In an effort to get ahead of increased competition stemming from a potential economic slowdown, Consumer Portfolio Services is diversifying its business, Chief Financial Officer Jeffrey Fritz said.
Specifically, CPS is increasing its direct lending volume and is developing a title lending business.
CPS originated $8.2 million of direct loans in the first quarter. At that pace, the lender will be on track to fund $40 million in volume this year, an 80% year-over-year increase, said Senior Vice President of Sales Curt Powell. CPS launched its direct lending business, called New Roads Auto Loans, in 2016. New Roads uses the same decision logic as CPS’s indirect program, so logistically CPS just needed to add a customer service team and build a website to process applications.
Meanwhile, the title lending business is slated to get off the ground by mid-2020, Powell said. “We like that business because the mechanics of it, the loan accounting and servicing, are identical to our core business,” Fritz noted. “Plus, our existing customers who pay off their loans provide a good source of new title lending business,” he added.
Consumer Portfolio Services [ticker: CPSS] has a market capitalization of about $80 million.
