Lenders offer assistance after Harvey

In the wake of Hurricane Harvey, auto lenders are stepping up to help Gulf Coast customers affected by the storm.

Informed by their experiences following Hurricane Katrina 12 years ago, captive lending arms including American Honda Financial Services, Ford Motor Credit, GM Financial, Hyundai Capital America and Toyota Financial Services are offering payment extensions, expanded phone and online payment options with no fees, and to redirect billing statements.

"We know customers in the areas hit hardest by Hurricane Harvey may need some assistance such as a little more time making payments, or may need help setting up online billing or getting their billing statements temporarily routed elsewhere," said Anna Sampang, vice president of service operations strategy at Toyota Financial Services.

Banks with large auto lending operations -- such as Bank of America, Santander, Sun Trust Bank and Wells Fargo -- have followed suit.

Santander Consumer USA, Ford Credit, Honda Financial Services, Hyundai Capital, Wells Fargo, Chase Auto Finance, among other lenders, are also temporarily reducing or halting collections activity in the area.

Chase Auto Finance, as well as captive finance companies at Subaru, Mazda, Maserati and Jaguar Land Rover which Chase supports or operates under private-label arrangements, are automatically waiving or refunding late fees through Sept. 10, offering loan payment extensions and lease payment deferrals and suppressing collection calls and repossessions for customers in affected areas, a spokeswoman said.

Chase has identified more than 140,000 customers in Federal Emergency Management Agency-designated areas.

The bank is also allowing its floorplan dealership clients to defer curtailment payments until Dec. 31, she said.

Laurie Kight, a Santander spokeswoman, said, "As we do whenever there is a FEMA-designated emergency, we work with customers to help them as they get back on their feet. For example, we [temporarily] suspend collections calls and repossessions, provide grace periods for payments, etc."

Several other lenders indicated they would be temporarily halting collection and repossession activity but declined to be named on the record.

Most lenders are working hard to make their customers aware of the relief measures, posting notifications on their websites and social media and notifying them by email and, in some cases, conventional mail.

Just days after Harvey hit, they were already fielding inquiries. "We have already heard from customers affected by Hurricane Harvey who are sharing a computer in a shelter and have asked for extensions," said Ford spokeswoman Meredith Libbey.

Though some lenders are offering solutions that apply to all customers in a geographic area, most would prefer to work with customers on a case-by-case basis.

"GM Financial may offer deferred payments for individuals in locations designated as federal disaster areas and will waive the fees associated with a deferment. Each situation is unique, so our representatives will help customers with a payment option that is best for them," said Bob Beatty, executive vice president of customer experience at GM Financial.

In the aftermath of Katrina, lenders also waived certain requirements on new loans for replacement vehicles, such as not counting short-term address changes against borrowers and lowering some documentation requirements.

Lenders commenting for this article suggested that it's too early to tell whether this will be repeated. Most were focused on the immediate issues of displaced customers and the state of floorplan-financed inventory at dealerships in the storm's path.

"We have adjusters who live in the flooded area and will send others as needed to evaluate vehicle inventory at dealerships we floorplan/insure as soon as we can safely gain access and the dealers are ready for us," said Ford's Libbey said in an email to Automotive News.

In addition to loan extensions, some local lenders, such as Texas Dow Employees Credit Union of Lake Jackson, Texas, are already offering a variety of emergency options to affected customers. Lake Jackson was directly in the storm's path.

"Ninety percent of our members are in the affected areas," said Chuck Smith, chief lending officer at TDECU. "We have 65,000 auto loans, plus or minus, and the majority of our members are in Harris County, Victoria/Gulf Coast markets and Brazoria county."

The credit union is offering skip-a-pay options for 60 days, new auto loans with no payments due for 90 days, and waiving all late fees associated with current customers. Smith noted that the skip option is not a deferment, but pushes the payments into the future. "That way they don't have to worry 60 days from now about how they're going to come up with those payments that were skipped."

The credit union is also offering personal loans -- termed "rePower" loans -- as a kind of GAP insurance product to customers whose cars may be totaled but have high insurance deductibles.

The program of new loans with no payments for 90 days will continue until things stabilize in the area. That might be awhile, Smith said. "Some of the numbers of cars that I've heard are unfathomable. If you've got 300,000 vehicles that are flooded, it's going to take a long time to get that taken care of."

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