At last week’s 14th annual Auto Finance Summit 2014, hosted by RoyalMedia, hundreds of industry leaders gathered in Las Vegas to discuss the trends and issues impacting the auto finance community. The CFPB continues to be a huge focus. In fact, publications passed around and exhibit booths at the summit flashed advertisements and marketing collateral with catchy headlines like, “CFPB IS COMING. ARE YOU READY?” It was no surprise.
Last month, the bureau issued a proposal to supervise nonbank companies that qualify as “larger participants of a market for automobile financing.” According to Auto Finance News, the rule would allow the CFPB to examine up to 93 percent of the industry, including nonbank auto lenders that make more than 10,000 loans per year.
Additionally, nonprime and subprime auto lenders may be subject to regulatory oversight – a segment that has experienced rapid growth and recently made national headlines that is stirring concerns. Companies like William Mills Agency’s client Equifax, however, continue to urge the industry to look at the numbers – delinquencies are at an all-time low and affordability is the best it’s ever been.
Many financial institutions – particularly credit unions – are looking for more growth opportunities. As the economy continues to recover, these institutions are digging deeper into the nonprime borrower pot and being “intelligently aggressive” in their efforts, as James Smith, assistant vice president of lending at State Employees Credit Union (SECU) told Auto Finance News.
As far as heading toward a subprime auto bubble, Equifax chief economist and SVP Amy Crews Cutts says no. “Importantly, auto loan originations to borrowers with subprime credit scores remain stable, providing additional evidence that a bubble is not occurring in that space,” she said in a press release issued during the summit.
Beyond the CFPB and subprime lending, sessions during the event included strategies for identifying dealer partners; digital technologies for today’s tech-savvy consumer; customer engagement and cross-selling best practices; and lessons learned from other industries.
Overall, it was an encouraging event. The auto industry continues to grow at a strong pace and lenders are looking for tools to improve operations and gain a competitive edge. Paul Clark, president and chief executive for TD Auto Finance, the sixth largest auto finance company in the nation, even told attendees during his keynote address that the war for good talent in the auto industry has intensified. Competition is fierce and the auto finance industry is on the hunt for innovation and technology to take them to the next level – the ideal time for FinTech companies.