By Mike Gibb
DALLAS — There are good times ahead for the repossession industry, although the hype surrounding an increased compliance burden continues to temper that excitement, according to many of those who attended the American Recovery Association’s North American Repossessors Summit here this past weekend.
Auto loan volumes are rising, and lenders are reporting that they are seeing looser underwriting guidelines, which generally lead to more loan defaults and repossessions. During his presentation at the conference, Thomas Webb, the chief economist at Manheim Consulting, predicted that repossession volumes will increase to 1.7 million units in 2015, up from 1.3 million units in 2011.
Others echoed Webb’s sentiments that lenders are now looking for more customers.
“Dealers are telling me that they are starting to see irrationality on the part of lenders looking for volume,” said Jim Bass, the chief executive of Auto One Acceptance Corp. during his keynote address. “It’s heating up.”
Agents continue to be warned of stricter compliance policies and procedures, including those being instituted by their lender-clients and those looking to be compliant with the Consumer Financial Protection Bureau.
“This is a year for change,” said Les McCook, the executive director of the ARA, which hosted more than 400 agents, lenders and service providers during the three-day event.
ARA President Mary Jane Hogan mentioned during the conference that the association will be inviting other state and national groups to next year’s event with the plan to discuss establishing standards for storage, close, and repossession fees.
Many speakers took time during their remarks to offer their thoughts and suggestions regarding the CFPB. Paul Kulas, the owner of Belles Camp Communications, pointed out the efforts that the federal government is making to let people know about the CFPB. The CFPB’s site, Kulas said, is built using WordPress, which Kulas said is the number one hosting solution for maximizing search-engine optimization. The message is that the CFPB is actively marketing itself to make sure consumers know about it as a place where they can go to file complaints.
Mike McCulley, a lawyer with Weltman, Weinberg and Reis, pointed out a number of steps that agents can take to proactively be ready for any examinations or audits performed by the CFPB. McCulley recommended that agents maintain comprehensive written policies and procedures, effective training program, specific to consumer laws, a well-documented monitoring process, an effective consumer complaint monitoring process, and effective independent audit coverage of the agency’s compliance program.
“You could be running the cleanest shop in the country but it doesn’t mean anything if you can’t prove it,” McCulley said.
Agents at the conference were more optimistic about the industry’s prospects going forward. They reported more assignments coming from financial institutions, and better communication and stronger relationships with their lender-clients.
“I’m very encouraged by what I’ve seen and heard at the conference,” said one attendee, who asked not to be named. “It’s definitely a more positive vibe than I’ve felt in years past.”
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