As the CFPB moves to expand consumer protection into auto finance it has become critical for auto lenders to have a Compliance Management System (CMS) in place. A recent CFPB compliance bulletin noted that “nearly every examination or targeted review conducted by the CFPB contains an assessment of an entity’s CMS, whether it’s an assessment of how the entity manages its compliance program enterprise-wide, or how an entity meets its consumer responsibilities within a specific product line”. This is not just critical for an auto lenders internal processes, it also helps them properly monitor their collection partners who have direct contact with the consumer.
Ultimately, auto finance companies are responsible to ensure that their vendors meet all the regulatory standards imposed by the CFPB. This can be a daunting task when pursuing collection action on debtors that can span the US and involve multiple law firms. In this environment lenders must implement new strategies to maintain and grow high value collection programs that are compliant. Implementing a collection effort using a managed approach can provide this infrastructure, allowing lenders to pursue collections while meeting regulatory requirements.
Using a blended approach to collections with a strong legal component has proven to produce significantly higher returns while reducing the risk associated with standard collection strategies.
CLICK HERE to learn more about using a managed approach to debt collections that immediately protects lenders from non-compliance while dramatically lowering the risk management costs of the company.
TRAKAmerica is the nation’s largest management company that provides primary and legal collection strategies and has worked under the oversight of the CFPB in the banking industry since CFPB inception. With robust compliance management systems already in place, lenders benefit from immediate protection from non-compliance while dramatically lowering their risk management costs.
