F&I and Showroom, March 2014

Industry Week CFPB Takes Center Stage Strong words at NADA 2014 and the Vehicle Finance Conference indicate that both sides of the rate participation debate are preparing for a long drawn out battle By Gregory Arroyo H er smile to the packed room inside the Sheraton New Orleans ballroom offered no hint of her unoffi cial title as the Consumer Financial Protection Bureau CFPB s liaison to the auto fi nance industry and neither did her request for continued dialogue But when Patricia Ficklin addressed the crowd at the American Financial Services Association AFSA s 2014 Vehicle Finance Conference she sought to clarify and emphasize the bureaus concerns and expectations regarding rate participation programs Her unfl inching gaze befi t an attorney who has spent much of her 20 plus year legal career defending civil rights consumer protection and fair lending laws To be clear we are not challenging the industrys use of appropriate underwriting practices said Ficklin assistant director for the CFPBs Offi ce of Fair Lending and Equal Opportunity Its the discretion of the dealer after the lender underwrites the loan Forrest McConnell the National 12 F I and Showroom March 2014 Automobile Dealers Association NADA s 2014 chairman was equally as direct in defending rate participation against the CFPBs claims of discrimination The truth is the indirect system works for customers the former attorney said during the NADA Leadership Panel that preceded Ficklins address We force everyone in the business to keep fi nance rates low We drive competition Ficklin said she was aware of those claims but said CFPB analysts have still not seen solid data showing that Her comment spoke to what was really the top of mind topic at the conference and in the aisle ways of the 2014 NADA Convention Expo Big Data Big Data The last time the NADA held its annual get together in New Orleans was February of 2009 As that year wore on the global fi nancial crisis would drive new vehicle sales to record lows The credit markets have since thawed but the credit freeze that led to the Great Recession remained top of mind for most lending executives During the Vehicle Finance Conferences CEO Panel Chase Auto Finances Thasunda Duckett said data not a race for market share is whats driving the banks strategy Thats how the bank plans to stay nimble fl exible and fast in a year in which new vehicle sales are expected to crack the 16 million unit prerecession mark she added Chase has been one of the players thats stayed disciplined Duckett said Id say with respect to risk appetite and cycles theres more data available today than ever before I think we have to be students of the data Duckett was joined by Dan Berce president and CEO of GM Financial and Michael Groff Toyota Financial Services newly appointed president and CEO Berce said GM Financial is managing the business to build enough liquidity to withstand another cycle but he noted that having access to nonsecured funding is helping to provide a better backstop should the market face another credit freeze