President of Credit Acceptance Corp. Steven Jones announced his retirement amid a time of regulatory scrutiny from states and increased risk in the lender’s portfolio.
His retirement begins effective June 30, according to the announcement from a Securities and Exchange Commission filing last week that provided no other details.
The timing comes as both office’s of the Mississippi and Massachusetts attorneys general are investigating the company’s origination and collection of loans.
Jones — 53 (according to a Reuters profile page) — assumed the role of president in 2007 and added responsibilities as chief operating officer in 2008. He joined the company in 1997 as manager of the debt recovery department for Credit Acceptance Corp. UK Limited.
Although 2017 forecasted collection rates are up from the prior year, there continues to be a lot of risk in the subprime lender’s portfolio. Credit Acceptance uses a method called “level yield accounting,” which means it discloses forecasted collection rates rather than loss and delinquency rates.
The company anticipates it will collect 65.6% of the total value and interest rate accrual of the loans it originated in 2017, according to the company’s 4Q earnings report. By comparison, the company forecasts collection rates of 64.8% over the total life of loans originated in 2016. Although collections are up year over year, they are down from 70.5% in 2008, back when Jones first assumed the role.
At the same time, the amount financed rose to $20,230 last year up from $18,218 the year prior. Loan terms also extended to 55 months, up from 53 months during that same time.
Jones’ successor is unknown at this time as Credit Acceptance Corp. did not respond to a request for comment.
