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The lending landscape is slightly frozen after a less-than-mild winter of a shifting geopolitical environment, regulatory ambiguity, rate stagnation, delinquencies hitting decade highs, and reports of borrower-driven fraud rising in auto lending.

Regulatory ambiguity plus rumblings of shifting priorities are leaving lenders to question the best path forward for risk management strategies.

What will the regulatory end game look like?  Time will tell. For now, Allied Solutions encourages AFSA’s readership to remain focused on needle-moving risk management priorities, regardless of regulatory uncertainty at the federal and state levels. At the end of the day, enforcement may change hands, but the rules of the road won’t.

3 Considerations to Stay Consistent and Compliant

1. Don’t get sidetracked.

There may be a high level of uncertainty in our industry, but brighter days are ahead. Good things (like balanced portfolios and higher recovery efficiency) come to those who are consistent in lending and recovery practices. While it is important to keep a pulse check on the bigger, geopolitical picture, don’t lose sight of your risk-management priorities and goals.

2. Cover your assets and reduce operational gaps.

The number of available repossession agents is down drastically – and not because of volume. Repossession moratoriums during the pandemic resulted in a significant drop in repossession agents. This is creating just one of the many operational gaps in recovery. For lower efficiency ratios, it is crucial to maintain a direct line of sight from first missed payment to charge off. Tighten up operational efficiencies with such always on, game-changing recovery tools as insurance status verification, repossessed damage claim settlements, and AI-powered collections. Our recently remodeled suite of specialized risk management solutions is helping lenders reduce cycle time in locating and repossessing collateral, decrease time from vehicle location to vehicle liquidation, increase recovery dollars, and boost lenders’ visibility throughout the recovery process, creating a cohesive recovery timeline from the start of a missed payment.

3. Do the right thing by your borrower.

While regulatory reform may be underway, consumer protection remains a priority. Regardless of what may or may not happen in Washington, DC, the states are expected to step up their game. Keep your borrowers at the center of your recovery programs, especially refunds for GAP waivers and other ancillary products. Borrower-centric practices proactively stay a step ahead of ambiguous or ambitious recovery regulations.

Are your risk management strategies in the fast lane? Learn more about specialized recovery tools.

Allied Solutions is an AFSA Premier Business Partner. Learn more about Allied’s comprehensive recovery optimization solutions here.

About Allied Solutions

Allied Solutions is one of the largest providers of insurance, lending, risk management, and data-driven solutions to auto finance companies and financial institutions in the US. With their consultative approach and commitment to the market, Allied Solutions uses technology-based solutions customized to meet the needs of 6,000 organizations. Allied Solutions is headquartered in Carmel, Indiana and maintains several offices strategically located across the country. Allied Solutions is a wholly owned and independently operated subsidiary of Securian Financial Group. Together, Allied and Securian boast 100+ years of industry experience.