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Setting Yourself Up for Disparate Impact or Disparate Treatment Issues?

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Flat-Rate Vehicle Location Data Helps You Prevent CFPB Fines.

The CFPB (Consumer Financial Protection Bureau) is cracking down on Disparate Treatment and Disparate Impact and here’s the rub: you can get into hot water even if the disparate treatment or impact is unintentional. In simplistic terms, the CFPB is saying lenders must treat their customers fairly.

Many of the top lenders rely on vehicle location data also known as license plate recognition (LPR) data for Skip Tracing. But that data comes at a cost, a cost that is often added to the customer’s loan balance. This strategy could prove risky given the CFPB’s take on disparate treatment and disparate impact.

But what if you treated Skip data such as vehicle location data as an operating expense instead of adding it to your customer’s loan balance? And, what if you purchased vehicle location data on a flat-rate, “all you can eat” fee structure? This strategy accomplishes two things: 1) reduces risk of CFPB fines for disparate treatment and 2) maximizes the impact of vehicle location data on your portfolio.

That’s one of the many reasons DRN has opened up all of its vehicle location data solutions for auto lenders to a flat-rate plan. DRN’s Enterprise Solution provides a flat-rate plan making it easy for lenders to spread the cost of vehicle location data across their portfolios versus adding individual fees to customers’ loan balances on a case-by-case basis. This simple strategy makes you more efficient, and allows you to use vehicle location data earlier in collections. You may find that using vehicle location data earlier in the collections cycle prevents some of those loans from going to skip. Plus, you are protected from costly CFPB fines for disparate treatment and disparate impact.