Automotive News Finance & Insurance Blogs

Finally, a lender owns up

Posted 11:45 am U.S. ET, April 29
blogs Jim Henry is a special correspondent for Automotive News.
 
Auto lenders carefully avoid naming their competitors, especially when they want to criticize. It’s always the unnamed other guy who gets “aggressive” in approving loans, making life harder, and -- shudder -- potentially riskier for everybody else. That’s why it was refreshing this week when Jeffrey Brown, CEO of Ally Financial Inc., figuratively raised his hand on Tuesda ...
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Auto finance critic Warren stands firm on CFPB dealership oversight

Posted 11:15 am U.S. ET, April 22
blogs Jim Henry is a special correspondent for Automotive News.
 
Sen. Elizabeth Warren is once again calling for direct regulation of auto dealerships by the Consumer Financial Protection Bureau. In a stinging speech last week, she also advocated for what amounts to a ban on dealer markup on auto loans and equated auto loans with “the pre-crisis housing market,” which helped bring about the 2008-09 recession. “It’s no coincidence&rdquo ...
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Women in automotive seek more peers

Posted 12:15 pm U.S. ET, April 15
blogs Jim Henry is a special correspondent for Automotive News.
 
NEW YORK -- A lot of dealer principals and general managers swear by their female salespeople and F&I managers and wish they had more. But in the business world at large, auto industry careers for women are a “best-kept secret,” according to panelists at a conference hosted by the Women’s Automotive Association International this month in conjunction with the New York auto s ...
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Lenders' outcry against CFPB 'narratives' is justified

Posted 12:01 am U.S. ET, April 8
blogs Jim Henry is a special correspondent for Automotive News.
 
It’s no wonder auto lenders cried foul last month when the Consumer Financial Protection Bureau announced its plan to begin posting consumers’ first-person tales of their grievances with auto loans later this year. Lender trade groups issued statements complaining that publishing unverified, and conceivably false, narratives online could not only harm lenders’ reputations unjust ...
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No such thing as 'little' lies on credit apps

Posted 11:00 am U.S. ET, April 1
blogs Jim Henry is a special correspondent for Automotive News.
 
The Federal Trade Commission served up a forceful reminder last week that inflating a customer’s income on a credit application isn’t just a little white lie, even if it’s intended to “help” the customer. Besides possibly saddling the customer with a loan he or she can’t afford, it’s potentially bank fraud, FTC officials said. “This is felony fraud ...
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If dealers don't weigh in, they can't gripe

Posted 12:30 pm U.S. ET, March 25
blogs Jim Henry is a special correspondent for Automotive News.
 
Dealers have a chance right now to weigh in on what they like and don’t like about their lenders, and they shouldn’t miss the opportunity. The survey period for the J.D. Power U.S. Dealer Financing Satisfaction Study is at about the halfway point. Questionnaires went out via mail and email on March 1 and will be in the field through April. This year’s results should be published ...
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Size of average tax refund makes a decent down payment

Posted 11:45 am U.S. ET, March 18
blogs Jim Henry is a special correspondent for Automotive News.
 
For anybody keeping track -- which is to say, anybody interested in subprime auto lending – U.S. tax refunds have fallen a bit more behind than they were a few weeks ago. Tax refund season is typically the high point of the year for subprime auto loans. The IRS reported in a March 12 update that it had processed around 54.3 million refunds -- valued at about $162.1 billion -- as of March 6 ...
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Congressmen get testy with CFPB chief Cordray

Posted 11:45 am U.S. ET, March 11
blogs Jim Henry is a special correspondent for Automotive News.
 
The Consumer Financial Protection Bureau and its critics on the House Financial Services Committee traded jabs in a tense session last week as CFPB Director Richard Cordray presented the bureau’s semiannual report. Committee Chairman Jeb Hensarling, R-Texas, used the occasion to advocate again that a bipartisan committee should lead the CFPB, not a single director. Hensarling repeated the ...
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The auto fallout from tax refund delays

Posted 11:45 am U.S. ET, March 4
blogs Jim Henry is a special correspondent for Automotive News.
 
Tax refund season is typically the high point of the year for subprime auto lenders, but so far the early tax refund statistics are down slightly from a year ago. Through Feb. 20, the IRS had processed about 40 million refunds, down 1.1 percent from a year ago. The average refund was slightly higher at $3,210 vs. $3,116 tallied from Jan. 1 through Feb. 21, 2014, the IRS said. Tax refunds seem to ...
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Lender groups want answers from the CFPB

Posted 12:15 pm U.S. ET, Feb. 25
blogs Jim Henry is a special correspondent for Automotive News.
 
A letter sent last week by the American Financial Services Association and other trade associations to Richard Cordray, director of the Consumer Financial Protection Bureau, was aimed at prodding the CFPB to publicly respond to a study AFSA commissioned last year. “There certainly has been more than enough time for them to address some of the issues,” Chris Stinebert, CEO of AFSA, tol ...
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GM Financial-Chevy lease exclusivity seems likely

Posted 11:15 am U.S. ET, Feb. 18
blogs Jim Henry is a special correspondent for Automotive News.
 
There wasn’t much doubt, but General Motors disclosed for the first time in an SEC filing on Feb. 4 that it is considering plans to throw all Chevrolet lease incentives to GM Financial instead of sharing them among GM Financial, Ally Financial and U.S. Bank. GM Financial became GM’s exclusive preferred lease lender for the Buick and GMC brands this month and will take over those dutie ...
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Are flat finance fees inevitable? How to lessen the blow

Posted 11:30 am U.S. ET, Feb. 18
blogs Jamie LaReau covers the automotive retail beat for Automotive News.
 
Flat finance fees are coming. And if you now derive more than 40 percent of your F&I revenue per vehicle from a finance reserve, you’re in trouble. So says Larry Dorfman, CEO of F&I provider EasyCare. He warned that flat fees are on the horizon during a conversation on the sidelines of the National Automobile Dealers Association convention in San Francisco last month. Last week I ...
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A positive outlook for e-contracting

Posted 12:01 am U.S. ET, Feb. 11
blogs Jim Henry is a special correspondent for Automotive News.
 
When it comes to e-contracting, maybe the glass is finally more half full than half empty. Consider that e-contracting accounted for 56 percent of U.S. contracts for Ford Motor Credit Co. in 2014, according to Joy Falotico, executive vice president of marketing, sales and the Americas at the captive. Meanwhile, Toyota Financial Services said in September it was on track to generate 65 percent of ...
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Ally's Carpenter leaves on a high note

Posted 11:45 am U.S. ET, Feb. 4
blogs Jim Henry is a special correspondent for Automotive News.
 
Michael Carpenter, who retired as CEO of Ally Financial on Monday, can leave saying, “Mission accomplished.” On Carpenter’s watch, Ally repaid its U.S. government bailout plus a profit for taxpayers and freed itself of government ownership, effective in December. At the tail end of 2008 the U.S. Treasury rescued Ally’s predecessor company, GMAC, in the runup to General Mo ...
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Auto lenders cite discipline with U.S. sales booming

Posted 11:00 am U.S. ET, Jan. 28
blogs Jim Henry is a special correspondent for Automotive News.
 
SAN FRANCISCO -- “Discipline” was the watchword for auto lenders in panel discussions and interviews in and around the National Automobile Dealers Association convention here last week. Thasunda Duckett, CEO of Chase Auto Finance, repeatedly cited “prudence and discipline” in prepared remarks at a J.D. Power panel and in an interview afterward. Other competitors hit the s ...
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The lesson of the pizza delivery man

Posted 11:00 am U.S. ET, Jan. 21
blogs Jim Henry is a special correspondent for Automotive News.
 
Here’s a lesson for dealerships that run security cameras in the F&I office and elsewhere: Treat all store visitors well. A used-car dealership outside New Bedford, Mass. probably regrets -- an assumption, because the store’s not answering the phone -- chiseling a pizza delivery guy out of a tip, an episode captured on security cameras that somehow made its way onto social media l ...
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Lending practices face new scrutiny: States

Posted 11:30 am U.S. ET, Jan. 14
blogs Jim Henry is a special correspondent for Automotive News.
 
State officials aren’t far behind the federal government in the present crackdown on auto lenders, especially in the subprime segment. That means lenders -- and indirectly, dealers -- have more to worry about than just the Consumer Financial Protection Bureau. The New York Department of Financial Services in December announced a settlement worth $3 million in penalties plus another $8 mill ...
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Wishing auto lenders a happy, rational new year

Posted 10:30 am U.S. ET, Dec. 30
blogs Jim Henry is a special correspondent for Automotive News.
 
Auto lenders are about to embark on another year of worry that the other guy will go “irrational” and start making money-losing loans to gain U.S. market share. They fret they’ll be forced to decide whether to give up share or follow suit, sparking losses. But they probably don’t have much to worry about because U.S. auto sales are expected to keep growing. That rising tid ...
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Consent orders and the law of unintended consequences

Posted 11:14 am U.S. ET, Dec. 23
blogs Jim Henry is a special correspondent for Automotive News.
 
The Consumer Financial Protection Bureau quietly terminated a consent order with Minneapolis-based U.S. Bank last month, a contrast to the fuss it made in announcing the agreement in June 2013. At that time the bureau’s fanfare included a press release and media conference call with CFPB Director Richard Cordray. Cordray accused U.S. Bank and a partner, Dealers’ Financial Services of ...
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Will the CFPB redefine “larger”?

Posted 12:01 am U.S. ET, Dec. 17
blogs Jim Henry is a special correspondent for Automotive News.
 
Auto industry watchers that formally weighed in on the Consumer Financial Protection Bureau’s definition of “larger” auto lenders took predictable positions before the public comment period closed last week. The CFPB proposes to extend its jurisdiction to larger nonbanks, which it defines as those that generate 10,000 auto loans or leases annually. The American Financial Servic ...
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Who distorted what? Wording of CFPB statement will get its own investigation

Posted 11:30 am U.S. ET, Dec. 10
blogs Jim Henry is a special correspondent for Automotive News.
 
The ombudsman’s office for the Consumer Financial Protection Bureau said it would conduct an independent review into complaints that the CFPB’s press releases don’t match the consent orders they describe -- something auto finance insiders have complained about bitterly but privately, for fear of provoking the bureau. The complaint: that the press releases overhype the wrongdoing ...
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F&I jobs hold a powerful lure for women

Posted 11:00 am U.S. ET, Dec. 10
blogs Jamie LaReau covers the automotive retail beat for Automotive News.
 
It seems women are keen to work in the finance and insurance department. In fact, F&I has the highest percentage of women employees in a dealership, after the office/administration department. Women make up 92 percent of the office/administration staff at dealerships, according to the National Automobile Dealers Association’s 2014 Dealership Workforce Study Industry Report, released De ...
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Auto finance benefits from looser purse strings

Posted 12:01 am U.S. ET, Dec. 3
blogs Jim Henry is a special correspondent for Automotive News.
 
Here’s good macroeconomic news for the auto finance industry: The Federal Reserve Bank of New York says U.S. households have concluded a “deleveraging period,” a fancy way of saying households have quit spending less and saving more. Instead, they are spending more and borrowing more -- including $105 billion in auto loan and lease originations, the highest amount in almost 10 y ...
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Military ends paycheck deductions for car loans

Posted 12:01 am U.S. ET, Nov. 26
blogs Jim Henry is a special correspondent for Automotive News.
 
The U.S. Department of Defense last week made it impossible for service members to use the reliable but old-fashioned military allotment system to make auto loan payments -- a small-scale example of a couple of bad apples in auto lending ruining things for everyone else. In 2013 the CFPB accused an F&I products vendor and its auto lender partner of requiring military service members to sign u ...
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Free advice for consumers can be worth the price

Posted 12:01 am U.S. ET, Nov. 19
blogs Jim Henry is a special correspondent for Automotive News.
 
There’s a bright spot for dealerships that do a lot of business with automakers’ captive finance companies and preferred lenders, data on the website Wallet Hub show: Car manufacturers (that is, captives) charge the lowest auto loan rates for new cars, at 40 percent below average. Credit unions follow, at 24 percent below average. National banks charge rates that are close to average, ...
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Automotive News
Special Video Report
Smart use of phones, sales teams lift Wash. stores

Smart use of phones, sales teams lift Wash. stores

Sales employees at Ford and Hyundai of Kirkland have tapped smartphones to show how customers are “buying a relationship” with the group. Mon., May 4
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