as a litigation associate at Betts, Patterson & Mines in Seattle.
Morris speaks frequently on topics relating to the CFPB, law enforcement, litigation, and consumer financial protection.
With the addition of Morris, Hudson Cook’s stable of legal experts now includes Joel Winston (former head of the FTC’s debt collection enforcement program) and Rick Hackett (former head of CFPB’s office of installment and liquidity lending markets).
On Tuesday, Hudson Cook added two nationally recognized collections attorneys as partners to support the firm in creating a new practice group. That Hudson Cook segment will focus on lender oversight and regulatory compliance for third-party debt collectors, debt buyers, collections law firms and creditors collecting their own debts.
The two newest partners are Gary Becker and Barbara Sinsley.
Becker is an attorney and entrepreneur who has worked in the collections industry for nearly 30 years. He is the former chief executive officer, chairman and general counsel of national collection agency DCM Services; a founding partner of Balogh Becker, one of the nation’s largest collection law firms; and a founding board member of the National Association of Retail Collection Attorneys.
“Gary is an innovator in the application of technology to collections and a recognized leader in applying legally compliant customer-centric approaches in collections and recovery,” Hudson Cook said.
The firm highlighted Sinsley is considered one of the nation’s leading attorneys in the area of debt sales and consumer collections regulatory preparedness and compliance with more than 24 years of experience. She previously served as general counsel of DBA International (formerly the Debt Buyers Association).
Over the course of her career, both as an outside attorney and in-house counsel, Hudson Cook mentioned Sinsley has assisted dozens of large and small collections businesses in coming into compliance with state and federal laws, and has represented numerous industry members before the Consumer Financial Protection Bureau, Federal Trade Commission, state attorneys general and in the courts.
Hudson Cook noted Becker and Sinsley will be joining several current firm attorneys, including Joel Winston (former head of the FTC’s debt collection enforcement program), Chuck Dodge, Ron Gorsline, Eric Johnson, Blake Sims and Tom Buiteweg in a group that focuses on compliance as it relates specifically to the regulated aspects of lenders’ collection and recovery; creditor supervision of third-party debt collection by agencies and law firms; and the sale of consumer debt.
“Gary and Barb bring to the table a wealth of experience and knowledge, allowing us to increase the breadth and depth of our collections and debt buying practice,” Hudson Cook chairman Tom Hudson said. “They will develop and offer broad-based solutions, including compliance audits, for businesses trying to ‘stay ahead of the curve’ as the government increases its enforcement and regulatory efforts in this area.
“By leveraging new technologies, we can provide these services in the most efficient and cost-effective way possible,” Hudson continued. “In addition to counseling businesses on the specific concerns they face, we believe we best serve our clients by helping them be prepared in advance, if and when the regulators come calling. We are very pleased to welcome Gary and Barb to the firm.”
Automotive Compliance Consultants general counsel David Missimer gave a strong warning to dealers stemming from what might be considered a small problem or incident blossoming into a significant issue that attracts the attention of federal regulators.
Missimer described many dealers’ attitude toward government laws regulating their business as unfortunate and likely to cost them dearly.
Why could such a stance hurt dealers badly? Missimer pointed to how easily it has become for consumers to register complaints against dealerships
“The compliance approach of some in our industry is that the Consumer Financial Protection Bureau, the Federal Trade Commission nor the Occupational Safety and Health Administration will take much interest in a single dealership, so why make compliance a priority,” Missimer said.
“This approach works well until someone is injured in a shop accident, a disgruntled employee decides to take on the title of whistleblower or a consumer takes their complaint to the government,” he continued.
Missimer reminded dealers that the government has made it very easy for consumers to register complaints against them.
“Have you logged onto the CFPB or FTC website lately? These agencies are begging people to contact them and complain about your business,” he said.
Presently, Missimer noted that CFPB posted complaints do not provide a consumer narrative, but the bureau is strongly considering changing that policy.
Given the CFPB’s eye on dealerships, Missimer believes that it likely won’t be long before consumer report narratives will also focus on dealerships as well.
Missimer said haphazard compliance is not an option in today’s business environment.
“Not a single reward is associated with noncompliance unless you consider the discount in attorney fees you get from your lawyer for frequent use,” he said.
“For those dealers,” Missimer continued, “their business risk-reward analysis should consider how much can it afford to pay for fines, lawyers, settlements and judgments — and still make a profit.”
Missimer reminded dealers the CFPB is not going away, and the FTC has taken more dealer compliance action in the past six months than it has in the last 10 years.
He also noted federal and state agencies now share consumer complaint information.
“To test your risk, type into Google ‘car dealer suit’,” Missimer said. “When I did this, I got more than 1.2 million results in 0.34 seconds, with the very first result being, ‘How to sue a used-vehicle dealer in small claims court.’”
For information on how dealers can sharpen their compliance strategy, contact Missimer at [email protected] or visit www.compliantnow.com.
Along with an opportunity to complete the organization’s compliance certification program, members of the National Automotive Finance Association can take advantage of a $100 registration discount to attend the SubPrime Forum, the event dedicated to auto financing at Used Car Week.
This two-day conference will provide data, knowledge, insight and powerful business networking opportunities to spur innovation and drive growth in the growing subprime auto finance marketplace. Presented by SubPrime Auto Finance News and SubPrimeNews.com, and in affiliation with the NAF Association, the event will offer a best-in-class forum for executives and thought-leaders in the auto finance vertical.
The SubPrime Forum is set for Nov. 11 and Nov. 12 at the Red Rock Casino, Resort and Spa in Las Vegas. It’s a part of Used Car Week, which includes the CPO Forum, the Re3 Conference and the National Remarketing Conference.
All member-company staff of the NAF Association are eligible for a discount of off the standard registration fee for the SubPrime Forum. Use discount code NAF2014 when registering.
“Register before Oct. 10 and attend this best-in-class forum for $395,” NAF Association executive director Jack Tracey said. “Hope to see you there.”
Click here for additional information regarding the SubPrime Forum, including the agenda, scheduled speakers and exhibitors.
Before the SubPrime Forum begins, the NAF Association is planning to hold the closing segment of its compliance certification program. The NAF Association offers an exceptional certification program including:
— 35 hours in-classroom and online self-paced courses
— In-depth coverage of federal laws and regulations
— Thorough analysis of state laws and regulations
— Complete module devoted to CFPB
“A critical part of a compliance management system is staffing it with qualified compliance personnel. A company having their compliance officers certified through a comprehensive educational program is a clear demonstration of the importance the organization places on compliance,” Tracey said.
For complete details about the compliance certification program, visit www.nafassociation.com.
Credit Acceptance Corp. recently reported more than just its second-quarter performance. The company also received a civil investigative demand from the Federal Trade Commission.
As a part of its Q2 financial reporting to the Securities and Exchange Commission, Credit Acceptance said in its filing that the CID came from the FTC on June 6 relating to its various practices regarding consumers.
Credit Acceptance senior vice president and treasurer Doug Busk told investment analysts during a conference call that the company is cooperating with the inquiry.
“Relative to the contents of the civil investigative demand, it requested information on a number of topics: credit reporting, consumer privacy and information security, customer payments, marketing, training, customer communications, and consumer complaints,” Busk said.
“In terms of timing, really we don't have any insight there. We provide information, and the next step and the timing of the next step isn't known,” he continued.
The FTC’s request arrived as Credit Acceptance was in the closing weeks of a quarter when both its consolidated net income and adjusted net income increased year-over-year.
The company’s Q2 consolidated net income rose to $69.4 million, or $3.06 per diluted share compared to $61.5 million, or $2.56 per diluted share, in the year-ago quarter.
For the six-month span that ended June 30, Credit Acceptance generated $119.2 million, or $5.15 per diluted share, in consolidated net income, a total slightly lower than the same time frame in 2013 when the amount was $122.1 million, or $5.04 per diluted share.
Credit Acceptance’s second-quarter adjusted net income came in at $67.6 million, or $2.98 per diluted share, compared to $60.7 million, or $2.53 per diluted share, for the same period last year.
Through half of 2014, the company posted $131.0 million in adjusted net income, or $5.66 per diluted share. That’s higher than a year ago when Credit Acceptance had adjusted net income of $119.5 million, or $4.93 per diluted share.
Q2 Originations and Competition
Credit Acceptance’s string of double-digit growth year-over-year in loan unit volume and dollar volume stopped in the second quarter after reaching three quarters in a row. The company still posted unit- and dollar-volume jumps of 4.5 percent and 5.7 percent, respectively, during Q2 as its number of active dealers grew 10.6 percent.
The company originated 50,913 contracts in Q2 from a dealer base that consisted of 4,960 stores.
Credit Acceptance chief executive officer Brett Roberts acknowledged average volume per active dealer declined 5.5 percent year-over-year in Q2. Roberts attributed the decline in volume per dealer as the result of increased competition.
”It continues to be a difficult competitive environment,” Roberts said. “The growth rate in the second quarter did break the trend that we saw over the last three quarters. I don't know if the comparison is a little bit tougher this quarter. Last year's first quarter was pretty soft, so the first quarter of this year's growth number likely reflected that. The comparison was a little bit tougher. But it continues to be a very tough market, and the 4.5 percent growth that we had this time was certainly a break in the trend line.”
Analysts asked Roberts if Credit Acceptance is poised to return to year-over-year loan unit increases ranging from 11.0 percent to 14.3 percent as well as dollar volume rises climbing between 11.3 percent and 16.2 percent — the upward levels the company posted in the previous three quarters.
“It will get better at some point but it goes in cycles,” Roberts said. “It's probably likely to get worse before it gets better. That has been the history. It is difficult to know the exact timing, but we're in a period now where there's lots of capital and there’s lots of competition, and there’s certainly loans that are being written that we wouldn't want to write based on the economics of those loans, and so we just have to be patient until the tides turn, which they eventually will.”
The Association of Finance & Insurance Professionals (AFIP) is offering Industry Summit attendees a $100 discount if they register for its pre-summit certification boot camp.
In order to obtain the discount, dealer managers and F&I professionals must complete the registration by Aug. 15.
AFIP highlighted that its two-day intensive training session is slated for Sept. 7 and 8 at the Paris Hotel Las Vegas. The boot camp will culminate with the administration of the AFIP certification exam.
The regular cost for the course and boot camp is $872.50. With the discount, the cost is $772.50.
AFIP introduced regional certification boot camps in January.
“The boot camp model has been highly successful,” AFIP executive director Dave Robertson said. “An attendee at the Bossier City, La., session said it best, ‘Until now, the regulations were just words on a page. This session made them come to life and gave them relevance to what I do every day.’”
AFIP recommends that boot camp attendees study the certification course material for two to three weeks prior to the session.
To register for the pre-summit boot camp, go to www.afip.com/bootcamp or call AFIP at (817) 428-2434.
RouteOne plans to discuss the forthcoming scrutiny of F&I products by the Consumer Financial Protection Bureau and the Federal Trade Commission during a complimentary webinar later this week.
During the webinar titled “CFPB and FTC Update: All About Add-Ons,” RouteOne staff attorney Joseph Karam and national business development manager Jesse Pappas intend to break down the cost of compliance, provide a brief introduction to the CFPB and FTC, and look closely into the forthcoming scrutiny of F&I products.
Karam and Pappas will offer a Q&A session following the presentation.
The webinar is scheduled for Wednesday beginning at noon EDT.
“As the regulatory environment grows increasingly complex, dealerships are contributing a significant amount of time, resources, and money in the effort to stay compliant,” RouteOne chief executive officer Mike Jurecki said.
“With separate federal agencies now dedicated to consumer finance and consumer protection, we encourage our dealer customers to take advantage of this opportunity to educate and prepare themselves for the future regulatory environment,” Jurecki continued.
The webinar will be recorded and available for review after the live session.
Dealers can register for the free webinar at www.routeone.com, or they can (866) 768-8301 for more information.
During a free webinar set for Thursday, Dealertrack Technologies associate general counsel Randy Henrick plans to revisit a topic he’s often discussed with SubPrime Auto Finance News.
Henrick will explain why he believes the Federal Trade Commission is intensifying its pursuit of dealers engaging in deceptive advertising activity. During the session, Henrick will provide examples of deceptive advertising practices to avoid.
Other discussion topics will include:
• The FTC’s aggressive approach in policing dealer advertising.
• Specific advertising the FTC is targeting.
• Deceptive leasing advertising and promotions to avoid.
• Internet and social media advertising do’s and don’ts.
This webinar will conclude with a live Q&A session.
The free event is scheduled for Thursday beginning at 2 p.m. EST.
Dealers and their staffs can register by (866) 553-2176 or clicking this link.
The State Government Affairs Committee of the American Financial Services Association published a white paper focused on the impact of consumer complaints.
AFSA highlighted the paper details the varying ways that state regulatory bodies and federal agencies collect, report and use consumer complaint information to inform their rulemaking activities.
Officials noted the paper takes a statistical look at complaints collected by the Federal Trade Commission and includes a narrative discussion of the way the Consumer Financial Protection Bureau collects and uses complaint data.
The paper also outlines activities in the consumer complaint reporting space of several state regulatory bodies — from the office of attorney general to department of financial services — specifically looking at annual top 10 lists released by state agencies.
The Consumer Complaints white paper is available on the SGA Resources section of the AFSA website or by using this link.
