Today's Headlines

    Holiday Publishing Schedule

    Due to the Christmas holiday, Newsbriefs will be published next week on Wednesday, December 23.

    The first issue of 2016 will be published on January 7, 2016.

    Exeter Finance Corp. Announces CEO Transition

    Exeter Finance Corp. Press Release (12/15/15)

    IRVING, Texas, Dec. 15, 2015 -- Exeter Finance Corp., announced today that Tom Anderson has resigned from his role as Chief Executive Officer and as a member of the Board of Directors to pursue other interests. Mark Floyd, a member of Exeter's Board of Directors who formerly served as Exeter's CEO and co-Chief Operating Officer at AmeriCredit (n/k/a GM Financial), has been appointed Interim CEO.

    Martin Brand, Chairman of Exeter's Board of Directors, commented: "I would like to thank Tom for his leadership during a crucial time for Exeter when the Company consolidated its originations platform and streamlined its operations, resulting in a much more efficient company with rapidly increasing profitability. We are excited about Exeter and its prospects and thank Tom for his leadership. We are also grateful that Mark Floyd has agreed to come back from retirement and step in as Interim CEO. Mark is a highly respected executive with extensive industry experience in auto finance. His strong track record and previous tenure as CEO make him an ideal and natural choice for Interim CEO."

    Mark Floyd added, "During my over five years as an executive and member of the Exeter Board, I have had the privilege of serving the company as it has evolved into a major player in the auto finance industry.  I look forward to working with Exeter's deep and experienced leadership team as we continue that evolution.  I am fully committed to ensuring a seamless transition and continuity in leadership."

    Tom Anderson stated: "It is hard for any company to transition from a start-up to high growth to a professional organization. I am happy to have contributed to that evolution."
    Editors note: Exeter Finance Corp. is an AFSA Member company.

    Warren Claim Named One of Biggest "Pinocchios" of 2015 by WaPo

    Washington Post (12/14/15) 

    The Washington Post released its annual biggest Pinocchio's list, an annual compendium of the most off-base comments of the year, and included Senator Elizabeth Warren's claims regarding auto lending. The Pinocchio column is the Washington Post's fact checker series, which first appeared in 2008. The column's goal is to serve as the "truth squad" regarding statements of political figures on a broad range of issues.

    The Washington Post said of it's Pinocchio piece earlier in the year: "Sen. Elizabeth Warren (D-MA), pushing for new regulations of loans made by car dealers, cited a figure based on a misleading and dated report from the Center for Responsible Lending, an advocacy group. But then she also wildly mischaracterized the number, as even the advocacy group conceded that the figure includes reasonable compensation owed to car dealers."

    CFPB’s Mass Data Collection Threatens Consumers’ Financial Safety

    House Financial Services Committee (12/16/15) 

    The Consumer Financial Protection Bureau (CFPB) has undertaken a dozen large-scale data collection efforts, gathering highly sensitive information on hundreds of millions of American consumers even as the Bureau’s director has acknowledged that data held by the CFPB is “not 100 percent secure.”

    A report from the Government Accountability Office (GAO) noted "serious concerns about the privacy and security of the consumers whose data are being collected by the CFPB.”

    Key Takeaways: 

    • The CFPB is collecting more information than is necessary to execute its regulatory mission. The CFPB has already collected information on 87 percent of the credit card market—and in the past has stated that it is seeking to enlarge this number to 95 percent of all credit card accounts—but it only needs to sample approximately one percent of the market to achieve its stated goals. As of September 2014, just one of the CFPB’s 12 mass data collections had already collected information on 173 million loans.
    • The CFPB is alarmingly non-transparent about its mass data-collection program—the agency does not reveal to the public specifically what data it collects, nor does it notify specific consumers about what information it has gathered about them or how it will be using it. The CFPB collects account-level and sometimes even transaction-level data that captures multiple aspects of consumers’ financial lives, such as information about credit cards and checking accounts.
    • The CFPB’s data security program has multiple troubling weaknesses. The Bureau’s Information Security Continuous Monitoring program is rated at Level 1 out of 5—defined as “ad hoc,” and the data security protecting the Bureau’s consumer complaint database was found by the Inspector General to be deficient in multiple areas. The CFPB lacks even internal written procedures for “anonymizing” the data is uses.

    Read the full press release at the HFSC website.

    Fed Raises Rate

    American Banker (12/17/15) John Heltman

    The Federal Open Market Committee on Wednesday voted to raise federal interest rates from nearly zero for the first time since 2008, meeting market expectations but ushering in a new and uncertain normal for the banking industry.
    The Committee voted to raise rates 25 basis points — to between 0.25% and .5%.

    New Member Welcome

    AFSA is pleased to welcome the following new Active (finance company/bank) members:
    CitiFinancial Servicing LLC provides best-in-class consumer loan servicing to customers in North America.  It is as wholly owned subsidiary of Citi with principal operations in O’Fallon, Missouri.
    SunTrust Dealer Financial Services provides indirect auto financing with franchise and independent auto dealers in 25 states and the District of Columbia. Primary markets are Texas, Southeast, and Mid-Atlantic states.
    Universal Financial Company provides indirect subprime automobile financing to dealers in California.
    The following new Business Partners (industry suppliers) have joined AFSA:
    Focus One, Inc. is a full service mail house specializing in creating communication documents via multiple channels including First Class Mail, Standard Mail, Express Mail, email and text
    HF Direct is a full-service direct marketing agency devoted to developing, implementing, and analyzing direct response marketing campaigns.

    VIEWPOINTS: CFPB Director Defends Making Policy on Faulty Information

    (12/17/15) AFSA Staff

    The Consumer Financial Protection Bureau (CFPB) is under fire – both on the Hill and in the media. And the usually confident Director Richard Cordray has come out with an angry – and ineffectual – challenge to a report by the American Banker that found the agency’s consumer complaint database is largely inaccurate and untrustworthy.

    In a Dec. 1 letter to the editor, Cordray claimed that the American Banker's coverage “was itself riddled with inaccuracies about the database and how it works.” But he did not deny that errors exist and did not address statements by former employees who agreed the database had serious problems.

    Instead, he attempted to minimize the errors, suggesting they were limited in scope and saying it was “unclear whether any of [the mistakes cited in the report] were significant.” He also staunchly defended the past and current complaint collection practices that have resulted in these errors.

    Besides being a sign of the CFPB’s weakness in recent months, the letter was also:

    Hypocritical: In his effort to downplay the database errors, Director Cordray cited an audit published by the Inspector General, “which found only a ‘relatively small’ number of complaints with inaccuracies.” He goes on to say that, “likewise, the story cites only three purported ‘errors’ out of hundreds of thousands of complaints handled.”

    But the CFPB has come down aggressively on countless businesses, small and large, across many different industries, often citing just a few errors, or what many would legitimately consider “relatively small” incidences. The main criticism of the CFPB, in fact, is that no error or indiscretion is insignificant in the bureau’s eyes, and many responsible businesses have had their reputations damaged and, in some cases, even been forced to close their doors, as a result.

    And were the CFPB’s errors really so insignificant? One former senior CFPB official cited in the American Banker report said that “when we were asked to look into a complaint, more than 25% of the time it turned out that the data we were looking at didn’t really pan out or it was just incorrect in the way it was reported.”

    Out of Touch: Since its formation, the CFPB has issued roughly one new regulation a month in the areas of mortgage financing, student loans, debt repayment and fund transfers, among others. The Bureau has done so without much, if any, oversight, thanks to the way the bureau was set up, in an attempt to deny Congress the ability to place constraints on its actions.

    These regulations, largely guided by consumer complaints, deeply affect the livelihood of people across the country. It’s critical that the complaint information reflected in the database be accurate. Consumer protection is important. But if the CFPB is not working with accurate data, its efforts will likely cause more harm than good for those it’s trying to help. The agency needs to slow down, and take appropriate steps to improve the processes in place.

    Tristam Q. Wolf, a CFPB Monitor blogger put it well in a recent post:

    “While a database of consumer complaints that fairly reflects problems in the consumer financial marketplace would undoubtedly be a valuable font of information, the existing system is hampered by rigid technology and limited resources…. The CFPB holds industry to a high standard, and should set a similar standard for the quality of its own data. But more improvements must be made if the goal of creating a transparent and fair marketplace for consumer credit is to be achieved. As a federal government agency, the CFPB should seek to treat industry as fairly as it treats consumers.”

    As the CFPB continues its efforts to protect consumers, it would be wise to do whatever it takes to make sure the information driving its policies is as accurate as possible. The alternative – making policy based on faulty information – is simply not acceptable.

    VIEWPOINTS is a new feature of AFSA’s Newsbriefs that will appear periodically. Member companies are encouraged to submit articles for VIEWPOINTS.