Like other auto lenders, GM Financial is gearing up for much closer monitoring of loans originated via dealerships to head off the possibility of discrimination charges from the Consumer Financial Protection Bureau.
The CFPB says that lenders’ practice of giving dealerships discretion over their own compensation for arranging auto loans opens the door to higher rates for minorities and other protected groups.
Overseeing GM Financial’s compliance efforts is Dan Bickmore, the company’ senior vice president and chief compliance officer since October, when the position was created.
Bickmore has considerable experience in the workings of captive finance companies. Before joining GM Financial, he was assistant general counsel for Mercedes-Benz Financial Services USA. Before that he was associate general counsel for DaimlerChrysler Financial Services Americas.
Bickmore discussed his new job responsibilities by phone last week with Automotive News Special Correspondent Jim Henry.
What’s your background?
I’ve basically been a lawyer by trade for 30 years. In 1994, I got the opportunity to move to the auto side. That’s what I’ve been doing the last 20 years, most of it with MBFS or DCFS -- through the merger and the de-merger. So I spent 20 years as a lawyer in the auto space -- compliance, litigation, etc. -- all from a captive perspective.
What's your mission at GM Financial?
I’m here to reorganize GM Financial’s compliance. We didn’t have a chief compliance officer before but we certainly cared about compliance. We created a new compliance department and transferred a few things in that we had in other places.
What sort of things?
For instance we transferred a testing and monitoring group to compliance from our audit group.
We’ve done some work in vendor compliance as distinguished from vendor management. We want to make sure they have appropriate policies and procedures so we know what they’re doing, and they know what we want to see, and they have the policies and procedures to address that.
We are beefing up our complaint management process. As you know the CFPB have made it a focus for testing and monitoring. We’re not just addressing complaints on an individual level. No matter how they get there -- phone, letter, mobile device or from the regulatory area -- we’re tracking them and also compiling them, so we’re looking at them not just singly but also we’re looking for trends.
And we have beefed up our fair lending areas. We are certainly increasing our look at the portfolio level and at the dealer level.
When you say vendor compliance, are you referring to dealers?
No, dealers aren’t vendors; dealers are our customers. The dealer relationship is not what the vendor compliance group does. That’s loan servicing, collections, data integrity, data processing -- anybody who touches a consumer or touches consumer data.
On the dealer side, we have done a lot of work to make sure they’re following the CFPB’s guidance. With regard to dealer markup analysis, we’ve sent communications to dealers, educational communications, to let them know what we’re doing.
What sort of educational communications?
In the fair lending space we provide communications, educational materials, and engage in testing and monitoring of dealers.
It’s not surprising we would want to educate dealers to have appropriate policies to make sure there’s not discrimination against any protected class; that they need to put those policies in place and train their people to them. We are looking at providing more specific dealer information in the [Equal Credit Opportunity Act] area.
In our experience dealers are becoming more aware daily of the issues we are addressing at the regulatory level and of their obligations to engage in business free from illegal discrimination. It’s in everyone’s business interest as well as legal interest.
How many people are in your department, and have you added people?
All of those changes involve roughly 30-some people. We are hiring. In terms of people this year, we’ve probably added four or five, so that number is 30 to 35 now.
There’s no question, this year and next year our compliance staff will grow.
You can reach Jim Henry at email@example.com