Subprime Auto Lending Specialist CENTRIX Contracts With Dollar Associates

CENTENNIAL, Colo. – On the same day that NCUA came out with a strongly worded Risk Alert urging credit unions to closely monitor their relationships with third-party subprime auto lending partners, one of those such companies, CENTRIX Financial, announced it has contracted with Dollar Associates LLC. Dollar Associates of course is the consulting firm for former NCUA Chairman Dennis Dollar. His firm has a number of high-profile clients including the Association of Corporate CUs, Strunk & Associates and others. CENTRIX already has one former NCUA Board member working full-time on staff in EVP of Legislative and Regulatory Affairs Geoff Bacino. Dollar will consult with the company in the arena of regulatory issues, compliance review and governmental relations for its legislative and regulatory affairs division. The NCUA Risk Alert is a perfect example of what CENTRIX hopes Dollar can assist the company with. “We are partnering with Dollar Associates to ensure that CENTRIX continues to have a top-notch team – including individuals who have held top positions with the NCUA – that can ensure credit unions’ portfolio needs are met while keeping our programs aligned with the industry’s overall charter and governing bodies,” said Robert E. Sutton, chairman and CEO of CENTRIX Financial. Dollar told Credit Union Times that NCUA’s Risk Alert was prudent action. Dollar said add subprime lending, with its own inherent risk, and third-party indirect lending together, and NCUA is wise to ensure credit unions are monitoring these programs closely. “I do think it is natural for the regulator to add additional levels of documentation on any program in which the credit union delegates some of its control to a third party, and that’s what you have with indirect lending. I don’t think NCUA intends to shut down indirect lending. There are far too many credit unions involved for them to be able to do so safely and soundly. It is a way to extend credit union membership and credit union services to more people, particularly people of modest means,” said Dollar. He noted while he was at NCUA a number of CUs were liquidated and conserved because of indirect lending. “Ironically these problems came at credit unions that were not using a third-party vendor, but making their own independent arrangements with dealers.” On the general question of NCUA getting more oversight authority over vendors, Dollar said NCUA can already get the vendor information it needs from the CUs it regulates and maybe more importantly, how would the agency decide what vendors to regulate? “Are we talking just about indirect lending vendors, or data processors, or ATM processors, how about the local printer down the street? If you bring vendor authority to bear, you will see an increase in the size of the agency, not a decrease in the agency. They would need specialists in every area.” [email protected]