Patty Covington cautioned me beforehand that the opening module of the National Automotive Finance Association’s Consumer Credit Compliance Certification Program would be like drinking from a firehose. Well, she didn’t exaggerate.
However, the way she and fellow instructor Eric Johnson delivered the material left me and the rest of the more than 100 students thirsty for more.
We all gathered this past week in Plano, Texas, for the program’s first in-person segment, delving into hundreds of pages of regulatory material accompanied by dozens of links to online sources. The Equal Opportunity Credit Act. The Gramm-Leach-Bliley Act. The Fair Credit Reporting Act. The instructors and Hudson Cook partners easily could have spent the two days we had together focused on just one of those topics. But we all know federal agencies have many tools in their regulatory chest, so the introductions to these rules had to be brisk.
Then there are all the acronyms. For example, UDAP and UDAAP. One letter makes a profound difference in creating “unfair and deceptive acts and practices” as well as “unfair, deceptive and ABUSIVE acts and practices.”
And missteps in those areas can cost your finance company thousands of dollars in fines, if not more. Use the search box on our website and enter the term “consent decree” to find out what kind of actions agencies such as the Consumer Financial Protection Bureau and the Federal Trade Commission have taken.
Oh yes, there are state regulators, too. They bring along statutes with definitions that can vary as much as the landscape in New Mexico versus Maine.
So when the NAF Association or industry partners such as we here at SubPrime Auto Finance News often repeat the importance of maintaining compliance, it’s not because we don’t have any other matters to discuss. It’s about maintaining survival.
Patty and Eric didn’t sugarcoat the current compliance landscape to our class, which included employees of finance companies and service providers as well as attorneys looking for continuing education and buy-here, pay-here dealers seeking information. They took a straightforward approach, summarizing information nicely while keeping attendees engaged.
In the coming days, I and the rest of the class must complete and pass the first-module exam with a score that’s much higher than the average year-round temperature in San Diego. Then two more online segments are to follow before the final segment that’s also a face-to-face time. Later this fall, the NAF Association hosts its next in-person module, which happens to coincide with at the Red Rock Resort and Casino in Las Vegas on Nov. 14-18.
Program students who are in town to complete the NAF Association compliance program also will receive complimentary registration for the , which is our industry gathering for finance company executives to discuss trends, best practices and more.
For industry managers who are unsure if the investment in this compliance program is worth it, let me offer this consideration. If a regulator determines your company KNOWINGLY disobeyed certain acts or perhaps was abusive to a customer, the penalty can surpass $1 million per INCIDENT. How many active accounts are in your portfolio? I can assure you the cost of the NAF Association’s program is a fraction of that potential figure.
The NAF Association is likely to host another opening module for industry professionals who missed last week’s opportunity. Contact the association through its website at for more details.
For now, I have plenty of studying to do.
Nick Zulovich is the senior editor of SubPrime Auto Finance News and is sharing updates about his journey to through the NAF Association’s Consumer Credit Compliance Certification Program. He can be reached at [email protected]