A little more than three years after announcing an aggressive growth plan based on a strategy to add a significant number of dealership customers throughout the United States, Security National Automotive Acceptance Company (SNAAC) is departing the auto-finance business.
A news release sent to SubPrime Auto Finance News late on Wednesday afternoon said SNAAC will discontinue purchasing contracts and will liquidate its portfolio. SNAAC said it will continue to accept credit applications through Monday and the last day to purchase any contract will be Aug. 19.
“We thank our dealers, borrowers, and vendors for their years of support and business,” SNAAC said in its statement.
“While SNAAC’s portfolio continues to outperform the industry with declining delinquency and losses, due to diminished profitable growth opportunities within SNAAC’s key market segment, SNAAC’s board of directors has elected to wind down SNAAC’s operations and cease purchasing contracts,” the company continued.
“The risk-adjusted returns in today’s market do not meet the thresholds SNAAC had set to ensure profitable and sustained growth which led us to this decision,” SNAAC went on to say.
SNAAC concluded its announcement by saying it will continue to service its portfolio through the middle of September after which time the portfolio will be transitioned to a third-party as the finance company liquidates.
Wednesday afternoon’s developments arrived after SNAAC previously made moves to grow its footprint.
Back in May 2016, SNAAC bolstered its workforce with the appointment of two senior-level leaders, the addition of 11 team members and a number of dealer development representatives (DDRs) in an array of markets, including:
— Charlotte, N.C.
— Raleigh, N.C.
— Sacramento, Calif.
— Jackson, Miss.
— Lexington, Ky.
— Corpus Christi, Texas
— St. Louis
— Louisville Ky.
Three years ago, SNAAC also launched newly designed military and civilian programs to better serve dealers and customers.
But then in April 2017, the Consumer Financial Protection Bureau said SNAAC violated a consent order from 2015, demanding that the finance company make good on the redress it owed to consumers and pay an additional $1.25 million penalty.
The CFPB initially had ordered SNAAC to pay both redress and a civil penalty for illegal debt collection tactics, including making threats to contact servicemembers’ commanding officers about debts and exaggerating the consequences of not paying. The bureau determined SNAAC violated the 2015 order by failing to provide more than $1 million in refunds and credits, affecting more than 1,000 consumers.