Dear ARA Members,
We have long sought relationships with the lending community and their associations to foster a strategy of seeking mutually beneficial solutions to areas of concern that both sides face.
Clients request financial information regarding the short and long term financial health of our businesses. Does anybody actually look at this information? Poor short term decisions will insure a continuing erosion of critical third party service providers.
A reasonable profit for the supplier with a firm ceiling for the clients should be a cooperative effort to insure long term success for both entities. Decisions based on “how much can I save today” will have far reaching consequences for both client and supplier, in the future.
Accepting 35% recovery rates today, when profits are high from sectors other than auto finance, will not serve lenders well when faced with weaker profits, in the future, from these other sectors. In order for third party suppliers to provide the services necessary to continue the lending cycle, we must work together to insure the minimum financial package necessary to continue to function in a compliant and customer focused manner and maintain a viable business model for the qualified, professionally trained and educated repossessor. The long term view is optimal for both parties.
As a critical function of long term business planning, our lending partners perform risk assessments regarding the long term viability of their vendors and suppliers. Will the third party suppliers that clients depend on become extinct or still be viable, healthy, and providing the critical services that are needed in the future?
We will be redoubling our efforts in the 4th quarter of this year to educate our industry as to the seriousness of these issues and seek every opportunity to address them.
Sincerely,
Les McCook
ARA Executive Director
