Compliance practices can actually translate into customer service, said Mike Lavin, chief legal officer at Consumer Portfolio Services.
The recession and the Dodd-Frank Act “brought more emphasis on collection practices,” he told Auto Finance News in an exclusive interview at the Auto Finance Risk & Compliance Summit in May. Pre-recession, lenders and collection agencies took an “adverse approach” to lending and often threatened consumers to get them to pay, he added.
There is now more of a “collaborative approach,” and most lenders only use repossession as a last resort, Lavin said. The lender’s threats to sue or repossess the consumer’s vehicle for nonpayment has shifted to providing consumers with options to stay in their vehicle. “I think without the emphasis by the government and the regulators on collection practices that shift never would have happened; it’s better for the customer,” he added.
Check out Lavin’s full response to compliance practices in the video below.