FORT WORTH, Texas — At the recent Below-Prime Credit Auto Financing Conference, Dan Berce, president and chief executive officer of AmeriCredit, described how his company survived what many have called another "Great Depression."

AmeriCredit's management team started to see the capital markets collapse in the fall of 2007.

The keynote speaker at the National Auto Finance Association Conference said the company was still able to get a securitization done, as well as two more, but saw the market shrinking. He described the company's business model revamp as a "surgical pullback."

Basically, in December 2007, the credit crisis really started to hit the asset-back securities guarantors and insurers. The majority of the AmeriCredit deals got downgraded.

This left the company in a tough situation in 2008 when it had several billion dollars of loans on the book and "no possible exit through the securitization market," Berce told attendees.

"We had to act quickly. We had been forced to downsize in 2003, so we had a model to follow," he explained.

The company closed its Canadian side, near prime, prime and direct auto loan businesses.

"In 2008, the financial system as a whole was in disarray," Berce described.

When the company hit about $3.5 billion financed through its credit lines, the escalating pace of defaults pointed to problems ahead. At this point, the option to use bond insurance was now gone, he pointed out.

"So we hit the road again for investors (who were seeking at least a 25-percent return) and ultimately, we were able to reach deals that were crucial to our survival," he stressed.

The company had to seek a special waiver from the New York Stock Exchange because an affiliated company was involved, he mentioned.

"If we did not get these done, we had to say (to the NYSE) that we would be going out of business," Berce stressed.

AmeriCredit then began witnessing some problems with financials and covenants and banks had financial issues of their own, according to the CEO.

"However, we were able to revise the covenants, which gave us the breathing room we needed," Berce said. "We pulled originations back so we had bought the time to wait until (the capital market) conditions improved in 2010."

TALF helped a lot, he noted. The $200 billion was initially used by captives and only triple A rated securitizations. But this worked tremendously in opening back up the market to AmeriCredit, he stressed.

Now AmeriCredit is setting out to rebuild its business and incrementally driving back up originations and Berce noted that bank lines were renewed this year as well.

So what is one of the key points Berce said his company learned from the latest recession?

"Maintaining adequate cash or liquidity is a must. It takes a tremendous amount of this to grow a non-prime auto lender. We needed to absorb the ups and downs of the market," he explained.

Offering advice to other lenders, Berce said bankers do not like to be surprised, so the fact that his company kept in constant contact helped through the downturn.

"AmeriCredit has now been able to re-engage dealers. We've been able to hire back many employees. The key was being candid with them about the situation," he indicated. "Our organization has to be nimble."

Another important factor was that while the company cut many of its business lines to weather the downturn, it did not let the collections area suffer.

"We stayed very close to collection activities and stepped up investment during the downturn, but looked to cut everywhere else," Berce remarked. "With our company, job losses were a big driver and having competent experienced people in the collections team was necessary. The success of subprime companies is always dependent on the people."

He now says this is the optimal time to make non-prime auto loans; however, his team is keeping an eye out for regulatory oversight, saying the market may not realize the true impact of oversight and the new consumer financial protection bureau for several years.

"On balance, I feel much better standing here today than I would have a year ago," Berce said.

Talking about the conference as a whole, Jack Tracey, the NAF Association executive director, said, "The tone we tried to set for the conference was one of confidence in the future. The economy is on the upswing, and we brought in experts who could give good, solid advice to those in attendance."

Marguerite Watanabe, immediate past president, said, "Change is in the air. It is finally time to be enthusiastic, and this year's conference is place where our industry got ‘a first look' at new opportunities."

Ultimately, attendees and speakers displayed a belief that the economy is recovering, used-car values are at all-time highs, auto loan defaults are declining and the never-ending focus on collections remains important.

James Bass, founder, CEO and chairman of Auto One Acceptance Corp., was also presented the Industry Excellence Award by the association.

The award recognizes Bass's contributions and commitment to the below-prime auto financing industry. He is a founding member, current treasurer and chairman emeritus of the NAF Association.

"Jim recognized the need for this association 15 years ago, and this was a driving force behind forming the organization. His foresight and leadership over the years has been invaluable," said Tracey.

Tom Hudson, of Hudson Cook, and general counsel for the association, presented the award to Bass during a special dinner.

"There is no better representative of the industry than Jim Bass," Hudson remarked.

DealerTrack was the grand corporate sponsor for the conference, and PassTime, Open Dealer Exchange and Balboa Insurance Group were corporate sponsors. The golf event was sponsored by van Wagenen Financial Services, Fiserv and TransUnion.