The Consumer Financial Protection Bureau (CFPB) seems to be open to solutions other than a flat-fee payment to dealers who provide financing assistance to their customers, according to an article in RV Executive Today Online.
At a recent forum, a CFPB official told the Recreation Vehicle Dealers Association (RVDA) and other industry attendees that the bureau “believes there could be a variety of alternatives” to combat what it perceives as a potential for lending discrimination.
Earlier this year, the CFPB said financial institutions could avoid discrimination by paying dealers a flat fee for arranging financing. However, the bureau tried to clarify that at the forum. “We cited flat fees only as an example,” said Patrice Ficklin, the fair-lending director at the CFPB. “In fact, the bureau believes that there could be a variety of alternatives.”
One option could be to pay dealers a set percentage of the amount financed on a vehicle loan, according to Eric Reusch, the CFPB’s program manager for vehicle and student loans. Another would be a “hybrid” system that takes into account the amount financed and the duration of a contract. His comments seem to indicate the bureau doesn’t want to prescribe a single form of dealer-assisted financing payment.
RVDA and its allies believe that dealer-assisted financing is enormously successful in increasing access to and reducing the cost of credit for millions of Americans.
Industry representatives expressed major concerns about Consumer Financial Protection Bureau (CFPB) guidance on dealer-assisted financing during a forum the agency held on Nov. 14 in Washington, DC.
According to a press release, the Recreation Vehicle Dealers Association (RVDA) was among those in attendance at the forum, where dealer and lender representatives questioned the CFPB methodology used to determine that dealership participation in interest rates on vehicles loans could create a “significant risk” of discrimination.
RVDA and its allies argue that the CFPB has not released the complete statistical methodology it uses to determine whether discrimination is present in vehicle finance. For example, it is unknown if the analysis accounts for variables such as credit score, the amount financed, term of the loan, or special finance incentives.
The CFPB has also acknowledged that the agency has not studied the potential impact its guidance on dealer-assisted financing could have on the broader vehicle market or whether that guidance could limit credit availability.
“RVDA and its allies believe that dealer-assisted financing is enormously successful in increasing access to and reducing the cost of credit for millions of Americans,” the release stated.
In another development this week, the American Financial Services Association (AFSA) is launching an independent study into the effects of the indirect lending model on consumers and the industry.
AFSA, a Washington, D.C.-based trade association that includes many auto and RV lenders, said the study would include an analysis of the costs and benefits of the status quo versus changes, such as flat fees, outlined by the bureau.
For RVDA’s position on this issue, please click here.
TCF Inventory Finance Inc. (TCFIF) is marking its fifth anniversary this week, according to a press release.
“It’s hard to believe that it has been five years since we first opened our doors,” said Ross Perrelli, president and CEO of TCFIF. “We started this business with the desire to be the inventory finance company that our customers could count on every day, and I think we have proven to be exactly that. I am so grateful to each and every TCFIF employee and customer for helping us get where we are today.”
Since 2008, TCFIF has increasingly gained market share in the a wide range of sectors, including the RV, powersports and marine segments. In recent months, TCFIF has renewed agreements with several major customers, and continues to steadily add to its customer base.
“We continue to grow our business every day,” stated Peter Kelley, president of TCF Commercial Finance Canada. “Our commitment to our customers remains unwavering, and we look forward to many more years of meeting their needs and exceeding their expectations.”
TCFIF is a subsidiary of TCF National Bank and an indirect subsidiary of TCF Financial Corp.
Wayzata, Minn.-based TCF Inventory Finance Inc. (TCFIF), a subsidiary of TCF National Bank and an indirect subsidiary of TCF Financial Corp., today (Jan. 20) announced plans to further expand its floorplan finance offerings into the recreational vehicle industry within the U.S. and Canada.
According to a press release, since its 2008 founding TCFIF has gained significant market share in the electronics and appliances industry as well as the lawn and garden industry. In the powersports industry, TCFIF is the exclusive floorplan finance provider for Arctic Cat in Canada and, beginning Feb. 1, for Bombardier Recreational Products in both the U.S. and Canada. Although TCFIF is relatively new in the market, TCFIF said its executive leadership team averages over 20 years of inventory finance experience in all of these industries.
Last year, TCFIF entered the RV industry in the U. S. and Canada by becoming the preferred lender for Jayco Inc.’s three RV divisions (Jayco, Starcraft and Entegra Coach). With a strong presence at the recent National RV Trade Show in Louisville, Ky., TCFIF took the opportunity to meet with several RV manufacturers and dealers. TCFIF will continue to initiate discussions with potential customers and secure repurchase agreements from major RV manufacturers.
“We are excited to begin developing more relationships within the RV industry,” said Ross Perrelli, president and CEO of TCFIF. “We are confident that we are the best choice for floorplan financing for RV manufacturers and dealers.”
For more information about TCFIF, visit www.tcfif.com.
The Federal Trade Commission’s (FTC) recent fact-finding roundtable on dealer lending practices signals that the commission may try to further regulate dealership financing.
According to a press release, the Recreation Vehicle Dealers Association (RVDA) and other dealer groups, including NADA, firmly “believe that consumers already have adequate protections and that more regulatory barriers to vehicle financing would hurt the RV industry and the overall economy.”
RVDA said that the FTC is under intense pressure from consumer groups to more tightly regulate dealership financing. A major area of concern for RV dealers is the commission’s investigation into how dealership F&I departments generate revenue by marking up lender wholesale rates.
Rate markups are likely to be a priority for the newly created Consumer Finance Protection Bureau (CFPB). RVDA and its allies are deeply concerned that the bureau will indirectly regulate dealership compensation by pushing to establish a flat rate reimbursement policy on the banks it oversees. These banks in turn may be limited to compensating dealers with a flat rate for the transaction, rather than a percentage of the loan.
RVDA will keep dealers updated on this important issue through email alerts and RV Executive Today. For more information click here.
St. Petersburg, Fla.-based Priority One Financial Services, the recreational industry’s oldest and largest F&I outsourcing provider, continues to expand its operations department with the addition of five new employees.
According to a press release, Chuck Smith and Lance Huggett join Priority One’s team of business managers and will be working with Priority One’s dealer partners to provide financing options for the dealers’ customers, helping to increase deliveries and generate F&I income for the dealership.
In addition, Deborah Phillips, Robin Johnson and Helen Detore have been named as business administrators, responsible for ensuring lenders guidelines are met and paperwork is on time and accurate.
• Huggett, a business management and marketing graduate from Temple University in Philadelphia, Pa., has worked in the lending industry for nearly 25 years. Before joining Priority One, Huggett owned R.E.C.A. of Tampa Bay Inc. for ten years. “His extensive knowledge of boats and RVs along with financing will help his dealers deliver each and every unit,” said Rina Aponte, operations manager of Priority One
• Smith belongs to The Association of Finance and Insurance Professionals (AFIP), attended Jim Moran & Associates (JM&A) courses (one of the largest providers of F&I products in the automobile industry) and has over eight years of finance and sales experience in the car industry. “Smith’s past experience will be a large contribution to continued success with our Priority One partners,” said Aponte.
• Phillips is well suited for her position as a business administrator at Priority One having spent the majority of her career in mortgage lending. Her attention to detail, experience working with lenders and strong leadership skills make her an integral part of any team.
• Johnson has 17 years of banking experience in operations, direct and indirect lending, loss mitigation and sales. In addition to her banking experience, Johnson was a dealer relationship manager where she developed automobile dealer rapport, assisted existing automobile dealerships with the loan approval process and sold extended service contracts.
• Detore has a degree in finance from University of South Florida and is a licensed insurance service representative from the State of Florida. She has over four years experience working at a local Florida automotive dealership where she was the office manager and was responsible for assisting the finance and insurance department with analyzing financial information, preparing customer statements and maintaining regulatory compliance.
“We are very excited to be expanding the operations department once again. With the addition of these talented individuals, we can continue to give dealers the type of service they deserve,” said Heather Mariscal, Priority One’s president.