Auto Lenders Subject to CFPB Scrutiny – Open Dealer Exchange, LLC Says Digital Files Reduce Risk of Noncompliance

The Consumer Financial Protection Bureau has instituted strict regulations that govern how auto lenders operate, making them susceptible to investigations if noncompliance is suspected. Open Dealer Exchange offers paperless services that not only improve efficiency, but also limit the chances of lenders encountering compliance issues.

(Tampa Bay, FL) December 30, 2013 – In the years following the Great Recession, the Consumer Financial Protection Bureau (CFPB) has aggressively expanded its reach beyond large banks and focused its attention on the auto finance industry. Richard Cordray, director of the CFPB, recently stated a request for more "openness and transparency" for the agency's supervision of auto lending, demonstrating an effort to strike a balance in the way the bureau regulates transactions in the auto market[1]. Consequently, an answer to alleviating CFPB compliance issues has been established for lenders: Open Dealer Exchange, LLC (ODE), a joint venture of ADP and Reynolds and Reynolds, has streamlined the auto-buying process with its Digital DealTM, which includes electronic methods to standardize the industry and assist lenders in adhering to CFPB regulations.

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[2] – the consequences of 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 say the Digital DealTM provides an extensive level of security not available with paper documents by giving lenders 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. ODE says this also instills confidence in consumers due to knowing the auto buying process is standard.

Steve Luyckx, ODE general manager, says that while extensive paperwork has been a mainstay of car purchases, modern technology has forged a new trail – he anticipates a time when traditional filing cabinets are superseded by cloud files. According to Luyckx, the solution to ensuring compliance is straightforward:

As a preventative option, 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 [3]. Condensing all relevant information and making it easily accessible could go a long way in securing a positive outcome if an investigation is initiated.

"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," said Luyckx. "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."

While some in the industry prefer paper documents that encourage interaction with the customer, ODE officials say embracing the technologically-inclined world today is a necessary adaptation as many consumers live for convenience – a fact which makes digital innovation an attractive proposition due to its ability to make the automotive shopping experience shorter, faster and more accurate.

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). Due to the company's unique relationship with ADP Dealer Services and Reynolds and Reynolds, ODE is the only company in the industry who can safely and securely provide lenders with direct access to their dealers.

ODE successfully 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. ODE officials say digital services improve efficiencies in the finance process, resulting in increased profit and customer satisfaction – a necessary advantage in today's recovering economy.

ODE officials will attend the Vehicle Finance Conference & Exposition in New Orleans in January (22-24), and will be open to interviews and ODE demonstrations.

For more information about ODE and its services, visit

  1. Nelson, Gabe. "CFPB Chief Concedes Need for Balance." Automotive News, 12 Nov. 2013. Web. 17 Dec. 2013.
  2. "CFPB Sues CashCall for Illegal Online Loan Servicing." Consumer Financial Protection Bureau. N.p., 16 Dec. 2013. Web. 17 Dec. 2013.
  3. Willis, Christopher. "The CFPB: It's Focus on Auto Finance." N.p., June 2012. Web. 17 Dec. 2013.


About Open Dealer Exchange, LLC

A joint venture between CDK Global™, LLC and The Reynolds and Reynolds Company, Open Dealer Exchange is a technology leader within the automotive F&I process for connecting lenders and F&I product providers with their dealer partners throughout the United States and Canada. By providing a direct connection into the dealership's main network — the DMS — Open Dealer Exchange virtually removes the need for the dealer to leave their system-of-record during the F&I process. This innovative process results in increased operational efficiencies, reduced contract errors, and a more streamlined process with a lender or provider's franchised dealerships. For more information on Open Dealer Exchange and its divisions, please visit