Road Auto Finance keep their compliance bases covered With Compligo
“It only takes one mistake, one uniformed employee, to create problems as far as the regulations go,” Andy Page, Director of Operations tells us. As an indirect auto lender who caters to the non-prime/sub-prime sectors of the finance industry, there’s a lot of scrutiny on Road Auto Finance to demonstrate they treat their customer fairly.
We sat down with Andy to chat about his take on the finance industry, what keeps him up at night, and how he’s using Compli to stay on the right side of CFPB regulations.
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We’ve got a transcript of the conversation below:
I have the pleasure of speaking with Andy Page, who is with Road Auto Finance. Tell me a little bit about what Road Auto Finance does.
Andy: I’m the Director of Operations here at Road Auto Finance. We’re an indirect auto lending company that caters to the non-prime/sub-prime sectors of the finance industry.
Why is compliance in that particular line of work a challenge?
Andy: Well, compliance has never been optional, but there’s been a lot of companies in the past who have operated that way, so … In light of recent events, the compliance has really stepped up in the last few years. We really have to make sure all of our bases are covered, and make sure we’re always in compliance at all times.
What kind of recent events? What kind of drove you guys to having to really take a look and make sure that your scrutiny is good on this?
Andy: Well, the … You know, the CFPB came out of the Frank-Dodd Act, so that came out of the so-called “Great Recession.” They’ve been really looking really hard at finance, the finance industry in particular, and making sure that everybody’s playing by the rules. There’s always some of the people that are not playing by the rules, either because they don’t want to play by the rules or because they don’t know that they’re not playing by the rules. This is kind of the great awakening, if you will, on the regulatory side, to make sure that everybody is treating the consumers fairly. It’s very important that us, from a financial institution standpoint, to make sure that we are treating all of our customers fairly and equally across the board.
What kind of elements leads to that? Like, when you talk about being fair, in terms of just lending terms, or what kind of pieces of that?
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Andy: Well, it’s really everything. Most of the regulations that exist today are there to make sure that it’s a level playing field for everybody as far as … That’s a consumer, so that’s where everything … That’s the base of everything. We have to make sure that we treat everybody the same whenever we’re extending credit, we have to make sure we’re treating everybody the same whenever we’re collecting any debts, and the way we handle all of our information. All of it really exists to make sure that the consumer is being treated fairly, and there is no undue liability that they will incur.
Tell me about what that means as someone on the business side, though. What elements do you have to worry about when you look at compliance? What things are keeping you awake at night?
Andy: Well, the biggest thing is that it only takes one mistake, uninformed employee, to create problems as far as the regulations go. That’s what makes the testing and everything so important, to make sure that all of our employees here know what the regulations are, know what the rules are, make sure they’re playing in bounds, and make sure that they know where the bounds is so they don’t step out of bounds, as far as any of the regulations go.
And those changes over time, too, don’t they?
Andy: Yeah, they change from time to time.
Okay. What were you doing, before you got involved with Compli, how were you doing this? Were you kind of piecing it together, or did you have someone in charge of it?
Andy: Well, as far as the training goes, it was a little more situational. Couldn’t really know where the problems were until the situations came up.
Give me an example.
Andy: Let’s say that you hire a collector that where they came from, they would share third-party information with anybody, well, you can’t do that, so now, whenever they come on with us, they have to sign policies, they have to read the procedures, they have to take tests to make sure that they know that you’re not allowed to do that. In that situation, you know, that theoretical situation, if they’re used to giving information to third parties, they’re now seeing that that’s against the Privacy Act, and it’s going to generate that question before they ever make their first collection call, so that they know … Or before they ever talk to the first customer, that they know that that’s out of bounds, and they’re not allowed to do that.
So, avoiding the problem before it actually happens.
That’s a good place to be. Tell me, so, as you guys were kind of looking at this, what led you to reaching out to a company like Compli to get some help in organizing it?
Andy: Well, you know, our capital source is Wells Fargo, and they have a vested interest in our compliance, because compliance is really, you know, equals liability. They are how we heard of Compli. Now, we would have eventually probably gone with the … Gone the same route that we’ve gone, but being with Wells Fargo kind of sped everything a long a little faster than it normally would have, because we weren’t really even looking for somebody like Compli until we came on with Wells.
What was it, like did Wells come to you and say, like, “Hey, listen, this might be a good way for you to make sure you guys are doing your thing, and it’ll keep us in the clear as well as you?”
Andy: Wells, if I remember right, gave us a couple of different names, and we looked at a couple of different places, and Compli seemed to me like it had the most resources and the most bang for our buck, and was the best deal, as far as being the testing and the HR side of our compliance program. Your compliance management system has a lot of pieces to that puzzle, and a couple of the biggest pieces are going to be your training, and so on and so forth, and the training being, in my opinion, one of the biggest pieces of that puzzle, and Compli filled that spot nice.
Tell me about that. How did the training work?
Andy: The training was pretty flawless, coming on with, you know, I’ve dealt with a lot of different third-party vendors, as far as software, and they’re usually not very fun to deal with, but Compli was very, very good, and I was honestly shocked about how easy it was. I just answered a few questions, and everybody over at Compli just kind of took it from there.
Making compliance fun, who knew?
Give me a little bit about, kind of, before and after. Before you got set up with Compli, how were you doing things, and how is it different now that you guys are up and running?
Andy: Yeah, as I said, you know, before was pretty much situational. You didn’t know the strengths and weaknesses, as far as the regulatory knowledge of your employees, prior to coming on with Compli, to where afterwards, everything is organized. The training is done, and employees know the regulations before they even speak with their first customer.
Going forward, what kind of things do you have on your mind in terms of compliance, and what are you … Like, what’s kind of keeping you up at night as you look forward and things get moving that way? What kinds of things for compliance are you worried about in the future, and how are you hoping to kind of keep that all organized?
Andy: Well, to be honest with you, I’m working on a complete compliance management system now. The two biggest things that keep me awake at night, as you would say, is complaint management and vendor management, to be able to track and know what’s going on as far as the complaints that we receive and the vendors that we deal with.
In terms of other businesses who might be looking at going with a management system like Compli, what advice would you give from your experience that might help them make a decision on whether to move forward with a vendor to help them get set up?
Andy: Well, as far as the Compli compliance management system, to my knowledge, there really isn’t one. There’s nothing that you can buy off the shelf that’s going to do everything that you need it to do. The only thing that you can really do, that you can really purchase from a third-party vendor, that I’m aware of, is testing to make sure that all of your employees have the knowledge to make sure that they’re not out of bounds when it comes to compliance. Compli does that beautifully, and it also has that HR component that kind of puts everything in a nice little package for everybody. It shows that we’re being proactive, as far as the regulations go, and as far as the training goes.
Now, there’s a lot of other pieces, you know, like I said, the compliance management system is a large puzzle, and no two companies’ puzzles are going to look the same, but every puzzle needs the training section of that compliance management system, and Compli fills that spot beautifully. Also, Compli is hooked up with Hudson and Cook, or Hudson Cook, as far as the policies, the regulations … All the policies, procedures, and testing you have to have, and either you can get them from Compli or you can do them yourself, and I don’t think there’s really anywhere else to go to get what Compli offers, and to do that yourself would be an astronomical undertaking.
Has this made your life easier?
Andy: Absolutely. Otherwise, I would have to do all the training. I would have to print out tests for them to take, and print out the, draw the policies myself, and I don’t have the luxury of having a Hudson Cook attorney in my office to draw up all these policies and procedures, and then I would have to take time out of their day to basically have a class here in the office, and nobody really has time for all that.
I can certainly understand that, so it sounds like it takes the headache away, which is good. How about in terms of employee rollout? Was it tough to kind of get everybody online? Did it kind of go … Did they all kind of catch onto it pretty quickly?
Andy: Absolutely. You would think, coming into it, there’d be a big change for everybody, but as far as my experience with my employees, who are exceptional, they did exactly what was expected. I had them do it in bite-sized chunks, and they got through it in no time. It went much easier, the whole thing went much easier than I ever expected it to.
That’s things you don’t always hear from businesses, so that’s always good to hear.
Andy: Right, absolutely.
And then finally, final question, in terms of, now, as you work with Wells Fargo, how has this helped strengthen that relationship?
Andy: All my employees know what the rules are, they know where the boundaries are, and they know not to step out of bounds, so Wells Fargo feels much more comfortable knowing that my employees know where “out of bounds” is.
Excellent. That’s great.
Andy: Which also limits the “liability” from a regulatory standpoint.
Andy, thank you so much for taking some time to talk with us today about Road Auto Finance’s experience with Compli. It’s been great chatting with you.
Andy: Well, thank you for having me.