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  1. Resource Center
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  3. Ensuring an Audit-Worthy Repossession Process

Ensuring an Audit-Worthy Repossession Process

  1. Resource Center
  2. Allied Insights
  3. Ensuring an Audit-Worthy Repossession Process
By Allied Solutions,
August 03, 2022
Mitigate your institution’s repossession process with the help of industry professionals as they uncover trends, CFPB insights, recovery and repossession risks, and more.

If you missed the webinar on Ensuring an Audit-Worthy Repossession Process, let’s get you caught up with some highlights until you can catch the recording for yourself.

Ongoing recovery and repossession challenges along with CFPB updates continue to be a never-ending obstacle in the auto finance industry. In this webinar, industry professionals take a deep dive to uncover industry observations along with CFPB updates and actions that can be difficult to keep up with.

 

Auto Market Observations

Between record high car prices and increasingly lengthy loan terms (70+ months), US auto debt is also hitting a record high and now accounts for over 9% of total American consumer debt. Matched with inflation and rising gas prices and interest rates, millions of consumers could be at risk to default on their loans. Not to mention the end to the pandemic-induced chip shortage may lower transaction prices, leaving borrowers and lenders upside down with months left in their loan terms.

 

CFPB Bulletin

The CFPB released a bulletin (2022-04) in February of 2022 announcing its intent to “thwart illegal auto repossessions.” There’s growing concern that current market conditions are creating an environment that can harbor risky auto repossession practices, causing an intense focus to be placed on UDAAP violators. The CFPB will be holding finance companies, forwarders, and repossession agents accountable.

 

Mitigating Recovery and Repossession Risk

When it comes to recovery and repossession risk, it is best to take a proactive approach. Here are a few takeaways from the presentation to help you do just that:

  1. Document, document, document…everything.  Retain proof that vehicles are sold for fair market prices, save records of insurance claims, and document ancillary product refunds.
  2. Take care of your repossession agents. Engage with them early on and compensate them (well) for the job. If you make them a top priority, chances are they will do the same for you.
  3. Utilize available resources. Consider outsourcing collection activity and using insurance tracking and plate recognition technology.

 

Risk Checklist

With the CFPB’s nose to the ground, there are a few ways to help protect your institution from potential violations.  These may be standard procedures but are important reminders for mitigating risks and are worth repeating. For best practice, review these items every six to 12 months to stay current with regulations and guidelines.

  • Review your call scripts - if you don’t have one, get one! Scripts help provide accurate information to consumers and can document what information has been provided.
  • Review canceled orders
  • Review repossession service providers and servicers
  • Review and resolve incoming consumer complaints. Read, understand them, and make necessary changes
  • Review all fees charged to a consumer and ensure they align with UDAAP

Be sure to check out the full webinar for more observations and tips.

 

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