Consumer Portfolio grows, staffs up for tax-refund season

Consumer Portfolio Services increased auto originations 35 percent in the third quarter to $279.3 million, aided by a slowdown in subprime loans at competing lenders.

“Some companies out there have become less aggressive,” Charles Bradley Jr., CEO of Consumer Portfolio, said during a conference call last week. “Whether they are truly pulling back or they are just sort of easing off, it’s a little hard to tell. But either way, it benefits us greatly.”

Consumer Portfolio, of Irvine, Calif., buys subprime loans from about 16,000 dealerships nationwide, two-thirds of which are new-car stores. In 2013, 91 percent of its contracts were for used cars.

Summer surprise

Bradley said he was surprised that loan volume picked up over the summer, which is usually a slow time in subprime. He said the surge in July, August and September -- from a rate of about $70 million in loans per month to a rate of about $90 million -- has the company wondering whether the usual pattern in the months of February, March and April -- that is, an increase in volume buoyed by tax refunds -- will hold true in 2015.

“It will be interesting,” he said, “to see how the growth materializes next year.”

Despite the surprise gain from summer volume, the company still expects to build originations as usual during tax-refund time, he said. To prepare, it’s adding marketing representatives. The goal is to get to about 140 reps by year end. The number now stands at about 127, he said, up from about 100 at the beginning of the year.

In compliance

Bradley also said Consumer Portfolio has complied with all financial obligations under a consent order with the Federal Trade Commission this year over alleged violations in collections and loan servicing.

The lender agreed to pay more than $3.5 million in refunds or adjustments to more than 128,000 consumer accounts and cease collections on an additional 35,000 accounts. It also agreed to a civil penalty of $2 million and to monitoring, and reporting on, loans purchased from dealerships. That oversight is ongoing.

You can reach Jim Henry at

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