Financing

TransUnion examines trio of trends involving refinancing

CHICAGO - 

Here is some new TransUnion data that could help managers within finance company underwriting departments when looking at an application attached to a vehicle that just rolled over the curb.

According to the recent TransUnion study of 1.5 million refinanced installment contracts originated in 2013 and 2014, there is a spike in refinance activity within a few days of an initial delivery.

“We found that some consumers, especially those interested in taking advantage of loyalty programs and bundled options, will refinance their loans a day or two after the original purchase,” said Brian Landau, senior vice president and automotive business leader at TransUnion.

In a phone conversation with SubPrime Auto Finance News, Landau explained that consumers seeking to refinance typically fall into three categories. There are individuals seeking a lower monthly payment. Oftentimes, these contract holders fall within the near-prime and subprime spaces, according to Landau.

Other consumers are loyal and want their installment contract with their personal finance institution rather than the provider that bought the contract at the dealership. Furthermore, Landau mentioned consumers who are looking to be aggressive, seeking refinancing to pay off their balance quicker and avoid interest.

What might be especially positive for those subprime customers, the TransUnion study indicated that the cash flow benefits from refinancing can be compelling. The average decrease in auto debt service — for those specifically seeking a payment reduction — was $52 per month. The average refinancing consumer achieved an APR reduction of 2.4 percent.

“In an increasingly competitive auto finance market, there is a lot of potential for auto lenders to tap into refinancing as a way to grow their business,” Landau said. “But market education is key.

“Nearly two-thirds of auto finance companies offer refinancing, but according to a recent Harris poll, less than half of consumers are aware they may use this option as part of their overall financing strategy. Broader recognition of this option can benefit both consumers and lenders seeking new business,” Landau continued.

Refinancing is quite prevalent in the mortgage space. Landau told SubPrime Auto Finance News why.

“With a mortgage you’re talking about a very large purchase with a very long term; a 30-year, standard fixed loan. With that, the consumer can become very sensitive to rate changes,” Landau said. “You’re looking for any advantage you can, especially given the collateral. Refinancing mortgages just makes a lot of sense because you can save a significant amount of money. Because of the term, the amount of money and the sensitivity to rate, refinancing has been top of mind for consumers and lenders that provide it.

TransUnion estimated that close to half of institutions (47 percent) that provide auto finance also have a refinance option. That prompted Landau and the TransUnion team to ask, “Why hasn’t it taken off in auto even though many lenders offer it?”

When asked for an answer, Landau replied, “It has to do with a shorter term and people not realizing they can refinance the loan even though they might only be in it for three or four years. Also, they look at it as a depreciating asset with a sunk cost.

“There could be some mental hoops that consumers have to get over to say, ‘There are some opportunities here to save a little bit of money to use elsewhere.’ The lending community also has to do a better job of getting the word out there that auto refinance could be a way to help them manage their monthly cash flows,” he went on to say.

And since auto refinancing happens during the early portion of the term, Landau pointed out that refinance contracts oftentimes perform much better with lower delinquencies.

“It’s a little bit of selection and the lenders being risk averse. Their ability to identify consumers who have the ability to make good on their loan, they can do this through the use of credit data and alternative data,” Landau said.

“What it shows is some lenders are taking advantage of the opportunity because everyone is concerned about early payment default. But once you get past that red zone, the first couple of months, you’re past that risk zone, and you know the consumer is going to make good on that purchase going forward,” he added.

And with summertime beginning to wind down in many places, TransUnion is thinking finance activity could heat up, especially in the refinancing arena.

“The end of summer is generally a key time for the auto industry, as better weather means more consumers are shopping for vehicles. It’s also a time of year when some consumers can find a deal before automakers roll out new models in the fall. This year, the prospect of rising automotive tariffs has also made it a hot time to buy,” Landau said.

“TransUnion found that a number of consumers are taking advantage of the opportunity to refinance their new purchases, despite the rising interest rate environment,” he continued. “Consumers who might be paying a somewhat higher interest rate on the loans they obtained through the dealership may find that refinancing can lower those interest rates or extend the loan term — in other words, help those same consumers manage their monthly cash flows.”

TransUnion plans to discuss more of its research and data during a webinar beginning at 2 p.m. ET on Aug. 23. Registration for the session .



RideShare Knight details 7 coverage plans for ride-sharing vehicles

LOUISVILLE, Ky. - 

After initially launching this spring, RideShare Knight offered more details about its vehicle service contract for Uber and Lyft drivers working in the ride-sharing economy today, launching a total of seven coverage plans.

Including multiple tiered plan options within each new coverage package, RideShare Knight explained that it is working to develop as many levels of protection as possible for the millions of independent drivers in the ride-sharing economy today.

“Right now, there are millions of individuals making a living as a ride-sharing driver, with no extended warranty for their vehicle,” said Max Zanan, founder and chief executive officer of RideShare Knight.

“While on the job, if they have a mechanical breakdown, Uber and Lyft are not liable for damages, instead making the driver absorb the cost of repairs. We now have plans for vehicles with up to 150,000 miles,” Zanan continued.

Complete extended warranties are available for current model year vehicles four years with up to 60,000 miles. The complete tier has three levels of coverage: platinum, gold and silver.

Flex extended warranties are available for any model year vehicles with 60,000 to 150,000 miles. The flex plan tier has four levels of coverage: preferred, select, powertrain and powertrain.

RideShare Knight claims that it is the first Uber extended warranty and Lyft extended warranty of its kind, providing independent drivers with the coverage they need to be protected on the road. By working with RideShare Knight coverage, these drivers now receive 24-hour roadside assistance, nationwide coverage, accessibility to all licensed mechanics, 0 percent APR financing and transferrable options to new vehicle owners.

“We want to ensure ride-sharing drivers are equipped against costly repairs with our variety of coverage plans today,” Zanan said. “We also want to expand vehicle eligibility to provide coverage to as many drivers as possible.”

For more information, visit .

Moxy Solutions and Redshield join F&I Express

GRAPEVINE, Texas - 

Moxy Solutions, a tool designed to streamline the sales and deal-closing process, joined the F&I Express platform this week.

The company added that this integration will also add aftermarket provider, Red Shield, to the F&I Express network of more than 160 providers.

IMOXY can provide an easy way to monitor transactions, view rate programs and identify any special rules or guidelines from various administrators

Red Shield offers protection plans and other products to cars, RVs and motorcycles.

“F&I Express integration sets the stage for expanding our IMOXY web and mobile portal to agents, VSC/aftermarket administrators and financial entities at an accelerated rate,” said JJ Demma, managing partner at Moxy Solutions.

F&I Express chief executive officer and president Brian Reed added, “One of our core values at F&I Express is relationship building. We look forward to the opportunity to expand our network by adding Moxy Solutions and Red Shield to the platform.”

Analyzing why private equity wants back in non-prime market

SAN DIEGO - 

The market fundamentals in non-prime are signaling positive. A strong economy and low unemployment are contributing to stabilization in consumer credit scores. Auto defaults are at the lowest point with one full quarter of improvements under the belt.

There continue to be new auto bond issuances, and the spreads on these lowest-rated of these securities are tightening. Competition in the secondary market for non-prime portfolios is high, thanks to the portfolio quality of the underlying assets holding up.

By many measures beyond just these, the non-prime market is showing signs of a change in trend from bear to bull. Whereas private equity (PE) interest was ice cold, things are starting to thaw. Now PE wants back in. But, why now, and why do they want back in?

Let’s take a walk down memory lane

Competition for deals amongst private equity firms for unsecured lending opportunities for the past few years has grown more and more intense. In the prior market cycle just following the Great Recession, Private Equity had excess un-deployed capital that was intended for residential real estate. They pivoted their focus to high-yield, non-prime auto loans.

But, private equity returns in non-prime auto weren’t there. And, the exit wasn’t there either. So, they took their lumps and pivoted again, this time to unsecured assets like financing elective surgery and jewelry purchases. They also pivoted their focus to fintech, placing bets on disruption, and that big banks will adopt this tech. To private equity, fintech offers an exit path more like that of the subprime bureaus, where each major bureau has acquired at least one of these “big data / alternative bureau” providers.

The private equity bets on unsecured, and fintech have been good ones. So, why do they want back in on auto?

This time it will be different 

The disruptive nature of fintech is the reason is why. Fintech is completely restructuring how consumers and auto finance companies engage. Fintech has commoditized the application process, the process to evaluate risk, and how customers are serviced. Whereas in the prior market cycle, PE would take equity position in a “soup to nuts” non-prime operations, now they are focusing more on the assets and balance sheet financing. The value of the traditional auto finance company has been morphed from one that has a superior scorecard, or collection process, PE knows that Fintech has largely outsourced and commoditized what were strategic assets. Why build your own custom loan origination or loan servicing system when myriad outsourced options exist? And, why re-invent the wheel? One must look no further than what Uber did to the value of a NY Taxi medallion, and you will see what they are seeing.

The “Amazonification” of financial services businesses is what fintech is all about.

Let’s hear it directly from the source

And who better to hear it from than from the PE folks themselves? Some recent conversations with PE firms and the investment bankers that work directly with them provide us some valuable insight as to why this next cycle will be different. It will be different because of their shift to unsecured options for higher yield (as a suitable replacement to auto), but more importantly due to Fintech disruption. What constitutes itself as an asset of a financial services company is different than just a few years ago. Heck, what comprises what we now call a financial services company is different than a few years back.

Let’s look at the top three themes from these conversations:

1. Balance sheet

PE interest is squarely on the balance sheet and resulting deal structures will continue to show it. Larger PE firms are looking to be a senior secured lender, with capital deployments north of $40 million — directly into collateral.

Loan originators that could use more balance sheet to originate more can benefit from PE investment. And, they can also be effective as a capital bridge to securitizations — as discussed before, a very healthy and stable market.

2. Fintech

Fintech firms trade on a multiple of revenues, while finance companies trade on a multiple of earnings. And, a good fintech solution done right can provide value to small finance companies and big banks, which provides a lot of click revenue. So, this is just a case of investing money into something that will return more money.

Not to be discounted is the actual value of the fintech being created and made available to the non-prime finance community. Take for example a small, regional finance company that just 10 years ago would be operating on spreadsheets and a small IT footprint. That same company can operate in a cost-efficient, cloud-based environment, and utilize AI-based solutions that root out fraud, improve credit selection, drive behavioral scoring — all on subscription or a per-click basis. 

3. Confidence in outsourced servicers

Without confidence in outsourced servicers, PE would not be diving back into the non-prime asset class. The market for secondary whole loan trades has been hot and is not cooling down thanks to increasing interest from PE investors. And, that confidence is bolstered by a few key points:

• Outsourced servicers are complex; many are servicers of their own debt that rent out their additional capacity, and the result is a more stable place to park your portfolio

• Outsourced incentives are changing; we are hearing more and more about servicers putting “skin” in the game and taking compensation that is tied to targets shared with the portfolio owner

• What makes an outsourced servicer is less about geography, and more about supplementing specific skill sets, and this is providing cost savings while improving portfolio performance

• Outsourced servicers can deploy technology, training, and analytics in ways that benefit multiple companies in much the same way that Fintech can disrupt

• A more sympathetic Consumer Financial Protection Bureau changes the outlook as well

The PE firms interviewed agreed that their confidence in outsourced servicers is an enabler to giving them the confidence to get more aggressive on deploying their capital into auto assets and knowing that the results will be on target.

The democratization of auto finance

The retail car sales process is not what it used to be. You can find your car online and pick it up from a vending machine. Or, you can use your car as a taxi. Or, you can subscribe to a car service. Or, you can just rent a bike or a scooter. It is no longer about “car ownership.” It’s about mobility. The disruption of the retail car model and the democratization of mobility is in full swing.

The democratization of auto finance is just getting started. And increased PE interest has a track record of begetting more PE interest. Last time around, PE took some lumps along with the finance companies that they invested in. There were no winners. This time around the game board is set up a bit differently. Finance companies will win this time around if they can effectively utilize PE capital in its updated format. Fintech companies will continue to win, as the early cloud-based, and big-data companies already have. Finally, outsourced servicers will win by becoming a more mainstream and standard option that will see increasing demand as more and more PE firms choose to engage them.

Joel Kennedy is a director with Spinnaker Consulting Group. He has a passion for growing and improving auto finance ecosystem. He has more than 23 years of experience helping big banks down to start-up finance companies to build, grow, improve, and repeat. He can be reached at (240) 308-2169 or [email protected]

APRs continue to rise as Fed passes on rate-hike chance

CARY, N.C. - 

As down payments and the amount financed for new- and used-vehicle deliveries at franchised dealerships stay on a steady pace, Edmunds noticed the impact of the Federal Reserve pushing interest rates higher are starting to leave a mark on APRs.

Analysts noticed the annual percentage rate (APR) on financed new vehicles averaged 5.74 percent in July compared to 4.77 percent in July of last year, representing the largest year-over-year jump that Edmunds has seen so far in 2018.

While not quite as dramatic as the nearly 1 percentage point rise for new vehicles, APRs for financed used vehicles rose noticeably in July, too, as Edmunds saw the metric moved from 7.46 percent to 8.31 percent.

Edmunds analysts point to the scarcity of zero percent finance deals as the driving force behind interest rates sustaining near-record average highs in July.

Analysts indicated zero percent finance deals were slower to materialize for car shoppers in July as zero percent finance deals accounted for 6.92 percent of sales in July, compared to 11.34 percent in July 2017 and 11.18 percent in July 2013. Edmunds noted that this is the lowest share of zero percent finance deals seen in July since 2005.

“Zero percent finance deals typically peak in summer months as a tried-and-true automaker method of spurring outgoing model-year vehicle sales, so this appears to mark the end of a fairly long-lived tradition for the industry,” said Jeremy Acevedo, Edmunds’ manager of industry analysis. “While inventory isn't at the alarming level it was at this stage last year, how automakers navigate their model-year sell down will be critical through the rest of the year as the market contracts and prices continue to rise.

“Interest rates might be down slightly month-over-month, but they're still hovering near a nine-year high,” Acevedo continued. “With more Fed rate hikes ahead, it's not likely that APRs will be going down anytime soon.”

The Fed passed on its chance this week to adjust rates as the Federal Open Market Committee decided unanimously to maintain the target range for the federal funds rate at 1.75 to 2 percent.

“The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2-percent inflation,” the Fed said in its policy statement released on Wednesday.

The next time the Fed can modify interest rates comes on Sept. 26 with two more opportunities available in November and December.

No matter what the federal policymakers might do, it appears automakers are being more judicious with how much cash they’re slapping on hoods of new models.

“Incentives spending in July was relatively restrained as dealer inventory appears to be at a comfortable level; a sign automakers are managing production well in the post-peak era,” said Brad Korner, general manager for Cox Automotive Rates and Incentives.

“Regional incentives are still being used by OEMs where market share battles are heaviest,” Korner continued. “This use of regional, VIN-specific, conditional offers are smart, strategic investments by OEMS to apply incentives as necessary, protecting margins on the remainder of the transactions. New 2019 models in popular vehicle segments are selling with little or no cash offers.” 

Meanwhile, finance companies kept down payments and the total amount financed on a steady track in July.

Edmunds indicated down payments for new-vehicle deliveries came in at $3,970 in July. That’s down $25 from the previous month but up $349 from a year ago.

Analysts added that down payments for financed used models stood at $2,582 in July. While that’s off by $30 on a sequential basis, the amount is $114 higher than a year earlier.

As far as the total amount financed per delivery in July, Edmunds pinpointed the amount at $30,903 for new cars and at $21,574. Those figures are $214 and $293 higher year-over-year, respectively.

KAR taps former captive exec to oversee Preferred Warranties

CARMEL, Ind. - 

KAR Auction Services on Wednesday elevated one of its executives with significant captive finance company experience to lead its division that offers vehicle service contracts.

KAR announced Edmund Field has been named president of the company’s Preferred Warranties business unit. PWI serves independent dealers and smaller franchised stores as well as powersports dealers — offering extended service contract protection plans for pre-owned units. 

The company indicated Field will be responsible for leading PWI’s operations and digital and mobile product development and advancing its market growth strategies. He will be based at KAR’s global headquarters in Carmel, Ind.  

“Edmund joins PWI at a time of great opportunity, as the company nears the completion of our nationwide expansion by the end of the year,” said Paul Kramarz, senior vice president of risk at KAR business unit, AFC.

“Edmund’s extensive experience and leadership skills will be instrumental in PWI aligning with KAR strategic initiatives and achieving a leading position within the industry,” Kramarz continued.

With more than 20 years of automotive industry experience, Field joined KAR earlier this year as the director of new product development. Before coming to KAR, Field was at Volkswagen Group and VW Credit. He supported the areas of insurance, sales and business development, new product development, center operations, fleet management and manufacturing.

During his time at VW Credit, Field was responsible for the development and launch of Volkswagen Financial Protection Services as a start-up insurance entity selling and administering a full suite of insurance protection products to Audi, VW and Ducati dealers in the U.S. market.

Field also held several management roles at VCI’s customer service center in Libertyville, Ill.

EFG Companies enhances F&I training to create six-figure revenue rises

DALLAS - 

Figures that include six digits and a comma typically catch the attention of dealership management.

EFG Companies recently calculated that the average EFG trainee generates an additional $204,605 per year in F&I income through a 22-percent performance increase. To help sustain this performance increase, EFG Companies announced the launch of EFG Learning Opps Through Virtual Engagement (LOVE), a dynamic digital portal designed to boost F&I Producer knowledge, reinforces training learnings, and reduces the cost of a poor hiring decision for a dealership.

EFG Companies acknowledged that many dealer principals and general managers complain that their past experience in sending F&I producers to training only impacts per-month results in the short term. In addition, when training is not reinforced in the dealership, improvements are quickly negated by diminishing returns.

EFG Companies conducted a six-month analysis of the true impact of its industry-leading, behavior-based F&I training combined with its in-store engagement model. The company compiled a series of metrics, both pre- and post-training, with both the trainees and their dealership management.

EFG trainee performance showed:

• EFG’s guided-discovery training represented $204,605.00 in additional F&I income per producer per year, based on 80 turns per producer per month.

• Average trainee F&I performance increased 22 percent.

• PRU increased from $967 to $1,180 on average.

“It’s clear that using multi-sensory learning methods with interactive tools better enables F&I managers to effectively deliver measurable results to a dealership’s bottom line,” said John Pappanastos, president and chief executive officer of EFG Companies. “That’s why we developed EFG LOVE for our F&I class graduates.

“This analysis proved that our proprietary behavior-based approach to F&I producer development can generate more than $1.13 million in average F&I revenue per producer per year,” Pappanastos continued. With an average training cost of $2,000 per producer, the dealer sees a 100-times return on the initial investment in the first year.”

In addition to fortifying the lessons learned from EFG’s in-classroom training, EFG LOVE can equip dealers with information and best practices on how to both sell to, and employ, the soon-to-be largest generation in the workforce with the most buying power — millennials.

EFG Companies pointed out that numerous industry studies have shown that retail automotive faces a recruiting and staffing crisis. The 2017 National Automobile Dealers Association Workforce Study reported that retail automotive suffered from a 43 percent turnover rate, an 88 percent attrition rate among female new hires, and a below average rate of millennial new hires when compared to other industries.

And 65 percent of dealers state that recruiting and hiring is their No. 1 challenge — greater than customer acquisition or generating revenue.  

In EFG’s more than 40-year history, the company has placed hundreds of top performers at automotive dealerships across the country. This has resulted in the deliberate build-out of a core-competency sourcing model to identify the core qualities of Top Performers.

EFG LOVE pairs this top performer profile with industry statistics and trends to better enable dealers to develop high-performing teams.

“EFG LOVE helps shorten the onboarding time for new hires, keeps employees motivated and accelerates the knowledge growth needed for a successful career,” said Steve Roennau, vice president of training and compliance with EFG Companies. “We created the content to enable the user to self-select actionable lessons in multiple digital formats.

“The more a producer can easily select materials that help them overcome their daily challenges, the more they will display the successful behaviors that they learned in our training,” Roennau went on to say.

EFG closed by mentioning turnover and failure to recruit high-performing professionals directly impacts a dealership’s bottom line. For example, a single poor hiring decision in F&I can easily result in up to $75,000 in lost profit due to onboarding costs and lost production, according to its analysis.

To see one of the many training videos featured on EFG LOVE, .

National Auto Care acquired by different private equity firm

PHILADELPHIA, LOS ANGELES and NEW YORK - 

National Auto Care Corp. is changing hands again.

The provider of F&I products, administration, consulting services, training and marketing support to independent agents, insurance companies, financial institutions, third-party administrators and credit unions, has entered into an agreement to be acquired by Lovell Minnick Partners, a private equity firm specializing in financial and related business services companies.

Financial terms of the transaction were not disclosed, according to a news release distributed on Monday. The announcement did indicate that the transaction is expected to close in the third quarter of 2018.

NAC, established in 1984 and acquired by Trivest Partners in 2012, is headquartered in Jacksonville, Fla. NAC is one of the longest operating providers of products such as vehicle service contracts, guaranteed asset protection, limited warranty, tire, wheel and a full suite of ancillary protection products nationwide.

Through its independent agents, NAC supports more than 2,300 partners that distribute its products. These partners include automobile dealers, credit unions, financial services companies, recreational dealers and other strategic partners across North America.

“NAC is the premier national market leader in developing innovative products that help protect consumers from a wide range of risks that can arise with vehicle or powersport ownership,” said Trevor Rich, a partner at LMP.

“We look forward to partnering with president and CEO Tony Wanderon, who is an accomplished veteran and innovator in the automotive protection industry, and his experienced team at NAC, as our investment positions the company to aggressively pursue acquisitions that complement its strong growth trajectory.”

NAC has invested significantly in the development and implementation of proprietary and third-party technology during the past four years, empowering its dealer and distributor partners with digital contract remittance and customized support services.

In addition, the company provides its distributor partners with a unique variety of support services and incentive programs that drive customer loyalty and strengthen their agency value.

“LMP has strong experience investing in service-oriented businesses across the finance and insurance value chain that will prove invaluable as NAC builds upon our flexible and customized solutions to support our agency distributor partners in driving sales and profitability,” Wanderon said.

“We believe LMP’s expertise in identifying and negotiating strategic transactions will add significant value to our acquisition strategy,” he added.

Troy Templeton, managing partner at Trivest Partners, described the relationship with NAC cultivated since 2012.

“Since our investment six years ago, NAC has grown to be one of the premier providers in the F&I space, and we are extremely proud of our partnership and investment in such an exciting company,” Templeton said.

“We are confident that NAC and the management team are well positioned for continued growth and success through their partnership with LMP,” he went on to say.

Houlihan Lokey served as financial adviser to NAC and Trivest, and Sandler O’Neill was adviser to LMP. Madison Capital Funding and NewStar Financial are providing debt financing for the transaction.

RouteOne adds C&F Finance to growing list of available e-contracting finance sources

FARMINGTON HILLS, Mich. - 

Late last week, RouteOne announced that C&F Finance Co. is now an available e-contracting finance source for dealers utilizing the RouteOne platform.

The move was made in an effort to augment the digital exchange of critical contract documents and data between dealers and finance sources to increase efficiency and reduce contracts in transit.

C&F Finance, headquartered in Richmond, Va., is a leader in indirect auto financing, providing vehicle finance in multiple states throughout the U.S. Officials highlighted C&F benefited from a streamlined technical implementation process due to the e-contracting certification that its loan origination system (LOS), defiSOLUTIONS, had previously undergone with RouteOne.

“We are excited about partnering with RouteOne and offering e-contracting to our dealers,” C&F Finance executive vice president and chief credit officer Shawn Moore said.

“Cutting down funding time and gaining efficiencies will greatly add value to our funding processes,” Moore continued. “We’re certain our best in class service will be further enhanced with this feature.”

RouteOne is one of the industry leaders in e-contracting, booking more than 10 million e-contracts to date. RouteOne has more than 7,200 active e-contracting dealers and more than 50 finance sources in its rapidly growing e-contracting customer base.

“We strive to continually deliver our customers solutions that streamline and solve challenges in the auto finance industry,”, RouteOne chief operating officer Brad Rogers said. “e-contracting is a solution that benefits all parties involved: dealer, finance source and consumer.

“C&F Finance is a welcome addition to our e-contracting platform, and we are pleased to offer their services to our dealer base,” Rogers went on to say.

Dealers interested in e-contracting should their RouteOne business development manager at (866) 768-8301 or .

Equifax acquires DataX to enhance alternative-data capabilities

ATLANTA - 

Now all three major credit bureaus have made a move to bolster their offerings within the alternative-data space.

On Monday, Equifax announced that it has acquired DataX, a leading specialty finance credit reporting agency and alternative data provider to finance companies nationwide.

Through DataX, Equifax highlighted that it can help finance companies expand credit access and broaden financial inclusion for more consumers, specifically in underbanked populations. DataX’s data assets complement the Equifax core credit database adding alternative credit and payment data, analytics and identity solutions on underbanked consumers to the installment loan, rent-to-own and lease-to-own markets.

Additional offerings include credit reporting, ID verification, bank account verification and custom risk services.

“Giving consumers fair access to credit has always been a key economic driver for upward mobility, and this acquisition will help more consumers gain access to credit and capital,” said Trey Loughran, president of United States information solutions at Equifax.

“The combination of DataX’s data with Equifax’s unique and robust data assets will add more depth to consumer’s profiles and will help lenders expand borrowing options,” Loughran continued.

Loughran went on to note that the acquisition of DataX complements other unique Equifax data assets that help provide greater depth and reach to those seeking credit such as The Work Number, one of the nation’s largest centralized repository of payroll data, managed by Equifax.

“Only 39 percent of Americans are able to cover a $1,000 emergency expense, which means the majority of people at some point will need some type of financial assistance,” said Jon Geidel, president of DataX.

“For more than 14 years, DataX’s mission has been to support our partners to find more reasons to include underbanked consumers. Joining Equifax complements our mission and affords consumers better access to the credit they deserve to meet their financial needs,” Geidel went on to say.

DataX and its employees are now part of the Equifax Banking and Lending division, according to Monday’s announcement.

The Equifax acquisition continues an alternative-data trend that stretches back to last November when TransUnion purchased FactorTrust.

And this past March, Experian highlighted how the acquisition of Clarity Services expanded its services in the alternative-data space.

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