Tampa Bay, Fla. — To alleviate compliance issues associated with the Consumer Financial Protection Bureau (CFPB)’s targeting of the auto finance sector, Open Dealer Exchange (ODE) issued a press release encouraging finance sources to consider using electronic methods to standardize the industry.

ODE has streamlined the auto-buying process with its Digital Deal, which company officials said can assist in adhering to the CFPB’s call for “openness and transparency.” Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against lenders engaging in unfair, deceptive, or abusive practices. Noncompliance with CFPB rules could result in millions of dollars in fines and penalties, even lawsuits.

As auto lenders are subject to the CFPB investigative and enforcement authority, ODE officials said the Digital Deal provides an extensive level of security not available with paper documents. It provides lenders with the ability to flag and see possible discriminatory selling practices unwittingly committed due to human error — in addition to eliminating errors in data entry, missing signatures, missing documents and contract mistakes to name a few.

Steve Luyckx, ODE general manager, said that while extensive paperwork has been a mainstay of car purchases, modern technology has forged a new trail. He said he anticipates a time when traditional filing cabinets are superseded by cloud files.

“ODE is a vanguard for consumer protection in the auto industry because it does away with the high probability of human error — which consequently revolutionizes the [car buying] experience, eliminating two-thirds of the added time in the sales cycle and providing data-security vigilance,” Luyckx said. “Automated documents not only help lenders reduce the risk of noncompliance, but they are also more easily protected from fraud, identity thieves and natural disasters than their paper counterparts. The security can’t be argued.”

According to Luyckx, lenders should consider making internal operations 100 percent paperless. If noncompliance is suspected, a CFPB investigation will likely be broad-ranging, covering every aspect of lending operations, from advertising and marketing to loan underwriting and pricing to servicing, collection, repossession and credit reporting. Condensing all relevant information and making it easily accessible could go a long way in securing a positive outcome if an investigation is initiated, he claimed.

ODE consists of two separate divisions: Lender Services and Provider Exchange Network (PEN). ODE’s Lender Services division focuses on the relationship between the automotive lender and the dealership's main computer system, the dealer management system (DMS).

ODE enables lenders to become more integrated into a dealer's workflow throughout the entire vehicle purchase experience, including data validation services, electronic forms, eVaulting and funding packet transfers.