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    FACT SHEET FACT SHEET Document Transcript

    • Consumer Access and Choice to Credit FACT SHEET The American Financial Services Association (AFSA), based in Washington, D.C., is the national trade association for the consumer credit and finance industry. Founded in 1916, AFSA has a broad membership, ranging from large national financial services firms to single office, independently owned consumer finance companies. AFSA represents financial services companies that hold a leadership position in their markets and conform to the highest standards of customer service and ethical business practices. Although it is diverse, AFSA’s membership is united by its main goal of serving the credit needs of consumers and businesses. Mission Statement AFSA’s mission is to advocate the need for consumer access and choice to credit and to protect and improve the consumer credit business, maintain a positive public image, and create a legislative climate in which reasonable credit regulation can and will be enacted. The Association operates in the public interest, encourages and maintains ethical business practices, and supports financial education for consumers of all ages. AFSA MEMBERS – PRODUCTS AND SERVICES Current membership is nearly 350 Active (consumer credit and commercial finance companies with over 10,000 branch offices nationwide), Associate (industry suppliers), Affiliate (state associations) and Foreign financial services companies. Members include: Diversified Financial Services Companies – Companies that offer a broad range of financial products and services to middle-income consumers through offices nationwide. Credit products include: personal loans, first and second mortgages, home equity lines of credit, credit cards and private label cards, sales financing and credit insurance. Many of these companies also offer consumer deposit products through banks or savings and loans owned or affiliated with them. Examples of AFSA members that are diversified financial services companies include: American General Finance, Inc., CIT, CitiFinancial, Inc., GE Money - Americas, HSBC North America and Wells Fargo Financial, Inc. Captive Finance Companies – These companies, often owned by a manufacturer of hard durable goods, provide financing for customers who purchase their products. In addition to offering financing and leasing options on products manufactured by the parent, the companies or their parents have formed or acquired other financial entities that include: credit card affiliates, mortgage companies, savings and loans, and consumer finance affiliates. Finance subsidiaries of manufacturers include: American Honda Finance Corporation, DaimlerChrysler Financial Services Americas LLC, GMAC Financial Services, Ford Motor Credit Company, Harley- Davidson Financial Services, Inc., Mercedes-Benz Credit, Nissan Motor Acceptance Corporation, Toyota Motor Credit Corporation, and World Omni Financial Corporation. PAGE 1 12/21/2006
    • Automotive Finance Companies – In addition to the auto captives listed above, this category includes other companies that provide indirect financing to automotive dealers of new and pre- owned vehicle customers. Examples include: AmeriCredit Financial Services, Capital One Auto Finance, Inc., CitiFinancial Auto, Reliable Credit Association, Inc., HSBC Auto Finance; Long Beach Acceptance Corporation, Mission Financial Services, and Wells Fargo Auto Finance, among others. Consumer Finance Companies – Consumer loan companies’ core business includes: unsecured personal loans, home equity loans, student loans, and sales financing (providing credit for retailers’ customers). This group includes multi-billion dollar companies with nationwide offices, regional companies, and independently owned firms that have one branch office or branches in several states. Consumer finance companies include: American General Finance Corporation, CitiFinancial, HSBC North America, Wells Fargo Financial, Inc. and independently owned firms such as 1st Franklin Corporation, Brundage Management/Sun Loan Company, Finance & Thrift, First Tower Corp, Heights Finance Corporation, Omni Financial Corporation, Personal Finance Company, Pioneer Credit Company, Reliable Credit Association, Security Finance Corporation of Spartanburg, Textron Business Services, Tidewater Finance Company, Inc., United Finance Co., and World Acceptance Corporation. Many independently-owned companies specialize in one type of lending such as specialty auto financing. Mortgage Lenders – Companies that provide home equity loans/second mortgages, manufactured housing loans and other loans secured by a borrower’s residence. Companies in this category include: ACC Capital Holdings, Budget Finance Company, Countrywide Home Loans, CitiFinancial, EquiFirst Corporation, First Tennessee/First Horizon, GMAC Mortgage, HSBC Consumer Lending; Irwin Home Equity, New Century Mortgage, Option One Mortgage Corporation, Popular Financial Holdings, Inc., and Residential Capital Corporation. Commercial Finance Companies – Companies that offer commercial finance and leasing services include: Boeing Capital Corporation, Caterpillar Financial Services Corporation, iStar Financial Inc., International Lease Finance Corporation, John Deere Credit Corporation, Nelnet, Inc., SMR Corporation (Sallie Mae) and Textron Financial Corporation. Card Companies – Companies that offer bank cards, charge cards, credit cards, or private label credit cards. Several AFSA member companies are among the largest credit card issuers and processors in the United States including: Citi, Wells Fargo, GE Money - Americas, Dell Financial Services, GMAC Financial Services, HSBC North America, Morgan Stanley (Discover), Visa and MasterCard. Industrial Banks Companies that are engaged in consumer and commercial lending on both a secured and unsecured basis. They accept time deposits and deposits that may be withdrawn through negotiable orders of withdrawl ("NOW" accounts). Many industrial banks are consumer lenders, engaging in mortgage, auto, credit card and other forms of consumer and small business lending on a nationwide basis including: CIT Bank, CitiFinancial Services, Finance & Thrift, GE Capital, GMAC Automotive Bank, Harley-Davidson Financial Services. PAGE 2 12/21/2006
    • REGULATION OF CONSUMER CREDIT COMPANIES Consumer credit and finance companies lend money to consumers and businesses without relying on insured deposits. They are generally licensed at the state level and are highly regulated at both state and federal levels. Specifically, these companies must comply with federal regulations relating to consumer credit – the Equal Credit Opportunity Act, the Truth in Lending Act, the Truth in Leasing Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, and the Federal Trade Commission’s Credit Practices Rule are among the more important. Compliance with the principles of the Fair Debt Collection Practices Act has been incorporated into AFSA’s Code of Ethics. In many cases, finance companies own or are affiliated with depository institutions, such as savings & loans, consumer banks (limited-purpose banks), or credit card banks. These institutions are fully regulated institutions, subject to all of the laws and regulations applying to banking institutions. They are regularly examined by state and federal banking authorities. MAJOR AFSA ACTIVITIES Federal Government Affairs – Formulates industry positions and actively advocates these positions in legislative, regulatory and judicial settings; lobbies both Congress and the regulatory agencies to achieve industry’s goals; participates in major litigation as amicus curiae; ensures accurate dissemination of information; activates grass roots involvement through Congressional Action Programs; forms inter-industry coalitions and discussion groups on high priority issues. State Government Affairs – The active SGA Committee comprises four subcommittees focused on the specific product lines of our members (auto finance, cards, mortgage lending and personal loans). The SGA Committee meets in person three times a year to work on issues of common interest, share political intelligence, and develop resources for current and emerging issues. The Subcommittees meet regularly by phone for briefings on legislation and regulation, and to prepare and commit resources to important issues. Through these subcommittees, AFSA prepares studies, white papers, talking points, and issue briefings; hires lobbyists, public relations experts, and other experts as needed. Legislative and Regulatory Relationships: AFSA’s State Government Affairs staff actively participates in national legislator and regulator associations, including the National Association of State Legislators (NCSL), the Conference of State Bank Supervisors (CSBS), the American Association of Residential Mortgage Regulators (AARMR) and others to ensure the industry is represented and the benefits of the industry are known. AFSA also holds its State Government Affairs Forum each year in conjunction with the National Association of Consumer Credit Administrators (NACCA’s) Annual Meeting. This is a rare opportunity for companies to interact and mingle with key state regulators. The meeting features the highest caliber speakers on the top issues facing the industry. Premium Legislative and Regulatory Tracking – StateScape®: All AFSA members have access to StateScape’s comprehensive web-based monitoring system—legislative and regulatory tracking in all 50 states every day of the year from anywhere in the world. PAGE 3 12/21/2006
    • Legal Affairs – The AFSA Law Committee has long been one of the most successful and substantive of all of AFSA’s Committees of Professional Interest. The Committee deals with all aspects of the legal environment facing the industry, including legislative issues, regulatory matters, and litigation. The Law Committee is presently divided into the following Subcommittees: Home Mortgage Lending, Credit Card and Personal Loans, Auto Finance and Leasing, and Emerging Issues. Periodically, special task forces are established to focus on issues of long term impact to the industry such as Privacy. Each Committee has a Chairperson, and is assisted by an invited outside counsel with particular expertise in the relevant subject area. These Sub-Committees routinely activate and administer special projects, such as the extensive AFSA litigation involving municipal home equity lending ordinances. Public Affairs – Serves as the industry’s voice to the public and informs media of current industry developments and issues; targets key audiences affecting public policy; develops and executes industry communications initiatives; provides industry leaders as key spokespersons. Committees of Professional Interest – Available for executives who work in a variety of professional positions within the industry to share information and participate in presentations on emerging issues in their professional interest area. Committees include: Accounting, Audit & Compliance, Electronic Commerce, ID Theft Fraud Control (NEW), Financial Relations, Human Resources, Information Systems, Law, Marketing, Operations, Public Communications, State Government Affairs, and Tax. CONFERENCES/SCHOOLS Specialized conferences and smaller seminars that help serve members’ needs by focusing on the latest developments within the financial services industry. For more information, view the meetings section of the AFSA website at www.afsaonline.org Vehicle Finance Conference & Exposition – Held in conjunction with the National Automotive Dealers Association (NADA) Annual Convention and sponsored by the Vehicle Finance Division of AFSA representing both prime and specialty finance companies. (January/February) Marketing Forum – A two-day professional development opportunity for industry executives interested in marketing and business development topics. (March) Independents Conference & Exposition – This four-day conference, sponsored by the AFSA Section on Independent Operations, is the main event for independent finance company owners and suppliers to this segment of the industry. The Outstanding Independent and the Outstanding Employee Awards are presented. (March/April) Finance Industry Investors Conferences in Europe and the U.S. – Brings together investors in the finance industry, leading analysts, and top financial executives from member companies who provide company-specific presentations. (April, May) PAGE 4 12/21/2006
    • State Government Affairs Forum – A two-day meeting to enhance the skills and educate state lobbyists and state association executives on critical state legislative issues and industry trends. The group meets in conjunction with the annual meeting of the National Association for Consumer Credit Administrators (NACCA). (September) Management Development Programs – www.afsaef.org AFSAEF provides three top-notch management development programs for member company executives in the career development of managers at the University of North Carolina and Marquette University. AFSA Executive Development Program, University of North Carolina, Chapel Hill, NC The Professional Development Committee has undertaken an in depth review of the day and one-half biennial Executive Presence Program. Assessment of the original program concluded that an enrichment of the curriculum was warranted and that the investment in travel and tuition should be rewarded with a program extending over two full days. The core of the curriculum will be in Executing Strategy through People. The extra half day will be devoted to a panel of AFSA member senior management executives that will interact with the students in a discussion of real world challenges for industry leaders. (May) AFSA Leadership Development Program, University of North Carolina, Chapel Hill, NC This two-week program provides a leadership development opportunity for individual who have excelled in your organization. This program is designed to broaden the skills of mid-level supervisors, regional and district managers, and vice presidents in technical and support functions. The sessions combine a number of learning situations, including case discussions, simulations and role plays and a day-long outdoor team- building exercise that focuses on leadership, teamwork, problem solving and self discovery. (July) National Institute on Consumer Credit Management (NICCM), Marquette University WI This is a two-year program providing a valuable and enriching experience in layer modules of learning. Year 1 courses provide a sound basic knowledge for financial managers and Year 2 builds on this knowledge with applications and higher level skills. This is designed for high-potential branch managers, team leaders and supervisors who are on the "fast track" in their career development. (June) Annual Meeting & Leadership Conference – The Association’s major convention featuring prominent speakers and panelists on critical industry issues. Distinguished Service Awards (DSA) and Merit Manager Awards are presented. (October) AFSA AFFILIATED ORGANIZATIONS Section on Independent Operations – Formed in 1983 to represent the special needs and interests of owner-operated finance companies, the Independents Section sponsors an annual conference, a quarterly newsletter and other materials directed toward owner-operators. PAGE 5 12/21/2006
    • The AFSA Education Foundation (AFSAEF), a non-profit 501(c)3 organization, mission is to educate high school students on personal finance concepts and to help consumers realize the benefits of responsible money management and understand the credit process. AFSAEF’s educational initiatives position AFSA members as responsible and concerned for their customer’s financial well-being and provide a track record to point to when dealing with members of Congress, the media, and consumer advocates. AFSAEF forms partnerships with AFSA members, government agencies and non-profit organizations to focus on personal finance issues affecting a specific segment of the market place. Recently, the Understanding Vehicle Financing brochure, developed in a joint venture with the National Automobile Dealers Association (NADA) and in cooperation with the Federal Trade Commission (FTC) was updated with the approval of the FTC, NADA and AFSA. This brochure is available in English and Spanish. MoneySKILL® 2007 – the highly popular online free personal finance curriculum for young adults, is one of the most significant initiatives that the AFSA Education Foundation has undertaken in its eleven- year history. The enhancements updated not only the p[program’s underlying technology but also the content. MoneySKILL® has been successfully incorporated into schools in all 50 states with more than 1,000 new teachers registered to use the course in 2006 resulting in more than 9,000 new students taking the course. AFSAEF staff conducted MoneySKILL® teacher-training workshops with state Jump$tart Coalitions and state business education associations in 26 states; plans underway to reach out to remaining states in 2007. AFSA Vehicle Finance Division – Formed in 1996 for association members who finance and lease new and pre-owned vehicles to consumers. Members include captive automobile and motorcycle finance companies, diversified financial services companies, specialty finance auto finance companies and suppliers to the vehicle finance industry. Division members facilitated the development of the Fair Credit Reporting Act (FCRA) working group within AFSA. They were the first to express the need for immediate attention to extend the provisions within the FCRA that expired at the end of 2003. PAGE 6 12/21/2006
    • The Card Division acknowledged the need for a unified effort in order to extend those provisions and invited all AFSA members to take an active role. AFSA and Division members are currently involved in analyzing a number of data security bills to determine what our position should be. AFSA’s Mortgage Lending Division incorporates federal and state government affairs initiatives, legal issues, communications and public relations. The Division plays a critical role in developing AFSA’s formation of the Mortgage Lending Division is in response to the growing number of members in the mortgage industry. The Division works with the mortgage lending subcommittees of the AFSA Law and State Government Affairs Committees to focus on issues of concern to mortgage lenders. MAJOR FEDERAL LEGISLATIVE AND REGULATORY ISSUES Auto Leasing/Finance – AFSA has worked cooperatively with the Federal Reserve Board to revise federal leasing laws, with the goal of providing more useful information for consumers shopping for a lease. Consumer finance and leasing education continues to be one of the main focuses of AFSA. PAGE 7 12/21/2006
    • Bankruptcy Reform and Implementation – AFSA has been a leader in efforts to amend the bankruptcy law by putting personal responsibility back into the bankruptcy code. On October 17, 2005, The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 went into effect. This culminates an eight-year, bipartisan effort by Congress to reform the U.S. Bankruptcy Code. The new law will bring sweeping changes to an overburdened, antiquated system while encouraging personal accountability and responsibility. AFSA is part of an industry coalition to ensure that bankruptcy reform is being implemented according to the spirit and letter of the law as intended by Congress. Data Security – AFSA supports H.R. 3997, the Financial Data Protection Act of 2005, which was passed by the House Financial Services Committee. The bill would establish an effective uniform national standard, complimentary the existing regulatory structure and coexist appropriately with Gramm-Leach-Bliley and the Fair Credit Reporting Act. H.R. 3997 applies to any entity that possess sensitive financial personal information and preempts all state laws with respect to data protection, breach investigation and credit freezes for victims of identity theft. Electronic Payments AFSA has joined with a diverse mix of trade associations and financial services companies to form the Electronic Payments Coalition. The EPC seeks to educate policymakers on the value of payment systems and to increase public awareness of the many benefits provided by these systems to consumers and merchants. Through its involvement with the EPC, AFSA will support and protect competition and efficiency in the payments industry and oppose unnecessary government regulation. Fair Credit Reporting Act – AFSA has been active in the legislative debate over consumers’ access to data in lenders’ files and to information used to compile credit scores. AFSA adopted a voluntary standard on credit bureau reporting under which members have agreed not to withhold borrower information from credit bureaus in an effort to keep competitors from “poaching” good consumers. Financial Privacy – The ability of companies to share customer information among their affiliates and third parties is coming under increased scrutiny due to personal privacy concerns. AFSA is working with Congress and financial regulators to ensure that new privacy protections for consumers will achieve their goals without unduly burdening the free exchange of information which is necessary for maintaining AFSA members’ operational and marketing effectiveness. GSE Reform – The AFSA is working with Members of Congress to ensure that the Government- Sponsored Enterprises (GSEs) are not empowered to move into the nonprime market and the new regulatory is not given any authority over this vital sector. PAGE 8 12/21/2006
    • National Standards on High Cost Mortgage – AFSA continues to work with Members of Congress as they pursue national standards legislation for mortgage lending. The proposed legislation aims to preempt the growing patchwork of state and local predatory lending laws that raise the costs of lending and encumber the national mortgage lending market. In exchange, the mortgage industry will comply with national standards for high cost lending that track a number of the voluntary standards adopted by AFSA member companies. AFSA is emphasizing the need to ensure that any effort does not negatively impact member companies’ ability to provide lending products to their customers. Home Mortgage Disclosure Act (HMDA) – AFSA is leading an industry working group to study the findings of the HMDA data and to provide policy makers with information to help them assess the mortgage industry’s track record of making access to credit available and affordable for more Americans. For More Information To learn more about the benefits of membership in AFSA, please visit its website at http://www.afsaonline.org or call Sheilah Harrison Vice President, Membership Services American Financial Services Association 919 18th Street, NW, Suite 300 Washington, D.C. 20006-5517 Phone: (202) 466-8602 Fax: (202) 223-0321 sharrison@afsamail.org PAGE 9 12/21/2006