“One of my initial concerns,” says Lori Stephanson, Compliance & HR Director at Newport Acceptance, “was to ensure that our department managers here had the necessary tools at their disposal to monitor and review compliance training for each employee on their team. The way Compli is designed makes that easy. I can work with each manager to visually review each employee’s progress, and training and testing for complete compliance, so no one falls through the cracks.”
Listen in on the interview with Lori we recorded for our Smart Compliance Podcast.
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We’ve got a transcript of the conversation below:
Today we’re talking compliance with Lori Stephanson, of Newport Acceptance. First of all, tell me a little bit about Newport Acceptance and your area of specialty exactly.
Lori: Newport Acceptance is an automobile finance company specializing in servicing auto loans since 1991. We work with car dealer partners throughout California, to provide them with the resources necessary to assist their customers in financing a car. We then provide excellent service to these customers to help them pay off their accounts, because obtaining a car loan is one of the best ways to improve your credit rating. We specialize in alternative financing or special financing in the financial services industry. You can say we evaluate risk. That’s true, but in truth, we evaluate each customer’s ability to pay over the term of the contract, so the valued car they bought keeps delivering them to wherever they need to go for years to come.
Structurally, we have two sides of our company. We have our underwriting team and our customer service team. Each team is composed of well-trained, courteous and talented, bilingual professionals, who spend many hours daily working and talking with people in a variety of both unique and routine situations. Then we work with dealers to thoroughly evaluate each application, taking the time necessary, including even talking with the customer to understand the buying situation. We are a hands-on people-helping-people business. We hope to play an important role in helping our customers build and rebuild their credit.
As such, when you’re talking to all those customers, we hear a lot about the regulatory environment. But unless you’re actually in the middle doing what you’re doing, you don’t always understand that. How does the regulatory environment affect your industry and your company in particular?
Lori: That’s a really good question. There’s been a rise in rules surrounding the consumer finance industry in the dozen years I’ve been involved here. The pendulum of regulations in our industry carries the momentum of the Consumer Financial Protection Bureau. This is an agency responsible for customer protection in the financial sector, which resulted from the 2007, 2008 financial crisis. Chiefly, in the area of fair lending compliance, many companies like ours are aware of both avoiding unwanted litigation and needless additional risk. Fundamentally, because obvious risk already resides in our business, we’re not exactly keen to exposing ourselves unnecessarily. We do operate with a goal to expose and eliminate risk. Too much regulation could hamper our efforts to operate effectively, which could cause our industry perhaps to shut down if we decide the risks are too great to bear.
The bottom line is there’s a balance to overregulation and to maintaining specialty finance partners, particularly for those credit deserving consumers. Obviously, I’m very concerned about compliance and following the rules pertaining to our industry. We’ve always spent a lot of time training and in continually educating our staff with particular due diligence to our own standards and procedures. Each of our employees is extremely aware of conducting themselves within the law and our standards of etiquette, as their job literally depends on it. I’m pleased to say that our employees are frequently recognized by our customers and dealers for their respect and courtesy. We’ve earned a reputation for superior service, which is nice.
Wow. I was going to say, good service, but also you have to keep up on all those regulations particularly as they change. How do you have your employees make sure that they’re staying up on that? I’m assuming that’s how you first found Compli maybe.
Lori: Yes. In good conscience, ever since our business began, we’ve always maintained high standards in our daily operation. I’d say the transition to the rise in industry regulations is something that we incorporated swiftly and seamlessly. Not only is it something we continually monitor, but we require our vendors and business partners to employ the necessary measures. We monitor them to make sure that they incorporate compliance on their end and working with us.
How did you go about choosing Compli, or how did you bring them in when you were going from before you had them till after?
Lori: Let’s backtrack. Honestly, we’ve always been mindful of using a CSM, which is an acronym for a Compliance Software Management solution. But the horror stories of the costly penalties that came from the financial crisis were something we definitely wanted to avoid. Using Compli just makes sense in the outsourcing scheme of things. Compli was actually recommended to us by our banking partner. Through our fact finding process, we found they earned high praise from their customers, companies like ours. Plus we found that they made the process really easy to implement and use, from the configuration of solution sets, to building with our unique business initiatives, like ethics training and code of conduct, and we went live within 90 days. It was easy.
That’s pretty quick.
What about consumer complaints, how do those impact your business?
Lori: That’s a good question. We take feedback from our customers very seriously. In fact, we solicit it on our website, and we respond daily to customer credit inquiries. All the ads you see on TV about 1-800 credit this and that, means that it’s getting into the hands of the consumers who should be curious to know if people are reporting correctly. Our reporting must be 100% accurate for each and every customer, as long as we report their account history. For any complaint that comes to us, our senior management responds and communicates with the customer, fact finding and investigating each situation. The few customer complaints we have are each taken very seriously. Our goal is to resolve each complaint with a more satisfied customer. We consider customer feedback to be valid and worthy of our time and attention. We’re never surprised in the many situations where our customers recognize the friendliness and attention to detail they received in talking with our staff. We do get fan mail, and our employees love it!
Lori: Fan mail. People who say thank you, who send just recognition. It’s something our employees love to get. That’s their goal in every conversation they have with a customer, to leave the customer with a feeling that we’ve done something helpful to them.
You mentioned that you got up to speed with Compli pretty quickly. Tell me about your experience working with Compli, to get up and running, and since you’ve been using the products.
Lori: My Compli team for the implementation was great. I had an implementation manager who was very hands-on, and a very good communicator. He made the process easy. We were able to roll that out to our staff within 90 days, as I told you. The nice part is we had everyone measured for compliance within weeks thereafter for our auditors. It really did happen very quickly, which was nice. The way Compli is designed, each employee has a login and a unique training schedule. From there on, it’s a plug and play approach, meaning the training is designed almost like visiting a library.
Each policy is readily available, and it’s updated by a team of legal experts at Hudson Cook, and then Compli incorporates revisions necessary to keep our compliance materials up to date. Which is nice, we don’t have to think about that. The materials that we get are all totally complete, because things change quickly. One of my initial concerns was to ensure that our department managers here had the necessary tools at their disposal to monitor and review compliance training for each employee on their team. The way Compli is designed makes that easy. I can work with each manager to visually review each employee’s progress, and training and testing for complete compliance, so no one falls through the cracks.
Which I would imagine is one of those things that might keep you up at night, in terms of dealing with keeping everybody in compliance.
Lori: That’s funny. I can tell you that I don’t think you can ever rest assured that you can eliminate all areas of risk. The fact that our management team has always been mindful of strict compliance and our partnership with Compli, makes this pursuit possible, really. It’s a partnership. We appreciate the solutions they put together to help us ensure that we do the right thing for the many people we serve. It’s just like that kind of an equation.
Excellent Laurie. Thank you so much for making time to talk with us today. I really appreciate it.
Lori: You’re welcome. Thanks for asking.