Compliance best practices = more lenders

I hear it all the time. “We don’t need to worry about compliance and those Consumer Finance Protection Bureau (CFPB) regulations. They’re focused on the automotive industry — not us.”

Powersports dealers may think they are insulated from these regulations – and to some degree they’re correct. But let’s look at the issue in a different light. Let’s think about compliance as a business opportunity rather than a business hindrance. Let’s think about compliance as a way to generate more business – both from lenders and consumers.

2016 has brought a flurry of activity from traditional automotive lenders looking into entering the powersports business. New lenders entering the market have found consumers eager to spend a little discretionary income on a delayed motorcycle purchase. Across the board, sales volume has been up in the first half of 2016 for both new and used bikes.

Lenders who were already servicing the powersports industry have seen their book expand significantly – both in terms of originations and total value. And powersports dealers have supported that growth by attaching valuable F&I products to these deals, boosting lender confidence.

But let’s not forget that the majority of lenders looking to expand in the powersports space also service the automotive space. Even if the powersports dealers are not factoring in compliance as a top priority – their lending partners are dealing with it on a daily basis. If we want more auto lenders to branch into the space, then we need to begin demonstrating compliance within the dealership. Having a compliance process will impress your lending partners and up your “good partner’ quotient.

As a powersports dealer, you can adopt a compliance mindset and gain more lender partners with a few, easy to implement steps:

Organize your deal documentation for a potential audit

Is your paperwork in order? Is every component of each deal contained in the correct file? Maintaining some good “housekeeping” practices shows that you are organized and thorough with each sale. Rather than cramming for an audit, conclude every day as if an audit were to occur tomorrow.

Put your procedures in writing

This step can pay-off in spades – not only within the F&I office – but in terms of training across the entire dealership. Putting your procedures in writing ensures that each deal is processed in the same fashion. And sharing these procedures with sales and service provides valuable training for new and existing employees.

Provide compliance-specific training

Foster an environment of continuous education by providing compliance specific training throughout the dealership. Whether delivered in person or online, encourage your team mates to learn the ins and outs of compliance.

Designate a leader

Put into place a complaint management system that is “owned” by one person within the dealership. Empower that individual to audit and enforce the dealership procedures.

Talk the talk

As a dealer owner – or leader within the dealership – set the example by being the model for your team members to take compliance seriously. Be positive about compliance and how it can benefit your company.

And walk the walk

Take 5 minutes a day to walk through your dealership. Does it appear organized and well-run? Now, put yourself in a potential lender’s shoes and take that walk again. Does your dealership convey “partnership material”?

While we’ve talked a lot about how compliance can bring more lender business, compliance can also be a benefit with consumers. Position your dealership as a fair, organized compliant-focused business that treats all of its customers equally. Include language in the sales process that conveys this message. I bet that compliance will become a positive – not a negative – for your business.

Glenice Wilder is the vice president of Powersports for EFG Companies. A 33-year industry veteran, Glenice is responsible for growing and developing EFG’s action and powersports market channel. She combines her passion for motorcycles and her dedication to serving EFG’s customers to develop solutions that consistently exceed their expectations. Glenice acts as a strategic partner to assess her clients’ areas for improvement and how EFG can fill that role. She provides insight in how to increase productivity by pairing the right products within the right markets for the greatest return on investment.