Risk Management Priorities for the New Year

 Risk Management Priorities for the New Year, showing wooden blocks falling like dominos. Four dice spell out 'RISK' in place of one of the wooden blocks, and are being held by a man pressing his finger from the top, stopping the domino fall. 

This article was originally published on AFSA.

Rising inflation. 

High vehicle prices.

Escalating monthly payments. 

These conditions are leading to financial stress for borrowers, and as a result, loan defaults are increasing. Lenders are in a precarious position to support borrowers while protecting their portfolio. Here are three key risk management areas to keep in the forefront in 2023.

A Repossession Renaissance
Repossession activities are back on the table and Cox Automotive reports that repossessed vehicle sales are trending towards normal (i.e., pre-pandemic levels). As repossession activities resume, the CFPB remains firm in its guidance on vehicle recovery best practices, particularly wrongful repossessions.

Despite repossession activity resuming, the industry is facing a rapid decrease in collection and repossession vendors, with many closing their doors due to ongoing pandemic-induced economic effects. Fewer resources combined with increased demand is resulting in significant hikes in service fees.

Refund Restitution 
Regulators continue to heavily focus on compliant refund processes for ancillary products that no longer benefit the borrower. GAP, in particular, remains in the regulatory spotlight – both on the Federal and state level. California recently implemented a notable law that adds new requirements to the sales and administration of GAP.

Read the full article here.

About Allied Solutions

Allied Solutions is one of the largest providers of insurance, lending, risk management, and data-driven solutions to financial institutions in the US. Allied Solutions uses technology-based solutions customized to meet the needs of 4,000 banks and credit unions, along with a portfolio of innovative products and services from a wide variety of providers. Allied Solutions is headquartered in Carmel, Indiana and maintains several offices strategically located across the country. Allied Solutions is a wholly owned and independently operated subsidiary of Securian Financial Group.

Content in the blog posts are the opinion and views of the writer, and don't necessarily reflect the opinions or views of Allied Solutions.

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