Interesting time at the recent industry-wide repossession conferences called NARS (North American Reposssessors Summit). There was a cross-section of the many players in the industry….big banks, captive finance organizations, repossessors, forwarders, insurance companies, ALPR camera companies. They were all there.
One of the more interesting (and chilling) discussions was by an attorney , Michael Dougherty of the law firm Weltman, Weinberg and Reis. This huge firm specialized in “creditors’ rights”, so generally they represent the lender side of the equation. What the creditors in the room heard shook them up a bit, to say the least.
Atty. Dougherty forewarned all about the implications of the impending Consumer Financial Protection Bureau… this 600-lb. government gorilla will have a free hand to reach out and jerk the chain of any auto lender pretty much at will. And one of the triggers for this chain-jerking will be the CFPB’s insistance of compliance regarding information handling up and down the entire supply chain.
What’s the big deal?
Many of the larger forwarders and even regional repossession agencies have met SAS-70 compliance regarding information handling…..in their office!
Now what the banks are hearing is that the actual repossessor in the field might be the weakest link in the security chain…the proverbial clipboard on the front seat of the tow truck containing a treasure trove of confidential, non-public-personal-information.
Leaving a clipboard of hardcopy repo assignments on the counter at Waffle House would violate a stack of federal laws, and the creditor will be responsible, facing the feds and potentially getting slammed with huge fines.
It was dawning on the creditors at the NARS event that their assigning accounts through one of the troubled “forwarders” meant that their uber-confidential-land-youself-in-federal-court-information is in the hands of….well, who the heck even knows? They don’t. All they knew was that they were getting it done at the right price.
It means that the creditor has to make sure that the guy in the driveway is a smart repossessor who knows the law, not some repo newbie that the forwarder found from a Craigslist ad. And “smart repossessors” and “cheap repo guys” aren’t often found riding in the same cab of a tow truck.
Bankers, auto lenders, repossessors, and forwarding companies: welcome to the new world of the Consumer Financial Protection Bureau.