Credit Acceptance is Served Subpoena From Mississippi AG

Mississippi Attorney General James Hood (Via Wikimedia Commons)

The subprime auto lender Credit Acceptance Corp. disclosed that it has received a subpoena from the Mississippi Attorney General for issues with the company’s origination and collection of loans. 

The subpoena was issued on Aug. 14 and the company said it is cooperating with the inquiry, according to a Securities and Exchange Commission filing late last week.

“We cannot predict the eventual scope, duration, or outcome at this time,” the company said in the filing. “As a result, we are unable to estimate the reasonably possible loss or range of reasonably possible loss arising from this investigation.”

Neither Credit Acceptance nor the state attorney general’s office responded for comment by press time.

In March 2016, Credit Acceptance received a similar subpoena from the Attorney General of Maryland “relating to the company’s repossession and sales policies and procedures in the state,” according to the company’s 10-Q filing.

Additionally, Credit Acceptance was tapped by the Federal Trade Commission in late 2016 for more information regarding the company’s use of kill switches.

Yet, this most recent disclosure adds another layer of complexity because it specifically cites the company’s originations. In March, Santander Consumer USA entered into a written agreement with Federal Reserve Bank of Boston over similar allegations. Santander paid $25.9 million to resolve an investigation in two states regarding the financing and securitization of subprime auto loans that were deemed “unfair” to the consumer.

Credit Acceptance has continued to originate higher loan volumes and extend terms, even while defaults and delinquencies rise, the company reported in second- quarter earnings. Still, the company’s total outstandings grew to $4.6 billion in the quarter — a 21% increase year over year.

For more content like this, check out the 17th annual Auto Finance Summit, which will take place on Oct. 25-27 at the Wynn Las Vegas. To learn more about this year’s event — or to register — visit the Summit’s homepage here.

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OneMain Financial Solicits Takeover Bids

Via Wikimedia Commons

OneMain Financial, a subprime lender specializing in auto and personal loans, is actively soliciting buyers for a takeover bid, according to news outlets citing sources familiar with the matter.

This proposed acquisition is the latest in a long line of successions. Citigroup’s former consumer lending arm, CitiFinancial, renamed itself OneMain in 2011 following the financial crisis. Then Springleaf Financial, an online personal loan lender, acquired OneMain in 2015 and converted its branding under the OneMain name.  

There are a number of parties interested in buying the company, including rival lenders and private-equity firms, according to anonymous sources cited by The Wall Street Journal.

OneMain did not respond to a request for comment by press time. Notably, the request was made during a bank holiday and this article will be updated appropriately.

Although the company does not break out auto loans in its earnings, President and Chief Executive Jay Levine said that auto comprised 24% of the company’s total originations in the second quarter, up from 18% in the fourth quarter of 2016. Given that the company’s total consumer and insurance originations totaled $3 billion in 2Q, that would place auto originations at roughly $720,000, according to the company’s latest earnings report.

OneMain’s growth in the auto sector has hinged on its direct lending product and title loan program.

“We are not in the auto finance business as the industry generally defines it,” Levine said back on the company’s first-quarter earnings call. “Our basic loan product continues to be the traditional installment loan, which — in certain cases — may be secured by the borrower’s title vehicle. Our loans are underwritten against the borrower’s ability to repay, and the presence of collateral serves to reduce the bulk frequency with law severity eating much less in the back.”

OneMain is one of the only companies on the secondary market securitizing this type of specialty loan, which makes it an entity to watch, Amy Martin, lead analyst for Auto ABS at S&P Global, said at the 2017 Nonprime Auto Financing Conference.

“The OneMain deal is very different from the others listed here,” she said. “These individuals did not go and secure the loan at the time they bought the vehicle; this is basically cash-out refinancing, so this is really a new type of financing being securitized and we do not consider it the same as title lending.”

OneMain also does not break out auto loan outstandings, but Levin said during the 2Q earnings call that the company holds $2.5 billion of secured direct auto loans representing 40% of the total portfolio.

For more content like this, check out the 17th annual Auto Finance Summit, which will take place on Oct. 25-27 at the Wynn Las Vegas. To learn more about this year’s event — or to register — visit the Summit’s homepage here.

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Mississippi attorney general subpoenas Credit Acceptance

Mississippi attorney general subpoenas Credit Acceptance

SOUTHFIELD, Mich. — For the second time in about a year, Credit Acceptance is dealing with an attorney general subpoena.

The finance company acknowledged late on Friday through a filing with the Securities and Exchange Commission that it received a subpoena from the Mississippi attorney general on Aug.

Drag Racing – The Perfect Launch

Drag racing, a contest between two cars beginning from a complete stop over a distance of a 1/4 mile (1320 feet) depends heavily on first 60 feet of the race, or the launch. The technique used for launching varies greatly depending on the how the car is equipped. The type of transmission, which wheels are being driven, tires, power, suspension and track preparation all play key roles in how to go about getting the best launch possible from the car.

Improvements on the time it takes for the car to travel the first 60 feet down the track have significant implications on the final ET (estimated time). As a general rule, improvements in the 60 foot time, are magnified by 2x on your final ET. For example, a Dodge Viper GTS that runs a 12.2 @ 120 MPH in the 1/4 mile with a 60 foot time of 2.0 can make significant improvements to it’s 1/4 mile times by obtaining a better launch. If the Dodge Viper GTS is able cut .2 (two tenths) of a second off it it’s 60 foot time, by covering the first 60 feet in 1.8 seconds, it’s final ET for the 1/4 mile would be around 11.8 @ 119 – 121MPH. More examples can be found by searching through the thousands of 60 foot records in the drag racing database.

The best possible launch is obtained by obtaining the optimal balance of applying the most amount of power to the ground with the least amount of wheel spin. If too much power is applied during the launch and the tires spin, the resulting 60 foot time will be poor. The same goes for not applying enough power, thereby causing the car’s engine to bog, and having the car limp off the line slowly.

When launching a car with an automatic transmission, a technique called power braking is used. After properly staging the car at the drag strip’s staging lane, tightly hold down the brake with one foot, while slowly applying the accelerator peddle with the other foot. The car’s engine RPM (revolutions per minute) should slowly increase to a point where the car will either start to move or start spinning the tires. Hold down both the brake and accelerator peddles just below the point where the car is starting to move or spinning the tires. When the christmas tree lights reach the last amber light before the green, lift off of the brake and slowly push the gas peddle all the way down. The correct RPM to launch at will be different every car depending on all of the variables mentioned earlier. Start conservative with the first launch and keep increasing the RPM at which the car is launched at during the subsequent runs. If the car starts spinning the tires after the launch, lower the launch RPM and try again.

When launching a car with a manual transmission come to a complete stop after the car is properly staged. Press the clutch in all the way with one foot while pressing the accelerator peddle down with the other foot, raising the engine RPM to a constant moderate level for the first launch. Lift up on the clutch peddle to the point where the car is just about to start moving and hold both peddles still. When the christmas tree lights reach the last amber before the green, slowly release the clutch while quickly applying the accelerator peddle enough to launch the car quickly, but not too much to induce a large amount of wheel spin. Start conservative with the first launch and keep increasing the RPM at which the car is launched at during the subsequent runs. If the car starts spinning the tires too much after the launch, lower the launch RPM and try again.

To obtain better launches and bring down 60 foot times even more, the use of drag radial or full slick tires can be used on more powerful cars that have trouble launching at any RPM on regular street tires. Drag radials and full slicks usually require a burnout to heat up the tires and clean them from debris for optimum performance. A burnout is a rapid spinning of the car’s tires while the car stays relatively still.

All wheel drive cars (AWD) are typically the easiest to launch because the engine’s power is distributed to 4 wheels instead of two. Rear wheel drive (RWD) cars typically launch better than front wheel drive (FWD) due to the transfer of weight to the rear tires during the launch, causing an increase in traction. If the car has aftermarket adjustable suspension, adjustments can be made specific for drag racing to increase the weight transfer to the driving wheels.

The track’s launch pad preparation also plays an important role in how well and how hard cars can launch. The launch area is usually prepped with traction compounds to add to the stickiness of the track. A well prepped track will definitely help drop 60 foot times and result in lower 1/4 mile times.

During the breaks and cool down periods between drag racing runs, make detailed notes about how you launched on the back of each timeslip. These notes can help you diagnose launching issues, fine-tune subsequent launches and show improvements in the search for The Perfect Launch.

Source by Brooks Weisblat

MotoLease to Release Live-Inventory Website for Motorcyles

LOS ANGELES — MotoLease LLC is preparing to launch a new live-inventory, real-time financing website for motorcycles called, Powersports Finance has learned.

The website is a “nationwide classifieds website for MotoLease dealers for new and used motorcycles,” Mitch Palm, MotoLease’s marketing coordinator, said during the leasing provider’s dealer training seminars yesterday. Other powersports and marine units, such as boats and ATVs, will also be on the website. will only feature inventory from MotoLease-affiliated dealers, he added. Visitors can browse the live-inventory — which is updated daily at midnight — and be pre-qualified for a lease instantly.

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VC Firm Poised to Invest in Mobility Startups by Yearend

InvestmentAutotech Ventures, a venture capital firm that primarily invests in startups, will announce several investments in ground transportation companies within the next few months, Quin Garcia, managing director of the VC, told Auto Finance News.

“We are actively looking at several companies across the ground transportation spectrum, but unfortunately cannot go into specifics beyond that,” he said. Investments in ground transportation and auto finance startups have been heating up over the past few years, in part due to innovative technologies such as artificial intelligence, autonomous vehicles, and e-commerce.

Credit decisioning platform ZestFinance — which recently partnered with Ford Motor Credit Co. — raised over $67 million in funding, for example. Meanwhile, AutoGravity raised $80 million to date and counts Daimler AG and VW Credit Inc. among its investors.

Based in Menlo Park, Calif., Autotech Ventures’ first investment was in Lyft in 2016 and has since invested in seven additional startups. These include stakes in Outdoorsy, an online marketplace of shared recreational vehicles; Metawave, a developer of autonomous vehicle radar; and Volta, a free EV charging solution funded by advertising.

Overall, the company plans to invest in 10 to 15 more startups out of the current $120 million dollar fund, Garcia said.

For more content like this, check out the 17th annual Auto Finance Summit, which will take place on Oct. 25-27 at the Wynn Las Vegas. To learn more about this year’s event– or to register — visit the Summit’s homepage here.

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The Function and Usage of Gearboxes

A gearbox (also called transmission) provides speed and torque conversions from a rotating power source to another device using gear ratios. It can be used in various situations such as fixed machines, pedal bicycles, and anywhere else rotational speed and torque needs to be adapted. But the most common place is in motor vehicles, where the gearbox adapts the output of the internal combustion engine to the drive wheels. Because these engines need to be operated at a relatively high rotational speed, they can not be used in many operations such as starting or stopping.

As gearboxes are so widely used in motor vehicles, it is obvious that they must be largely used in cars. With the development of our economy, more and more cars are consumed, as a result, gearboxes are playing more important role in our daily life. Although many people have cars, few of them have the knowledge of how a car works, let alone the relationship between different mechanical components. Since car gearboxes are the fundamental parts for its working process, it is a wise decision for car owners to learn something about gearboxes.

In cars, the gearbox will generally be connected to the crankshaft of the engine. And the output of the transmission is transmitted via driveshaft to one or more differentials, which in turn drive the wheels. The gearbox converts engine speed into torque which will push the car forward. It is the main job of the gearbox. There is some difference between manual cars and automatic cars. For example, in a manual car, when the driver depresses the clutch, the gear will be disengaged from its original position so that it can slide up and down the gearbox, while automatic gearboxes are the opposite.

As the main task of the gearbox is to convert engine speed to torque so as to push the car forward, it is indispensable for your car. Your car will not be going anywhere if it lacks the gearbox. As a result, you should pay more attention to the gearboxes. Since we are talking about gearboxes, it is necessary to mention the gear ratios. Commonly, a gearbox will have multiple gear ratios, with the ability to switch between them as speed varies. And this switch may be done manually or automatically.

There is no doubt that gearboxes can be used in many other places except in cars. But no matter where they are used, these transmissions share an important feature, i.e. the gear ratio cannot be changed during the usage. It is because the gear ratio is fixed at the time the transmission is set.

All in all, there is more knowledge about gearboxes and their functions. It is advisable that you should have some basic knowledge of gearboxes. Maybe it will be helpful in your future life.

Source by Lou Lingling

CFPB’s Title Lending Rule Has Limited Scope in Auto

Via Flickr

The Consumer Financial Protection Bureau released its final rule on payday and title lending on Thursday and largely limited the rule’s scope to short-term loans of 45 days or less.

The final rule requires financial institutions offering these short-term, single-payment loans to determine whether the consumer has the ability to repay the loan and places a cap on the number of loans lenders can make to a borrower.

Under the earlier proposed language of the rule, medium- to long-term vehicle title loan lenders — such as Westlake Financial Services’ subsidiary Wilshire Consumer Credit — would have been regulated by these restrictions. However, the final rule’s 45-days-or-less limit excludes Wilshire, which offers loan terms as low as 18 to 24 months, the company’s compliance department confirmed to Auto Finance News.

“The final rule does not apply ability-to-repay protections to all of the longer-term loans that would have been covered under the proposal,” the CFPB wrote in its condensed fact sheet. “The CFPB is conducting further study to consider how the market for longer-term loans is evolving and the best ways to address concerns about existing and potential practices.”

Especially when it comes to short-term loans, the bureau found there is an incentive to sign up consumers who can’t repay, thus trapping them in a cycle of debt repayment. Because it is actually more profitable for the lender when a consumer is unable to pay, many financial institutions in the space ran no checks on the consumer’s ability to repay.  

“The example of the consumer who takes out one payday loan for an emergency and then pays it right back is a misleading exception to the norm,” Richard Cordray, director of the CFPB, wote in prepared remarks. “Most of these loans go instead to people who are re-borrowing the same loan many times.”

In the case of vehicle title loans, that means a consumer’s car is repossessed. The CFPB found that one out of every five single-payment auto title loan sequences ended up in repossession for failure to repay.

Under the new rule, “Lenders are required to determine that the borrower has sufficient income to pay the loan and to meet major financial obligations and basic living expenses during the term of the loan and for 30 days after paying off the loan,” the bureau wrote.

The rule goes into effect 21 months after its registration in the Federal Register, and it will likely face opposition from a Republican-led congress and lawsuits from the small-dollar lending community. The American Financial Services Association (AFSA) approved of the rule’s more limited scope.

“AFSA is pleased to see that the bureau has made the important distinction between beneficial traditional installment lending, and payday and title lending,” the association wrote online. “The extent to which AFSA members are affected by the rule’s requirements regards payment withdrawal practices, related disclosures, and record-keeping.”

For more content like this, check out the 17th annual Auto Finance Summit, which will take place on Oct. 25-27 at the Wynn Las Vegas. To learn more about this year’s event — or to register — visit the Summit’s homepage here.

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Equifax Accused of Profiting Off Increased Auto Fraud

Former Equifax chief executive Richard Smith testifying before Congress.

Former Equifax Chief Executive Richard Smith testified before the Senate Committee on Banking, Housing, and Urban Affairs on Wednesday amid accusations that the credit bureau is profiting off the breach, which is bound to increase auto fraud.

Auto loan fraud has hit record highs in recent years and Equifax has viewed that as an opportunity to grow its company, Senator Elizabeth Warren (D-MA) said during the committee. Warren noted that on a previous earnings call, Smith had said: “Fraud is a huge opportunity for us, it is a huge growing business for us,” Warren noted.

Now that 143 million Social Security numbers have been exposed the industry can expect even more fraud, AFN previously reported. Equifax sells consumers and businesses fraud protection services that the company could eventually profit off of.

Since the hack, more than 7.5 million people have signed up for a free year of Equifax’s fraud protection service, but those consumers will be charged for the service once the trial expires. Furthermore, Equifax has a revenue-sharing partnership with LifeLock’s theft protection service, which has seen an increase in business since the hack.

Moving forward, many cybersecurity experts believe a new standard will have to replace Social Security numbers, Smith said during the hearing.

“I worry [because] Social Security numbers have been out there since 1936, used to be on drivers licenses, and are used in employment,” he said. “You talk with cybersecurity experts and they say the vast majority of all SSNs have been compromised. … I would encourage a dialogue on what is a better way to identify individuals beyond SSNs.”

While Smith wasn’t able to provide any alternatives, Frank McKenna, chief fraud strategist at PointPredictive, told AFN the industry may look toward digital identity solutions that various startups are developing now.  

Even Republican congressmen went after the credit bureau for providing a service in which consumers are not compensated for information they have no control over. “I don’t pay extra in a restaurant to keep the waiter from spitting in my food,” John Kennedy (R-LA) said.

For more content like this, check out the 17th annual Auto Finance Summit, which will take place on Oct. 25-27 at the Wynn Las Vegas. To learn more about this year’s event — or to register — visit the Summit’s homepage here.

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Make Money By Selling Your Junk Car

Do you have a car that is just sitting on your lawn, or in your driveway, and doesn’t get used? Perhaps you have a wrecked vehicle or an old car that doesn’t run anymore, and you don’t have the cash to fix it. It probably isn’t even worth fixing it. Did you know that you could just call number, and then magically a tow truck will come pick it up, and pay you cash? I’m not kidding! Sounds too good to be true, but it is very true. There are actually companies in your local area, that will literally pay you green paper for you to let them tow your junk away.

You can get rid of that ugly hunk of metal and replace it with cold, hard, cash! The neighbors will be happy, you will be happy, the environment will be happy, and the tow company will be happy. It’s a win, win, win, win! All you have to do is hop on the internet, and Google search to find a local company to come remove your junk car.

Your probably wondering what hoops you will need to jump through in order for someone to come do this service for you. Well it is actually extremely easy. There are only a couple things that you need to do to get this service.

#1. You need to have a junk car, or a car that you no longer want to own.

#2. You need to have the title of the car.

#3 You need to actually pick up the phone and call to give them your address. You can also visit their website and fill out a form if you don’t want to call. Most of the companies give you online quotes now.

It is really that easy. Right now today you could be a few hours away from having extra money in your pocket.

So clear off your lawn or driveway. It’s time to free up some room, and get rid of that eye soar that you have been holding onto for so long. Plus it’s so easy, why wouldn’t you do it? It will take the tow truck about 5 minutes tops to hook it up, pay you cash, and be outta your sight. So enjoy your new junk free life and fatter wallet. It really is almost too easy to get rid of your junk car now a days. So give it a shot because you have nothing to lose…except for that junk that is collecting dust and rust.

Source by Joel T Hahn