One firm’s regulation is another’s windfall.
Such is the case with Pasadena’s Remarketing of America, which specializes in repossession services. Executives there are betting that increased scrutiny on auto lending by a federal bureau will push more financial institutions to contract out for their repo services rather than managing them on their own.
Remarketing manages the repossession and sale of cars, boats and similar assets on behalf of banks, credit unions and other lenders.
The Consumer Financial Protection Bureau has said that financial institutions must ensure that third-party service providers – which would include repo companies – comply with consumer protection laws. That could mean making sure repo companies are licensed, consumers receive proper notification before a vehicle is repossessed and vehicles are stored in a secure location before being auctioned off.
For big banks and credit unions that might contract with dozens of regional repossession agencies, that amounts to a lot of work and a lot of risk, said Emory White, Remarketing’s chief executive.
“The risk of doing business today with auto recovery and remarketing companies without a well-developed compliance program is just too high for financial institutions to accept,” he said.
Remarketing, which works with repossession and auction businesses nationwide, has started doing all of that verification work up front. It can then market itself to lenders, ensuring CFPB compliance, said firm spokesman Gary Moffatt.
Getting all of its vendors in compliance has been a lengthy process. Remarketing started the work about a year ago and expects to finish up this month.
“We get background checks, we take photos of the place, we make sure they have fences and security,” Moffatt said. “To get an approval, there are like 42 things we have to go through. To manage that is very complicated. No financial institution wants to do that. We think that’s an extra benefit for us.”
Moffatt said Remarketing had already attracted prospective clients with its consumer bureau compliance offerings, and an Oklahoma City credit union and a Seattle auto title company are close to signing up.
“They’re looking for anything that will keep them off CFPB’s radar screen,” Moffatt said.
Prepaid debit card issuers, bill payment companies and alternative credit scoring firms will meet in Century City this week for Emerge, a conference for companies in the world of alternative financial services.
Several executives from local companies will be participating in the event, including Pasadena mobile-phone payment company Wipit; Manhattan Beach’s Kinecta Federal Credit Union, which operates Nix check-cashing and payday lending storefronts; and Hollywood venture capital firm Core Innovation Capital.
Core, which invests exclusively in alternative financial services firms, is affiliated with Chicago non-profit Center for Financial Services Innovation, one of the conference’s co-sponsors. Core moved to Hollywood from New York last summer, and that’s in part why the annual conference will be held in Los Angeles this year, said Arjan Schütte, Core’s managing partner.
Formerly called the Underbanked Financial Services Forum, Emerge is a trade event for companies that provide all manner of financial services, often to consumers without bank accounts. The conference will be at the Hyatt Regency Century Plaza on June 4-6.
Emerge immediately follows a related conference, the Digital Banking Summit, also at the Hyatt Regency. That event will feature another local company, Pasadena credit card information firm Wallaby Financial.
David Malone has joined the board of Koreatown bank holding company BBCN Bancorp Inc. Malone was previously a board member and chief executive at Community Bank in Pasadena. … John Allen has joined West L.A. investment advisory Aspiriant as chief investment officer. He was formerly in the San Francisco office of Boston investment manager Grantham Mayo Van Otterloo & Co. … Jonathan Zucker has joined West L.A.’s Intrepid Investment Bankers as senior vice president of the capital markets group. He was formerly with San Francisco investment bank U.S. Capital Partners. … Gheorghe Rotar Jr. has joined downtown L.A. asset manager DoubleLine Capital as a mutual fund operations specialist. He was formerly with Newport Beach bond manager Pimco.
Staff reporter James Rufus Koren can be reached at email@example.com or (323) 549-5225, ext. 225.
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