PHOENIX -

Compliance is an interesting phenomenon in the industry today. I call it a phenomenon because that word means wonder, marvel or spectacle, and that’s exactly how I see compliance.

Compliance is this sort of unknown quantity, and everyone involved interprets it in a different way. One lender’s compliance is another lender’s non-compliance. Some vendors treat it with great respect, and others treat it like a scene from an old TV police drama with an attitude of, “Move along folks! Nothing to see here!” The number of interpretations of compliance is as numerous as the companies claiming to have all of the compliance answers. 

We can all agree that compliance, in part, means having the proper insurance, licensing, contracts, etc. It also might include background checks on every employee and onsite professional lot inspections. 

Oh no! Did I say professional lot inspection? I really meant to say that we will hire someone from Craigslist and send them by to take a look at your lot. 

Sadly, many compliance companies are building what is just another costly expense to the repossession vendor and calling it a “need” within our industry. These companies are taxing the vendor community with high rates for services that may or may not help them meet their lender’s compliance requirements.

In reality, all they are is another revenue model supported on the backs of a financially stretched vendor community. They offer no meaningful opportunities for a vendor to improve their operations, reduce cost, increase revenue and ultimately eliminate risk.

Have you ever watched one of those nature programs where they show the Gooney bird coming in for a landing? They come crashing to the ground and roll two or three times before stumbling to their feet. That’s a perfect word picture to describe how “compliance” has come crashing onto the vendor community.

As a result, compliance companies are popping up from everywhere, each proclaiming to have “the solution” for everything compliance related. 

The way these companies view the vendor community reminds me of another bird — the Dodo bird. You might have seen a painting or statue of one of these in a museum, but none of us have ever actually seen one. That is because they are extinct. The last known account of a Dodo bird was way back in the 19th century. They were a fairly large, flightless bird that lived on isolated islands in the Indian Ocean. This isolation made them fearless of humans, and since they were slow moving, and flightless, they were easy prey for sailors. 

Those selling a “bill of goods” on compliance think the vendor community is a flock of Dodo birds that will fearlessly trust their company’s data and reputation are secure in their hands. They spend a lot of time convincing the lender community that vendors are not capable of representing themselves professionally, and that they, as a third party, are far more capable and worthy of trust than the vendor community. I for one believe that no one will represent you better than you.

Don’t get me wrong, there are companies in the compliance space that certainly offer a valuable, affordable service to both the lender and vendor. These companies have been providing valuable services to the industry for years and have been a part of the vendor community’s push for greater transparency and professionalism.

I leave it to the reader to determine the difference between a valuable compliance partner and one who has simply created a revenue model on the backs of a vendor community that cannot afford one more fee.

My intention is not to sound the alarm or even to sling mud. My intention is to make a call for action to those who currently provide technologies to the vendor community.

As repossession industry technology providers, we have a responsibility to the vendor community to provide low cost, integrated technology solutions that will enhance a vendor’s operational performance, reduce the cost of implementing compliance solutions, and place the vendor in control. 

Compliance should not and cannot be a revenue opportunity supported on the backs of the vendor community. So, if compliance is not a revenue model, how can it be delivered to the vendor community effectively, and at a low cost? 

No one is going to argue that compliance is not important. In fact, it is probably the single most important issue facing both the lender and vendor communities today. Compliance requirements are here to stay, and if any lenders or vendors are not taking it seriously today, they will tomorrow.

This industry already has several technology providers that bring great value to both the lender and the vendor by providing integrated technology solutions that allow for almost instant data transmission from lender to vendor and vice versa. 

Many of these technology companies are competing for the same customer but have found it vitally important to work together and integrate in a manner that reduces the need for vendors and lenders to access multiple systems. The level of cooperation in the industry today has never been higher, and will continue to improve over the next several months. 

Because of this, a vendor is able to utilize one repossession management platform while automatically receiving an assignment from another, while simultaneously dispatching the assignment to a field agent’s smart phone. This same assignment’s update data is captured and instantly pushed to the lender’s system of record. 

Just two short years ago the process I just described would have been impossible. Today, with the level of cooperation brought by the major technology players in the industry, this is becoming the norm and not the exception. Vendors and lenders both are demanding this level of connectivity and control. Lenders want immediate access to assignment and service provider data, and vendors want an increased level of control in managing and monitoring their organizations.

Why settle for less when it comes to compliance?

Today, assignment data can be seamlessly shared between assignment management systems, license plate recognition providers, skip-data providers, and the lender’s system of record, just to name a few. 

Are we 100 percent there? No, but we are much closer to 100 percent integration than at any other point in the past. Technology providers have made integration a priority and we will continue to push this initiative until we have reached the industry’s expectations.   

So what does compliance technology look like when it’s not a revenue opportunity?

Compliance is an opportunity for the industry’s technologists to provide low cost, highly effective, integrated solutions to the vendor and lender communities. Solutions that give the lender community the service provider data access they need, while keeping the cost to the vendor community as low as possible. 

In fact, the cost of compliance technology should be a wash to the vendor by balancing a minimal expense with highly scalable, efficient technologies that will reduce the vendor’s cost of compliance and increase their productivity. 

This can only be accomplished by providing integrated solutions that work with the lender’s and vendor’s current assignment management platforms. By integrating contract management, complaint tracking and recurring training across multiple assignment management platforms, the industry’s technology partners will provide a feature rich, scalable, and low cost solution that will exceed the lender’s needs and the vendor’s expectations for compliance monitoring.   

The integration of assignment management and compliance tracking already exists in MBSi’s Compliance Made Easy suite of solutions and we are committed to working with our integrated partners to ensure cross-platform capability.
Compliance Made Easy brings the lender and vendor communities everything outlined above and more. This integrated solution brings low cost, highly effective, and scalable compliance solutions to the vendor community. 

A good compliance solution is one that integrates with the vendor’s system of record and does not require access to yet another website. It also places the vendor in charge of their data instead of a third party who refuses to take responsibility for the safety and security of the data provided.

We are committed to providing the vendor community with the necessary solutions to meet lender’s compliance requirements and to work with our technology peers in providing cross-platform integrated compliance solutions at a very low cost.

Editor's Note: John Rhodes is the president and chief executive officer of MBSi Capital Corp. Rhodes will be one of the speakers at the upcoming Re3 Conference on Nov. 13 in San Diego. More details can be found at www.usedcarweek.biz.

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