While a number of lenders are revamping their collections and repossession practices to adapt to a new regulatory environment, USAA Federal Savings Bank is focusing on a range of educational tools to keep members in their vehicles.
“We’re very purposeful in guiding [consumers] and helping get them into the right type of loan, so we can mitigate and avoid late payments and charge-offs,” Renee Horne, vice president of consumer lending at USAA, told Auto Finance News. “Now, obviously there are going to be some [late payments], that’s just part of being in this business, but I’m confident in the way we’re disciplined and smart about risk changes, and changes in our mix.”
Some of the tools the company is using, are a debt services solutions team that members can call for advice, as well as an online portal and mobile app — which are currently undergoing a revamp — with educational blog posts and videos, she said. The lender began reworking the portal and app in the fourth quarter of 2016, and will continue to make improvements throughout 2017, a spokeswoman for the bank said.
“The debt solutions team at USAA really focuses on understanding the member’s situation, coaching them through so we don’t have a situation where they wind up in financial jail and ruin their credit for the long haul,” Horne said. “We specifically offer car buying services, which encompasses a full breadth of educational access videos, blogs, and all types of literature that helps our members discern and navigate the ambiguity that’s out there.”
Military compliance has been under the microscope in recent years, following enforcement actions from the Consumer Financial Protection Bureau against auto lenders who violated the Servicemember Civil Relief Act (SCRA) — most notably Wells Fargo Consumer USA.
USAA’s members are exclusively military service members and their families, so the company “learns from other” enforcement actions outside of the company, Horne said. The bank also focuses on making sure the consumer is not going down the road toward delinquency in the first place, which adds value for its members, she added.
“We are very focused on doing what’s right for the member, especially in a situation of active duty and deployment,” she said. “For example, if you think of SCRA, we go the extra mile to reduce rates to a 4% cap, versus the required 6% cap.”
