Last month, compliance and operations stories dominated the ranks as Auto Finance News’ most-read March stories. Below are AFN‘s top three themes to monitor, as determined by the six most-read stories in March.
TCPA Settlements
As the auto regulatory environment continues to heat up with stiffer oversight on both state and federal levels, TCPA settlements are in the spotlight.
AFN’s top two stories of the month covered two lenders — Nissan Motor Acceptance Corp. and Flagship Credit Acceptance — who altogether paid upwards of $6 million to settle TCPA claims.
The TCPA has been one of the fastest growing sources of lawsuits for lenders recently, and until the regulation is revamped, that trajectory will likely continue. Which lenders might face scrutiny in April?
Shrinking Operations
In March, AFN stories uncovered how some lenders are shrinking their business operations. Regions Bank shuttered its indirect lending business. “We informed the dealers and sent out a notice to them on Jan. 14,” Tom Lazenby, senior vice president and line of business executive for Regions Bank’s Dealer Financial Services unit, told Auto Finance News. “We will be purchasing paper through March 4, and we will fund loans through April 1.”
Sierra Auto Finance transferred its servicing portfolio to First Investors Financial Services in March. The move came seven months after the subprime lender put a pause on new originations due to “unfavorable market conditions.”
As the industry evolves, lenders will have to make hard decisions about whether they can profit in the auto finance sector.
Fresh Opportunities
Though some companies are shrinking their auto finance presence, others are making strides. Pentagon Federal Credit Union expects a tenfold boost in its balloon financing business, thanks to a newly inked partnership. In contrast to Regions Bank, PenFed is also looking to expand its indirect business into four new states.
Legacy prime lender Bank of the West on the other hand, garnered attention last month by opening its book of business to become a full-spectrum lender. It invested $40 million to reinvigorate its value proposition and strengthen dealer relations.
Monitoring how lenders adapt and tweak business models will be an ongoing story to watch.
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