FORT LAUDERDALE, Fla. — During the Q&A portion of AutoNation's quarterly conference call with investors on Thursday, the chairman and chief executive of the country's largest auto retailer went into great detail about his stance on indirect lending, giving some perspective on how the actions of the industry-shifter that is the Consumer Financial Protection Bureau affects groups like his.

"My position remains the same; indirect lending, as it's called, has tremendous added value for all the constituencies: the customer, most importantly, the lender and we get an appropriate origination fee," Mike Jackson said in response to a question from an analyst about whether the group had seen any changes in pricing from the CFPB.

"We're able to provide a very competitive rate to the customer, often much better than what they could get in the marketplace, and we're able to originate loans for the finance institution at a cost lower than what they could do directly," he continued.

Jackson added: "So, when you have a situation like that, it's very sustainable. I would say that even the regulators acknowledge that there's tremendous added value from dealers from in indirect lending, and that they're due an appropriate compensation for that.

"I would say their focus is on, of course, disparate impact and a broad range.  I think for the big, public companies, which have had caps in place and procedures in place for a decade, it's not much of an issue."

The CEO then touched on what effects companies like his could see from a possible scenario of lenders moving to a flat fee.

"And if  — if — lenders were to transition to some sort of flat fee, I don't think for the big, public companies, it would be much of an issue. However, if you are a retailer where your model is dependent upon a wide range of mark-ups, then you're going to struggle with the transition."

The same questioner then asked about any effects showing up, suggesting that the F&I department's $1,375 gross profit unit retailed in the first quarter appeared "quite strong."

"Yeah, but you have to look at how we do it. We do it with excellent penetration to begin with," Jackson said. "Seventy to 75 percent of the units we sell, we arrange the financing for (that vehicle). That's almost $9 billion worth of loans we originated. For instance, in 2012, our average margin on that is about 120 basis point, which seems to me quite reasonable for all the value we just delivered; and by the way, there is no discussion with the banks and the regulators that (that amount) is an unreasonable compensation for what we generate."

Jackson also emphasized that when looking at the $1,375 figure the questioner cited, only a third of that figure is for finance and about two-thirds is for value-added products the company generates. Those are primarily vehicle service contracts and pre-paid maintenance, president and chief operating officer Mike Maroone would later explain, noting that 65 percent of AutoNation's F&I revenue comes from those products.

"What's interesting to know, of course, is that we only show you the commissions on that. The revenue does not go through on our books, so it shows as a 100-percent margin, but that's because we don't recognize the revenue, because we're acting as an agent to originate those products," Jackson explained, referring to the aforementioned F&I products. "But they're high added-value for the consumer. We have very narrow, reasonable margins on it, so when you have high added-value for the consumer and reasonable margins, it's sustainable."

Adding more about the value-added products, Maroone noted, "Our compensation plans are heavily skewed to promote those products and we're very confident that we can sustain this level of performance or even get better."

Wrapping up the commentary on the issue, Jackson said that "there can be, in principle, a debate about disparate impact, whether it's applied to housing, autos or other things, and whether that is an appropriate regulatory step or not; I think someone other than us will discuss that.

"Certainly, for large companies and large financial institutions that have had caps in place for decades, the differences are so narrow and so tight that I really don't see an issue there. And if there is transition to a different compensation system, I think it'll be manageable for us."

Joe Overby can be reached at joverby@subprimenews.com. Continue the conversation with SubPrime Auto Finance News on LinkedIn and Twitter.