Five Questions With… Chuck Berend of BBVA Compass
Five Questions With is a monthly Q&A segment on AutoFinanceExcellence.org that offers a glimpse of what senior industry executives are thinking about outside the boardroom. Read on to find out.
Chuck Berend has led BBVA Compass‘s auto finance unit since April 2017.
He came to Birmingham, Ala.-based BBVA in July 2015 as senior vice president of risk management to oversee credit strategy and credit execution for the same unit. Prior to joining BBVA Compass, Berend served in various risk management and operations leadership roles at AmeriCredit, Triad Financial, and Exeter Finance. In 2010 he founded Bonfire Capital Group, a subprime lender focused on independent dealers in Texas and Oklahoma.
With an extended tenure in the auto finance industry, Berend has plenty of knowledge from successes to lessons learned. Auto Finance Excellence asked Berend five questions to find out what his company goals are, advice that helped him earn top management roles, and a surprising fact that his employees would never suspect.
Auto Finance Excellence: What are your company goals in 10 words or less?
Chuck Berend: Think big, put the customer first, act as one team.
AFE: What is your favorite piece of leadership advice you’ve ever received?
CB: There’s so much out there, especially when you do this for a long time. I’ve heard some really good ones, but to get down to it, what I’ve adopted the most is to be honest with people, especially yourself. If you can manage that you’ll be in a lot better positions.
AFE: What do you think is the most underrated trend in lending practices?
CB: This one is complicated, but there is a lot of talk right now about big data, fintechs, alternative data, machine learning, so none of those things could be described as underestimated. What people are underestimating is the importance of process excellence. Fifteen to 20 years ago, that’s all anyone wanted to talk about, but no one is talking about it today — it’s not sexy, it’s not new. But the technology that is available today means there are a lot more opportunities for new kinds of process design and process execution and monitoring and controls, and I think people put it on the backburner. Process excellence is where companies should invest, and that’s where they’ll win.
My whole world is indirect auto, so I look at it through that lens. Anywhere from the very beginning and the way you utilize technology to drive sales prospects and activity management and process design on the sales side, all the way through credit and funding and collections and recovery. I see most people tend to underinvest in those things, they get set in their ways, and then they leave it alone or forget it. But it’s where the opportunity is.
AFE: What person has had the biggest influence on your career?
CB: I’ve been at this long enough to where it has been different people. Early on, there was a guy I worked with at AmeriCredit, and his name is Doug Clyma. He’s a structured, disciplined, thoughtful guy, and was influential on me early on and how I approached the business and thought about the business. Later on, there’s another AmeriCredit guy who I got to work with quite a bit, Mark Floyd, he was CEO at Exeter and has something else going on now [chairman and chief executive at Horizon Digital Finance Holdings]. Mark had an influence on me as I moved to leadership roles and organizational management. Mark really excelled at that and was a big influence on how I would approach things.
AFE: What’s something all of your employees would be surprised to learn about you?
CB: I love watching cartoons with my kids. I have three kids, and on the weekends I can plop down on the couch and watch cartoons with my kids for hours — it drives my wife absolutely crazy — and if I weren’t sitting there she’d turn it off, but since I’m watching too, my kids get free license to watch as many cartoons as they like. They like Nick Toons, but those aren’t my favorite. Any of the Kung Fu Panda movies — love them.
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I agree with your statement but additionally you need to take into consideration that the New and USED car market pricing has gone through the roof. The two major compenents and building blocks of cars are steel and plastic…both of which have increased in cost significantly. Steel has gone up 23% this year and DOW chemical recently announced that is increasing the cost of plastic by as much as 20% per customer (Auto Manufacturers).
To top off the cost of goods increasing, you have Ford and GMC taking on more and more overhead due to an aging work force. All of these factors combine to make all cars more expensive.
Unfortunately, consumers have been backed into buying more car than they can afford under all circustances, hence why leasing and longer terms have become quite popular.