Exeter Finance Corp. opened a new servicing center June 23, at a time of origination — and delinquency — growth for the Irving, Texas-based nonprime lender.
The two-level, 50,000-square-foot facility, with capacity for nearly 500 employees, houses 90 people so far. With an open floorplan and picture windows, the servicing center is located in suburban Clearfield, Utah, north of Salt Lake City and just a few miles from an Air Force base.
“We need to be flexible and agile with our servicing organization to support the broader Exeter business,” said Karl Miller, vice president of collections at the new facility. “As the loan portfolio grows, do we need additional staff? Absolutely.”
Exeter’s portfolio has doubled in the past year, to $2.2 billion as of March 31, according to a May 19 securitization presale report issued by Standard & Poor’s rating agency. At the same time, delinquencies grew to 8.90%, up from 7.82% in the same period 2013.
The S&P report, along with a similar release from rating agency DBRS, noted that Exeter was making efforts to grow its servicing capabilities by outsourcing work to a Canadian firm and by investing in the Utah servicing center.
Back in November 2013, Exeter got approval for a $2.3 million state tax incentive, according to the Utah Governor’s Office of Economic Development. The incentive requires that Exeter meet Utah guidelines called Economic Development Tax Increment Financing. At that time, Exeter hadn’t yet settled on Clearfield, which it chose for both quantitative and qualitative reasons, according to the company.
“Among the qualitative reasons is access to an excellent workforce, here in the area north of Salt Lake City,” Miller said. While the presence of a well-qualified labor force was a factor in choosing Clearfield, Miller said being close to a military base was also a plus, since the company hopes to recruit veterans and spouses of active-duty personnel.
To manage subprime loan delinquencies, lenders must refine account treatment, particularly with regard to strategy and timing, Miller said. As such, Exeter gives itself an opportunity to “penetrate accounts a bit more” and drive more right-party contacts, he said. By its very nature, subprime loans are more expensive to service.
Another consideration for the Utah site is its location in the Mountain time zone while company headquarters is in the Central time zone. Having call centers on different sides of the country gives the company more flexibility on inbound and outbound calls, Miller said.
As for the structure itself, Exeter learned from past experience. “We’ve learned a lot of lessons from when we built our first servicing center in terms of day to day, proper associate-to-supervisor ratios, having the desks set up properly, and lots of colors, which make it a more pleasant place to be,” he said.
The ultimate goal was efficiency in the design which, in turn, fuels employee efficiency. “In our case, that means a good bit of open space,” he said. “We want it to feel open, with lots of windows.”
Miller noted that sunlight has been shown in some studies to increase serotonin, which lifts an individual’s mood. He said there are a number of cubicles but the divider walls are low so employees can see each other. And the design didn’t stop with the visuals. The designers also installed what he called a white-noise system.
Ultimately, Miller said the company wants its employees to be proud of the company they work for, and that pride starts with the physical facility.
Breaking into a new metropolitan area is always a challenge, Miller said. Exeter may be widely known around Dallas, but not necessarily in Utah. The new center just hired 40 employees. Miller asked the room full of newbies to raise their hands if they were a referral from an existing employee, and everyone’s hand went up.
“That spoke volumes about what we’re trying to accomplish here,” Miller said. “Yes, we’re a servicing corporation. Yes, we are in subprime, and yes, we are an auto finance company. But we’re really proud of our culture.”
