CAPS Funding Guidelines
CAPS Funding Guidelines 2015 Credit Acceptance Policy Documentation CAPS Funding Guidelines Page 2 Table of Contents RETAIL INSTALLMENT SALES CONTRACT POLICY ........................................................................ 4 BUYER NAME POLICY ........................................................................................................................ 6 BUYER ADDRESS POLICY ................................................................................................................. 7 TRUTH IN LENDING ACT (TILA) CONTRACT DISCLOSURES POLICY ........................................... 8 CASH SELLING PRICE POLICY ........................................................................................................ 10 CONTRACT REASSIGNMENT POLICY ............................................................................................ 12 VEHICLE SERVICE CONTRACT POLICY ......................................................................................... 16 PUBLIC OFFICIAL FEES – TITLE, LICENSE, AND REGISTRATION FEES POLICY ...................... 19 PUBLIC OFFICIAL FEES – LIEN FEES POLICY ............................................................................... 20 GAP (GUARANTEED ASSET PROTECTION) POLICY .................................................................... 21 NY GAP ADDENDUM FORM POLICY ............................................................................................... 23 DEALER SIGNATURE POLICY.......................................................................................................... 24 DOCUMENTATION FEES POLICY .................................................................................................... 26 MICHIGAN CREDITOR / SELLER NAME POLICY ............................................................................ 28 CREDITOR / SELLER NAME POLICY ............................................................................................... 30 CREDITOR / SELLER ADDRESS POLICY ........................................................................................ 32 CREDIT APPLICATION POLICY ........................................................................................................ 33 CONSENT & AUTHORIZATION FORM POLICY ............................................................................... 34 CREDIT REPORT AUTHORIZATION FORM POLICY ...................................................................... 35 DECLARATION ACKNOWLEDGING ELECTRONIC SIGNATURE POLICY .................................... 36 PENNSYLVANIA OPTIONAL PRODUCTS DISCLOSURE FORM POLICY ..................................... 37 NOTICE TO CO SIGNER FORM POLICY ......................................................................................... 38 DISCLOSURE FORM POLICY ........................................................................................................... 39 ORIGINATIONS – DOWN PAYMENT / TRADE IN POLICY .............................................................. 41 ILLINOIS ERT (ELECTRONIC REGISTRATION AND TITLING) FEE DISCLOSURE FORM POLICY ............................................................................................................................................................ 43 HEAD OF FAMILY GARNISHMENT WAIVER (FL) POLICY ............................................................. 45 KANSAS VERIFICATION OF DELIVERY & RECEIPT OF TITLE FORM POLICY ........................... 46 MISSOURI DECLARATION OF DELIVERY & RECEIPT OF TITLE FORM POLICY ........................ 47 NEVADA AGREEMENT TO ARBITRATE FORM POLICY ................................................................ 48 NEVADA COMMUNICATION AUTHORIZATION CONSENT FORM POLICY .................................. 49 ARKANSAS WAIVER OF PURCHASER’S RIGHT TO SUE – ARBITRATION AGREEMENT POLICY ............................................................................................................................................................ 50 PRE-DELIVERY SERVICE FEE (FL) POLICY ................................................................................... 51 CAPS Funding Guidelines Page 3 DOCUMENTARY STAMP TAX (FL) POLICY ..................................................................................... 52 VERMONT DISCLOSURE FORM B-28 (VT) POLICY ....................................................................... 53 FAIR LENDING POLICY ..................................................................................................................... 55 NEW YORK FAIR LENDING PLAN .................................................................................................... 61 RESIDENCE FUNDING STANDARD ................................................................................................. 64 RESIDENCE POLICY - HOUSING TYPE .......................................................................................... 66 PHONE POLICY ................................................................................................................................. 67 INCOME POLICY – EMPLOYMENT TYPE ........................................................................................ 68 INCOME POLICY - PROOFS ............................................................................................................. 70 EMPLOYER INFORMATION POLICY ................................................................................................ 72 BANK POLICY .................................................................................................................................... 74 ORIGINATIONS – AUTOPAY POLICY .............................................................................................. 76 REFERENCE POLICY ........................................................................................................................ 77 INSURANCE POLICY ......................................................................................................................... 78 MILEAGE VALIDATION POLICY........................................................................................................ 79 ORIGINATIONS GPS SID POLICY .................................................................................................... 81 OFAC (OFFICE OF FOREIGN ASSETS CONTROL) POLICY .......................................................... 84 EMPLOYMENT VERIFICATION POLICY .......................................................................................... 85 CUSTOMER VERIFICATION POLICY ............................................................................................... 87 ADVANCE POLICY ............................................................................................................................. 88 BANKRUPTCY POLICY (FILED PRIOR TO ORIGINATION) ............................................................ 89 BANKRUPTCY POLICY (FILED AFTER ORIGINATION) .................................................................. 90 ITIN CUSTOMER POLICY.................................................................................................................. 91 CONSUMER IDENTIFICATION FUNDING STANDARD ................................................................... 92 FRAUD DETECTION POLICY ............................................................................................................ 94 PRIOR CUSTOMER POLICY ............................................................................................................. 96 ORIGINATIONS: COLLECTION ONLY PROGRAM POLICY ............................................................ 98 VEHICLE FUNDING STANDARD..................................................................................................... 100 TITLE TRANSFER POLICY .............................................................................................................. 103 CAPS Funding Guidelines Page 4 RETAIL INSTALLMENT SALES CONTRACT POLICY Policy The Retail Installment Sales Contract (“RISC”) is an agreement in which the customer agrees to purchase a vehicle by making a number of equal payments over a period of time (term). RISCs are assigned to Credit Acceptance, and a properly executed RISC must be provided for each account submitted through CAPS. POLICY DETAILS The RISC submitted for each account must be the correct version for the state in which the vehicle was purchased. The maximum (max) term on the RISC cannot exceed the CAPS approved max term. Request a new RISC if the max term exceeds the CAPS approved max term. Confirm all disclosures in the RISC are legible and properly aligned. The Originations system will set the first payment date to the same day of the following month, th th st except if the RISC is dated on the 29 , 30 , or the 31 in which case the Originations system will set the first payment date to the last day of the following month. The RISC with the customer’s original signature (not a copy) is required. Note: There are RISC sections requiring additional signatures from the buyer and co-buyer in the following states: AZ, AR, CA, HI, MI, NV, NM, PA, RI, TX, and WI. The following states require certain disclosures on the RISC to be printed in color: MI, AR, RI, and CA. nd All RISC pages must be signed or initialed by the driver and 2 signer, however, only the driver or second signer – not both – are required to sign the GAP and/or VSC sections of the RISC. Note: Missing customer initials on page 8 of the Nevada RISC may be remedied by issuing a correction letter for “Assignment section in RISC is not signed by dealer.” Additional RISC policy requirements may be found in other legal guidelines policies as identified below. ADDITIONAL INFORMATION Frequently Asked Questions Can the first payment due date be greater or less than 30 days from the RISC? Yes. The Originations system will set the first payment date to the same day of the th th st following month, except if the RISC is dated on the 29 , 30 , or the 31 , in which case the system will set the first payment date to the last day of the following month. The Originations system will assume February always has 28 days; therefore if a RISC is th th st th dated January 29 , 30 , or 31 , then February 28 will be the first payment date. How do I process a RISC with misaligned disclosures in the Itemization section? If the disclosure is touching a line but is legible, the disclosure is acceptable and no action is required. Disclosures that appear on the wrong line or that cross over the line require a correction letter. Request one by submitting a request to the Corporate Legal Department using the Ask a Question feature on PrideNet. If the disclosure is printed over existing text but the disclosure is legible, the disclosure is acceptable and no action is required. Disclosures printed over existing text that are not legible require a correction letter. Request one by using the Ask a Question feature on PrideNet. How do I process a RISC with information “crossed-out” in the Itemization and Other Disclosures section? Itemization & Other Disclosures Section: THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 5 Cross-outs are allowed with customer initials. Cross-outs without customer initials require a correction letter as long as the information is consistent with the information disclosed on other documents in the account package. Request a correction letter by using the Ask a Question feature on PrideNet. Example: Crossing out Superior and handwriting Southwest Re can be fixed with a correction letter as long as the VSC certification matches the corrected information. Other Clarifications: RISCs with a combination of printed and handwritten disclosures are acceptable. Handwritten information is not considered a cross-out. Can a copy of the RISC be submitted with the account package? No. The original RISC printed from CAPS 2.0 with the customer’s signature must be submitted with the account package. A copy is not acceptable. How do I process an account where the customer signed the ancillary product section but did not actually finance an ancillary product? Call the customer, confirm they did not purchase the ancillary product, and document the discussion in the account notes. Related Documents Truth In Lending Act (TILA) Contract Disclosures Policy THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 6 BUYER NAME POLICY Policy The name of the buyer and co-buyer must be completely and accurately disclosed on the Retail Installment contract. Reason Required Ensure the correct customer(s) are legally obligated on the contract. Accurate customer information can help collections. POLICY REQUIREMENTS Name of the buyer and co-buyer must be completely and accurately disclosed. Validate the buyer/co-buyer’s name against the: Credit Application Bureau Social Security Card Ensure CAPS is updated to reflect the validated information. ADDITIONAL INFORMATION Frequently Asked Questions Do the buyer and co-buyer have to be listed in any particular order on the contract? Both the buyer and co-buyer are equally obligated on the contract, so there is no requirement that the parties be listed in any particular order on the retail installment contract. The only exception is the state of Illinois. In Illinois the co-buyer is a defined party, ensure that the right party is identified as the co-buyer. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 7 BUYER ADDRESS POLICY Policy Buyer’s address consists of the street number, name, city, state, zip code, and apartment number (if applicable). Reason Required Determines the address requirement for “proof of residence.” Ensures payment booklet and legal notices can be sent to the correct address. POLICY REQUIREMENTS Physical address of the buyer must be completely and accurately disclosed. The physical address on the contract must be the buyer’s if the co-buyer’s address is different. Validate the buyer/co-buyer’s address against the: Credit Application Bureau Other proofs in the contract package Follow the steps below if the buyer’s address on the contract does not match the address on the credit application: Educate the dealer when the buyer’s address on the contract: Does not substantially match the address on the other deal documents and Is a P.O. Box, but there is a physical address on the other documents. Request a new contract from the dealer when the buyer’s address on the contract is missing. Ensure the correct address is tied to both parties (buyer and co-buyer) in CAPS when the buyer’s address on the contract reflects the co-maker’s address. Ensure CAPS is updated to reflect the validated information. ADDITIONAL INFORMATION Frequently Asked Questions What should I do when the buyer’s address does not match the address on the other deal documents? Educate the dealer informing him/her that we need the complete, correct physical address of the buyer on the contract. What should I do when the buyer’s address is a P.O. Box, but there is a physical address on the other documents? Educate the dealer informing him/her that we need the complete, correct physical address of the buyer on the contract. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 8 TRUTH IN LENDING ACT (TILA) CONTRACT DISCLOSURES POLICY Policy The Truth in Lending information should be disclosed completely and accurately on the Retail Installment Contract. Reason Required The Federal Truth in Lending Act (Regulation Z) requires the complete and accurate disclosure of the terms and cost of customer credit. POLICY REQUIREMENTS The following items must be disclosed in the Truth in Lending Disclosures section of the Retail Installment Contract: Annual Percentage Rate (APR) The maximum APR cannot exceed the state usury limits or the policy limits set by Credit Acceptance. Please refer to the Master Table of State Limits for the maximum allowable APR. Finance Charge Amount Financed Total of Payments Total Sale Price Down Payment If any of the above disclosures are missing, request a new contract. The above items must be disclosed accurately. For purposes of determining whether a disclosure is accurate. The APR is considered accurate if the disclosed APR is within 1/8 of 1% (.125%) of the disclosed APR. How to determine an APR violation Is the disclosed APR plus 1/8 of 1% (.125%) less than the correct APR? If yes, there is an APR violation. If no, there is not an APR violation. Is the disclosed APR minus 1/8 of 1% (.125%) greater than the correct APR? If yes, there is an APR violation. If no, there is not an APR violation The Finance Charge is considered accurate if the disclosed Finance Charge is not more than $5.00 above or below the exact finance charge in a transaction involving an Amount Financed of $1,000 or less, or not more than $10 above or below the exact finance charge in a transaction involving an amount financed of more than $1,000. How to determine a Finance Charge violation: If the disclosed Finance Charge plus the applicable tolerance less than the correct Finance Charge? If yes, there is a finance charge violation. If no, there is not a finance charge violation. Is the disclosed Finance Charge minus the tolerance greater than the correct Finance Charge? If yes, there is a finance charge violation. If no, there is not a finance charge violation. The Amount Financed will be considered accurate if the sum of all items in the Itemization of Amount Financed equals the Amount Financed. The Total of Payments will be considered accurate if it equals the number of payments multiplied by the amount of payments. The Total of Payments will also equal the sum of the Amount Financed plus the Finance Charge. The Total Sale Price will be considered accurate if it equals the sum of the Total of Payments THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 9 plus the Down Payment. The Down Payment must equal the Total Down Payment reflected in the Itemization of Amount Financed section. Request a new contract from the dealer when the above items are not accurate as disclosed and the final numbers are higher than on the original contract. Send a correction letter when the above items are not accurate as disclosed and the final numbers are lower than on the original contract. ADDITIONAL INFORMATION Frequently Asked Questions How do I process a contract with any misaligned disclosures? Truth In Lending Disclosures Misalignments: If the disclosure is touching a line but is legible, the disclosure is acceptable and no action is required. If any part of the disclosure is outside the box, request a new contract from the dealer partner. If any part of the disclosure is printed over existing text but the disclosure is legible, the disclosure is acceptable and no action is required. How do I process a contract with information ‘crossed-out’? Truth In Lending Disclosures Section: Cross-outs are not allowed unless the customer has initialed the correction. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 10 CASH SELLING PRICE POLICY Policy The cash price of the vehicle needs to be accurately disclosed on the contract and should reflect the amount the buyer / co-buyer has agreed to pay for the vehicle being purchased. Reason Required The cash price must be accurately disclosed to the buyer/co-buyer in order for Credit Acceptance to have a legally enforceable contract. POLICY REQUIREMENTS The primary validation source for the cash price is the Retail Installment Contract. If supporting documents yield a discrepancy in the cash price, additional analysis is required. For the following states the cash price may include the actual purchase price of the vehicle and additional items that need to either be included with the cash price of the vehicle or separately itemized on Line 1: Arkansas and Michigan: Costs/fees itemized on Line 1(a) through Line 1(e) on the contract need to be separately itemized on the contract, and included in the total for Cash Price. Florida: A ‘pre-delivery service fee’ may be included in the cash price. This fee is not to be separately disclosed, but included in the Cash Price. This fee is associated with ‘prepping’ the vehicle for sale. This fee is not a documentation fee and any charges for processing paperwork cannot be included in the cash price. Mississippi and Oklahoma: If a documentation fee is charged it must be included in the cash price. New Jersey: Sales tax must be itemized and included in the total cash price. New York: If a ‘tire fee’ is charged, the ‘tire fee’ must be included with the NY Inspection Fee into the cash price. If the ‘tire fee’ is not charged, the NY Inspection Fee can be itemized. NY Document Processing fee cannot be itemized; it must be included in the cash price. Tennessee: Gross Receipt Tax and/or Business Tax can be itemized on line 5I…OR it can be included the cash price. Texas: Sales tax can be itemized under the cash price section and it can be included in the cash price…OR the sales tax can be itemized on Line 4(G) or 4(H) but, if it is it cannot be included in the cash price. Check the buyer’s order for documentation. Washington: Sales tax, dealer doc service fee, and dealer EMS admin fee are itemized under the cash section and they are to be included in the cash price. Iowa: A documentation fee can be included in the cash price if it is charged OR the documentation fee can be separately itemized but not both. Virginia: If a business tax is charged, this tax needs to be included in the sales price of the vehicle on the contract and itemized on the Buyer’s Order. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 11 Follow the steps below when there is a cash price discrepancy: If the cash price is missing from the contract, request a new contract with the correct cash price. If the cash price is disclosed on the contract improperly (per specific state disclosures): 1. Remove the ‘charges’ included in the cash price that are not allowed or add charges that are to be included in the cash price, 2. Send a correction letter disclosing the correct cash price and charges or fees, and 3. Update ACS accordingly. ADDITIONAL INFORMATION Frequently Asked Questions What should I use to validate the cash price? The primary validation source for the cash price is the Retail Installment Contract. The buyer’s order and/or congratulations page can be used as supporting documents, but the contract always supersedes. Where is the cash price information located on the contract? Cash price must be disclosed in the Itemization of Amount Financed section of the contract. It is Line 1 on the contract and the field title is: Cash Price (including accessories and improvements to the vehicle). THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 12 CONTRACT REASSIGNMENT POLICY Credit Acceptance accepts all legally compliant customer contracts that dealers assign. If the contract is not legally compliant and in certain other circumstances, the Company or the dealer may initiate a return or reassignment of the contract to the dealer, or a request for a dealer repurchase of the contract. In all instances, Credit Acceptance shall take the necessary steps to execute the return, reassignment or repurchase. In executing the return or reassignment of a contract the Company shall take all necessary steps appropriate to place the customer in the position they were in prior to the contract being submitted to Credit Acceptance. In executing a repurchase the Company shall take all necessary steps appropriate to the circumstances surrounding the event leading to the repurchase the contract. These steps may include closing the account in the Company’s records, cancelling Auto Pay, refunding customer payments, deleting the trade line from the customer’s credit report, releasing our lien on the vehicle, and cancelling any ancillary products financed as of the contract date and rebating the account. Credit Acceptance may take additional action to assist the customer as appropriate. Policy POLICY REQUIREMENTS Contract Return A contract is returned when a dealer submits a contract that fails to meet legal requirements, in which case the Company will not accept assignment of the contract. A contract may be returned to the originating dealer in the following circumstances: Contract not mailed. The dealer submits the contract in CAPS, but does not mail the contract package. When a contract is returned in this scenario, the Company takes each of the following steps: o o o o o o Cancel Auto Pay Cancel GPS Refund customer payments. Refunds are issued to the customer but mailed to the dealer. Delete trade line from customer’s credit report, if necessary Release lien on the vehicle Complete reassignment in CAPS (optional) Document deficient. The dealer submits the contract in CAPS and mails the contract package, but the contract documents are legally deficient in some respect. When a contract is returned in this scenario, the Company takes each of the following steps: o o o o o o o o Cancel Auto Pay Cancel GPS Refund customer payments Delete trade line from customer’s credit report, if necessary Release lien on the vehicle Complete reassignment in CAPS Send a letter to the customer notifying them of the contract return Return the contract to the dealer Contract Reassignment After determining a contract is legally compliant and the assignment is accepted by the Company, a contract may be reassigned to the dealer prior to funding. A reassignment occurs when Credit Acceptance transfers its assigned interest in a contract back to the dealer. This occurs when the dealer submits the contract in CAPS, mails the contract package to the Company, the contract is received and the Company has accepted the assignment, but has not paid the dealer an advance. Credit Acceptance may initiate a reassignment when the Company determines the dealer failed to comply with the terms of the Dealer Agreement as it relates to the contract, receivable, and/or transaction with the customer who is a party to the contract. Dealers may request that a contract be reassigned for any reason within 6 months from the contract date, and will not incur a cancellation fee if a reassignment is requested THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 13 within 90 days from the contract date. If the reassignment request is made beyond 90 days from the contract date, the Company may charge the dealer a cancellation fee of $100 for every month past the 90 day window. If the request is made 180 days beyond the contract date, approval from a vice president or Corporate Legal is required. In either case, the dealer is required to repay any repossession, storage or any other fees incurred. When a contract is reassigned, the Company takes the following steps: Cancel Auto Pay Cancel GPS Refund customer payments. Refunds are issued to the customer but mailed to the dealer. Delete trade line from customer’s credit report Release lien on the vehicle Complete reassignment in CAPS Send a letter to the customer notifying them of the reassignment Return the contract to the dealer Close the account in LSS using the Dealer Cancel Code Send a Hold Harmless Letter to the dealer Cancel VSC/GAP as of the contract date, and rebate account appropriately If the reassignment request is made beyond 90 days from the contract date, a cancellation fee of $100 for every month past the 90 day window is charged. The dealer is required to repay any repossession, storage or any other fees incurred. Contract Repurchase A contract may be repurchased by the dealer after funding. Repurchase occurs when the contract has been submitted in CAPS, the contract package has been received, the Company has accepted the assignment, the deal has been funded, and the dealer requests to repurchase the contract. The Company may also require the dealer to repurchase a contract when it determines the dealer failed to comply with the terms of the Dealer Agreement as it relates to the contract, receivable, and/or transaction with the customer who is a party to the contract. When a contract is repurchased, the Company takes all steps appropriate to the circumstances surrounding the event leading to the repurchase. Those steps may include one or more of the following: Cancel Auto Pay Cancel GPS Refund customer payments. Refunds are issued to the customer but mailed to the dealer. Delete trade line from customer’s credit report Release lien on the vehicle Complete reassignment in CAPS Send letter to the customer Return the contract to the dealer Close account in LSS using the Dealer Cancel Code Send a Hold Harmless letter to the dealer Cancel VSC/GAP as of the contract date, and rebate account appropriately Recover Advance or Repurchase Price from the Dealer If the repurchase request is made beyond 90 days from the contract date, the Company may charge the dealer a cancellation fee of $100 for every month past the 90 day window. If the request is made 180 days beyond the contract date, approval from a vice president or Corporate Legal is required. In either case, the dealer is required to repay any repossession, storage or any other fees incurred. Settlement Agreement The Company may enter into a settlement agreement with a customer, the terms of which may require the contract to be reassigned to the dealer. When a contract is reassigned in this scenario, the Company takes the following steps: Cancel Auto Pay Cancel GPS THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 14 Send a letter to the customer Close the account in LSS using the Dealer Cancel Code Release lien on the vehicle Where appropriate, the Company may also take the following additional steps: Refund customer payments Delete trade line from customer’s credit report Return the contract to the dealer Cancel VSC/GAP as of the contract date, and rebate account appropriately Recover advance ADDITIONAL INFORMATION Frequently Asked Questions What happens to the customer’s down payment when a deal is reassigned, returned or repurchased? It depends on the circumstances. Because the customer pays the down payment to the dealer, the Company is not in receipt of those funds. If the customer elects to keep the vehicle, the dealer would typically retain the down payment. Conversely, if the customer relinquishes the vehicle, the dealer should return the down payment. Credit Acceptance will assist the customer as appropriate to the circumstances to obtain return of the down payment. If I receive a complaint from a customer about a dealer, or I suspect dealer fraud, what should I do? You should bring it to the Complaint Escalation Team’s attention by sending an email to [email protected]. Can a reassignment request be completed for an account that has been assigned to our complaint Escalation Team for review? Not without confirming with the Complaint Escalation Team. In order to process a reassignment when the CLGL action code has been applied, the Dealer Service Center should email the Complaint Escalation Team to confirm if the account can be canceled. If the account may be cancelled, complete the reassignment. If not, call and inform the dealer. When can an analyst fund a new contract that has an open account stipulation with a pending reassignment for a prior account? The credit memo for repayment of advance on the prior contract must be applied prior to funding the new contract. How will the Company ensure that we receive repayment of the advance if the dealer requests reassignment of a contract that was already funded? Accounts Payable and the Dealer Service Center will work closely to ensure that these repayments are received, and resolve contracts with dealers where repayment has been delayed. Can a reassignment be reversed once the request has been submitted? No. It’s important that analysts communicate this to the dealer at the time reassignment is requested. Please see a DSC manager if a request has been submitted in error. If the dealer requests reassignment on a contract that has a GPS-SID, can the dealer reuse the same GPS-SID device on a new contract? Yes, but only if the reassignment is processed within 90 days of the original contract date. If the reassignment is processed more than 90 days from the original contract date, the dealer will lose the ability to re-use the GPS-SID device. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 15 What does the dealer do if the canceled deal has been sent to the auction? Once the advance is paid back we fax a release form to the auction and dealer. The dealer takes the release to the auction and pays any auction fees. The auction will then release the vehicle to the dealer. If there is a mistake on a deal but it has already been submitted, how can I correct it? Mistakes including those impacting contract terms, itemization and products generally require a new contract. You must reassign the deal and resubmit it as a new approval. Other changes such as addresses, phone numbers and insurance information are generally something the DSC can correct. Version History Version Date Description Author 1 9/10/14 J Lum 1.1 12/3/14 The Contract Reassignment Policy is an existing practice for Analysts that is being documented for the first time. Revised to clarify the various steps the Company takes when a contract is returned, reassigned, or repurchased. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. J Lum 5.13.2013/v.1 CAPS Funding Guidelines Page 16 VEHICLE SERVICE CONTRACT POLICY Policy A Vehicle Service Contract is an optional product that the customer can purchase when buying a vehicle that covers certain vehicle repairs. The Vehicle Service Contract is not required on any account, it is optional. If dealer sells an optional vehicle service contract with the installment contract, the information should be disclosed completely and accurately on the Retail Installment Contract. The optional vehicle service contract disclosure on the Retail Installment Contract acknowledges the customer has agreed to finance the vehicle service contract. If the dealer sells an optional vehicle service contract with the installment contract the VSC certificate should be included with the contract package. POLICY REQUIREMENTS Retail Installment Contract Guidelines Only ancillary products from Credit Acceptance approved vendors can be financed on retail installment contracts assigned to Credit Acceptance. In the section where the contract states “Optional Extended Warranty or Service Contract Paid to” should be listed as follows: If the service contract company is… Then the contract should disclose: Superior Protection Plan Wynn’s Plus Value Care/Choice Mechanical Protection Plan Old United Casualty Company SouthwestRe Wynn’s Extended Care, Inc Wynn’s Mechanical Protection Plan, MPP, or MPP Co., Inc. Old United Casualty Company, Old United, or Old United Casualty The price of the vehicle service contract must be separately itemized; and must be included in the ‘total of other charges’. In the “Optional Extended Warranty or Service Contract” section of the Retail Installment Contract the following information must be disclosed accurately: Price ($) Customer’s Initials (indicates customer’s intent to purchase Term (e.g., 24 Months/24000 Miles) Vehicle Service Contract Company Follow the steps below if the vehicle service contract information on the retail installment contract is missing or inaccurate: Educate the dealer that the ‘Optional’ section of the contract must be completed: If the information under the ‘Optional’ section is missing or inaccurate, then proceed if the Warranty Certificate is complete and accurate. Educate the dealer that the Itemization section of the contract must be completed: If the name of the vehicle service contract company is inaccurate or missing under the itemization section, then proceed as normal if the ‘Optional’ section is complete. If the price of the vehicle service contract is not included in the amount financed but the Warranty Certificate supports it, call the dealer to determine if he intends to finance the vehicle service contract and request a new contract if the dealer does want to finance the VSC product. If the dealer does not want to finance the VSC product send a correction letter that says ‘You do not have a Vehicle Service Contract on THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 17 this contract.’ If the VSC section of the contract has customer initials and VSC amount and VSC is not itemized on the contract then call the dealer to see if he intends to finance VSC product and request a new contract if the dealer does want to finance the VSC product. If the dealer does not want to finance the VSC product send a correction letter that says ‘You do not have a Vehicle Service Contract on this contract.’ Vehicle Service Contract Guidelines If an optional vehicle service contract is purchased, a VSC certificate from one of our providers; Mechanical Protection Plan (MPP), Old United Casualty Company (OUCC), Wynn’s or SouthwestRe (SPP) must be included with the contract package. The Vehicle Service Contract with customer’s original signature is required. Request a new Vehicle Service Contract with the customer’s original signature if the customer’s signature is missing. Request a faxed copy of the Vehicle Service Contract if the dealer’s signature is missing. The ‘warranty’ company in ACS must match the certificate signed by the customer. The ‘warranty’ term and plan type in ACS must match the term and plan type on the certificate. Note: The VSC term cannot exceed the installment contract term. The only exception is if the installment contract term is less than 24 months. VSC certificate number must match the certificate number in ACS Note: For SPP certificates, the alpha prefix before the numeric certificate number should be entered (no space between the alpha and numeric fields). For Wynn’s. MPP, and Old United Casualty Company, only the certificate number should be entered. Surcharges marked on the certificate must match the surcharges selected in ACS. Vehicles with mileage that exceeds 175,000 miles are not eligible for vehicle service contract coverage. Vehicles that are greater than 13 years old are not eligible for vehicle service contract coverage. There are certain vehicles that are not eligible for vehicle service contract coverage. Please refer to the following rate sheets for details: VSC Rate Card (SouthWest Re and Wynn’s) VanTuyl VSC Rate Sheet ADDITIONAL INFORMATION Frequently Asked Questions Where is the vehicle service contract information located on the contract? The vehicle service contract information is located in two places on the contract: Under the Itemization as: Cost of Optional Extended Warranty or Service Contract Paid to _____________ $____________________ “Optional Extended Warranty or Service Contract” section How do I proceed if the vehicle service contract deductible amount on the OH Retail Installment Contract is incorrect or missing? If the vehicle service contract deductible amount is disclosed on the contract improperly (incorrect or missing), send a correction letter disclosing the correct deductible amount. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 18 Who do I contact for information regarding VSC questions? Terri Whitehead extension: 4251 What if the VSC certificate is not included in the installment contract package? If the retail installment contract lists the VSC name and an eligible VSC term, enter the company code, term, plan type and ‘warranty’ date from the installment contract in the ‘warranty’ screen in ACS. Enter ‘9999’ in the certificate number field and create a stip requesting the missing certificate from the dealer. Do not fund the deal until the certificate is received. If the installment contract does not list the VSC name and an eligible VSC term, call the dealer and request the missing certificate. Do not place the account on hold until the certificate is received – the account must remain in the ‘Warranty’ queue. Note: If the account is placed on hold without the vehicle service contract information, the account will have to be re-keyed once the VSC certificate is received. What if the VSC doesn’t qualify under the options listed in ACS? Notify the dealer that the VSC does not qualify and the deal must be recontracted without a service contract or with a qualifying vehicle. What if the dealer is not receiving the full service contract commission in the advance? Refer to the VSC pricing sheets located on SharePoint. The dealer may not have charged the correct retail price for the service contract. Contact the dealer and discuss the change. What do I do if I receive a corrected VSC certificate after the deal has been dropped? Update the ‘warranty’ screen in ACS and update the VSC certificate number in the Service Contract (Ancillary Products) window in Artiva. Are Canadian vehicles eligible for a VSC? No. The VSC vendors will not cover Canadian vehicles under the service contract. What do I do if the maker and/or co maker’s name is missing or inaccurate on the Vehicle Service Contract? If the maker and/or co maker’s name is missing on the Vehicle Service Contract we need a copy of the contract with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the Vehicle Service Contract matches the signature on all of the other documents in the account package we can accept the contract. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the contract with the maker and/or co maker’s name listed correctly. Common Pitfalls Not ensuring the vehicle service contract information is accurately disclosed. Funding without receiving the VSC certificate. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 19 PUBLIC OFFICIAL FEES – TITLE, LICENSE, AND REGISTRATION FEES POLICY Policy Title, License, and Registration fees are charged to the customer for the costs used in order to title and/or register the vehicle in the state. Reason Required The title, license, and registration fees affect the advance amount and adjust the risk associated with the deal. POLICY REQUIREMENTS The title, license, and registration fees must be disclosed on Line 5F unless otherwise noted on the Master Table of State Limits. Title, license, and registration fees charged to the customer cannot exceed the maximum fee allowed by the state in which the vehicle will be titled and such fee must be disclosed properly on the contract. If the title, license, and registration fees disclosed on the retail installment contract are within the applicable state compliance limits, it is not necessary to validate such fees against ancillary documents, including the Bill of Sale, no further action is needed. If the title, license, and registration fees exceed the applicable state compliance limits the contract will not be in compliance. Review other deal documentation, including the bill of sale, to determine if the lien fee is disclosed correctly on the retail installment contract, and Send correction letter accordingly. Per the rule, the state in which the vehicle is titled determines the fees paid. If the maker state is different than the dealer state, then the rules from maker state apply, except when there is a specific documentation that shows that the car is titled in the dealer state. Follow the steps below if the title, license, and registration fees on the retail installment contract are disclosed inaccurately: If lien fees disclosed on the contract exceeds the relevant state maximum and the dealer can’t provide documentation to support the disclosed fee then: The title, license, and registration fee is excessive. reduce the disclosed title, license, and registration fee to the maximum amount allowed by the relevant state, and Send a correction letter noting the changes to the line on the contract where the title, license, and registration fee is disclosed, together with the revised title, license, and registration fee amount. Note: Any changes to the lien fee amount will affect the ‘Total of other Charges’ and ‘Amount Financed’. If the title, license, and registration fee is disclosed on the wrong line of the contract, this is a disclosure error that can be corrected with a correction letter. The correction letter will need to remove the fee from the incorrect line and re-disclose it on the correct line. ADDITIONAL INFORMATION Frequently Asked Questions Where are the title, license, and registration fees disclosed on the contract? Title, license, and registration fees are disclosed in the Itemization of Amount Financed. The title, license, and registration fees are generally required to be disclosed on Line 5F (certificate of title, license, and registration), unless otherwise noted on the Master Table of State Limits. Common Pitfalls Not ensuring the title, license, and registration fees are accurately disclosed. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 20 PUBLIC OFFICIAL FEES – LIEN FEES POLICY Policy Lien fees are charged to the customer for costs paid to the state for placing a Credit Acceptance lien on the purchased vehicle (the fee paid to perfect, release, or satisfy a security interest in the vehicle). Reason Required The lien fees affect the advance amount and adjust the risk associated with the deal. POLICY REQUIREMENTS The lien fees must be disclosed on Line 5E unless otherwise noted on the Master Table of State Limits. Lien fees charged to the customer cannot exceed the maximum fee allowed by the state in which the vehicle will be titled and such fee must be disclosed properly on the contract. If the lien fees disclosed on the retail installment contract are within the applicable state compliance limits, it is not necessary to validate such fees against ancillary documents, including the Bill of Sale, no further action is needed. If the lien fee exceeds the applicable state compliance limits the contract will not be in compliance. Review other deal documentation, including the bill of sale, to determine if the lien fee is disclosed correctly on the retail installment contract, and Send correction letter accordingly. The state in which the vehicle is titled determines the fees paid. If the maker state is different than the dealer state, then the fee amounts from maker state apply. Notwithstanding the fact the vehicle is titled in the maker state, if the dealer provides documentation to support fees that were paid to the dealer state, those fees are also allowed to be financed (and disclosed on the appropriate line) on the contract. Follow the steps below if the lien fees on the retail installment contract are disclosed inaccurately: If lien fees disclosed on the contract exceeds the relevant state maximum and the dealer can’t provide documentation to support the disclosed fee then: The lien fee is excessive. Reduce the disclosed lien fee to the maximum amount allowed by the relevant state, and Send a correction letter noting the changes to the line on the contract where the lien fee is disclosed, together with the revised lien fee amount. Note: This includes disclosing a lien fee on the contract when the state does not allow a lien fee. Note: Any changes to the lien fee amount will affect the ‘Total of other Charges’ and ‘Amount Financed’. If the lien fee is disclosed on the wrong line of the contract, this is a disclosure error that can be corrected with a correction letter. The correction letter will need to remove the fee from the incorrect line and re-disclose it on the correct line. ADDITIONAL INFORMATION Frequently Asked Questions Where are the lien fees disclosed on the contract? Lien fees are disclosed in the Itemization of Amount Financed. The lien fees are generally required to be disclosed on Line 5E (perfecting, releasing or satisfying a security interest), unless otherwise noted on the Master Table of State Limits. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 21 GAP (GUARANTEED ASSET PROTECTION) POLICY Policy GAP (Guaranteed Asset Protection) is an optional product that the customer can purchase when buying a vehicle that is designed to help reduce the unpaid balance of an account in the event of the total loss of the vehicle. GAP is not required on any account, it is optional. The optional GAP product information should be disclosed completely and accurately on the Retail Installment Contract. If dealer sells an optional GAP product with the installment contract, we require a GAP addendum and GAP acceptance form signed by the customer to be included in the contract package. POLICY REQUIREMENTS Retail Installment Contract Guidelines Only ancillary products from Credit Acceptance approved vendors can be financed on retail installment contracts assigned to Credit Acceptance. The customer’s original signature is required in the GAP section of the Retail Installment Contract. (indicates customer’s intent to purchase) The GAP section of the contract must be dated the same as the contract. GAP Addendum and GAP Acceptance of Coverage Guidelines If an optional GAP product is purchased, a signed GAP addendum and GAP Acceptance of Coverage form must be included with the contract package. The GAP Addendum with customer’s original signature is required. Follow the steps below if the GAP addendum is incomplete: Request a new GAP Addendum with the customer’s original signature if the customer’s signature is missing. Request a faxed copy of the GAP Addendum if the dealer’s signature is missing. ADDITIONAL INFORMATION Frequently Asked Questions Where is the GAP (Guaranteed Asset Protection) disclosed on the contract? The disclosure is located in two places on the Retail Installment Contract. GAP Protection section. Under the Itemization of Amount Financed section as to (Name of the GAP Provider) for Optional GAP Protection………….$_______________ What do I do if the maker and/or co maker’s name is missing or inaccurate on the GAP Addendum? If the maker and/or co maker’s name is missing on the GAP Addendum we need a copy of the form with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the GAP Addendum matches the signature on all of the other documents in the account package we can accept the GAP Addendum. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the GAP Addendum with the maker and/or co maker’s name listed correctly. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 22 Who do I contact if I have GAP questions? Terri Whitehead extension: 4251 What if the GAP addendum is not included in the installment contract package or the addendum has the wrong prefix? Enter the company in the GAP window and create a stipulation asking for the missing or correct addendum. Do not fund the deal until the correct addendum is received. What if the GAP premium field in the itemization section is grayed out? The dealer-partner is not currently set up to sell GAP in our system. Contact the Dealer Support Group to see if the dealer is approved to sell GAP. What do I do if I receive a GAP addendum after the deal has been dropped? Update the addendum number in the GAP screen in CAPS. Artiva will be updated with the correct addendum number once the deal is paid. Common Pitfalls Funding without receiving the required GAP forms. Related Documents Originations New York GAP Addendum Form Policy Servicing Insurance – GAP Claim Policy THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 23 NY GAP ADDENDUM FORM POLICY Policy The New York GAP Addendum form is an addendum to the New York retail installment contract. The New York GAP Addendum acknowledges that Credit Acceptance has given the customer notice that in the event of the theft, confiscation or destruction of the vehicle, the customer does not owe the difference between their net unpaid balance and the actual cash value. A properly completed New York GAP Addendum Form must be submitted for each account originated in the state of New York. POLICY REQUIREMENTS A properly completed New York GAP Addendum Form must be submitted for each account originated in the state of New York. The New York GAP Addendum form must be signed by the buyer(s). The New York GAP Addendum form must be dated on or before the contract date. If the dealer fails to submit the New York GAP Addendum form then hold funding for the form until the form is received. If the buyer and/or co-buyer’s signature is missing then hold funding for a signed copy of the New York GAP Addendum. If the date is missing or is after the contract date then educate the dealer on this issue, document ACS and continue with funding the contract. ADDITIONAL INFORMATION Frequently Asked Questions What do I do if the maker and/or co maker’s name is missing or inaccurate on the New York GAP Addendum form? If the maker and/or co maker’s name is missing on the New York GAP Addendum form we need a copy of the form with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the New York GAP Addendum form matches the signature on all of the other documents in the account package we can accept the form. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the form with the maker and/or co maker’s name listed correctly. Where can the dealer obtain a New York GAP Addendum Form? The dealer can obtain a New York GAP Addendum form via CAPS (the form will print with the deal package). Common Pitfalls Not educating the dealer about a missing date on the New York GAP Addendum form. Not holding for a signed copy of the New York GAP Addendum form. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 24 DEALER SIGNATURE POLICY Policy The retail installment contract must be signed properly by the Seller / Creditor in all designated areas. Reason Required Proves the dealer has agreed to finance the vehicle. POLICY REQUIREMENTS The seller signs the contract in two places: Execution section Assignment section A complete signature reflects signature of the seller, title of the seller, and date of signature. If the dealer fails to sign the execution section of the contract then: The dealer can either provide a new contract or we can mail the contract to get it signed (fax copies are not acceptable). Keane sends the deal to the New Contract queue. A stipulation is created by Keane on the left that says, “Contract not signed, sent to New Contract queue”. Keane notes ACS accordingly. Southfield does the follow-up using Keane Production database to ensure new contract is received. If the dealer fails to sign the assignment section of the contract then: Request a correction letter. Select ‘Other’ in the correction letter database and update the database as follows: Disclosed inaccurately: Seller signature missing in the Assignment section Disclosed accurately: See notes Notes: Your dealership has assigned this contract to Credit Acceptance Corporation in accordance with the terms and conditions set forth on the reverse side of the retail installment contract. This assignment is without recourse. You must make all future payments to Credit Acceptance Corporation, 25505 West 12 Mile Road, Southfield, MI 48034-8339. ADDITIONAL INFORMATION Frequently Asked Questions Whose responsibility is it to ensure the customer has a copy of the executed agreement? Inform the dealer that it is the dealer’s responsibility to ensure a copy of the executed agreement is provided to the customer(s). Do we need a new contract if the dealer fails to disclose his/her title? There is no need for a new contract when the dealer signs it appropriately, but fails to disclose his/her title. No need to make an outbound call for just this reason, however use the opportunity to educate the dealer if you notice this scenario and you have the dealer on the phone. How do I proceed if the ‘Seller’ section of the Execution/Assignment section is missing? If the ‘Seller’ section of either the Execution or Assignment portion of the Dealer Signature is missing educate the dealer to disclose the name of the dealership. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Common Pitfalls Page 25 Not requesting a new contract if the dealer fails to sign the execution section of the contract. Not requesting a correction letter if the dealer fails to sign the assignment section of the contract. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 26 DOCUMENTATION FEES POLICY Policy Documentation (doc) fees are charges to all customers (unless prohibited by state law) for the costs of preparing documents related to the sale of the vehicle. Reason Required The documentation fees affect the advance amount and adjust the risk associated with the deal. POLICY REQUIREMENTS If the documentation fees disclosed on the retail installment contract are within the applicable state compliance limits, it is not necessary to validate such fees against ancillary documents, including the Bill of Sale, no further action is needed. If the documentation fee exceeds the applicable state compliance limits the contract will not be in compliance. Review other deal documentation, including the bill of sale, to determine if the documentation fee is disclosed correctly on the retail installment contract, and Send correction letter accordingly. Some states specify how the documentation fees are to be disclosed on the contract (i.e., included in the cash price, itemized separately, etc.). Please refer to the Master Table of State Limits for those specifications. Documentation fees are disclosed as to (to whom) for (the purpose) $ (amount) To whom: Seller’s (Dealership) Legal Name or Authorized DBA. This name is the same as the name disclosed on the top of the contract. It is acceptable to use ‘dealer’ or ‘seller’ or ‘creditor’, but we prefer the actual dealer name. Credit Acceptance is not acceptable. The purpose: Depending upon the state, documentation fees may be referred to something other than a documentation fee. Please refer to the Master States Limit Table to determine how the state refers to the fee. If there is no guidance in the master state limits table, then the purpose should be Documentation Fee. The amount: The amount of the documentation fee cannot exceed the state maximum. Follow the steps below if the documentation fees on the retail installment contract are disclosed inaccurately: If the documentation fee is included in the cash price in error or if the documentation fee is included in the cash price in error, but not itemized on the contract: Send a correction letter, assuming: We have supporting documentation showing the amount of the doc fee, The amount is permitted by the state. The correction letter should disclose the cash price without the doc fee and separately disclose the doc fee. If the documentation fee is not included in the amount financed the fee cannot be added to the contract even if it is listed on the purchase order. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 27 If the documentation fee is disclosed on the contract, but the amount financed doesn’t reflect it then if the dealer wants to charge the fee and include it in the amount financed we will need a new contract. Otherwise take as is. If the documentation fee is itemized as paid to Credit Acceptance send a correction letter identifying the dealer as the party to whom the fee was paid. ADDITIONAL INFORMATION Frequently Asked Questions Where are the documentation fees disclosed on the contract? The documentation (doc) fees must be disclosed under the Itemization of Amount Financed on the Retail Installment contract unless otherwise noted on the Master Table of State Limits. The line number may vary depending on the state. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 28 MICHIGAN CREDITOR / SELLER NAME POLICY Policy The name of the properly licensed dealer (creditor / seller) must be disclosed on the installment sales contract. Reason Required We can only accept installment sales contracts from properly licensed Dealers enrolled in the Credit Acceptance program and where the seller name on the contract matches the name as reflected on the dealers Installment Sellers License. POLICY REQUIREMENTS The Creditor / Seller name on the installment sales contract must precisely match the name of the dealer as reflected on the Installment Sellers License. Example: Seller Name John Smith, Inc. John Smith, Inc. Unacceptable Name on the Contract John Smith John Smith, Inc. John Smith Inc Smith Ford Smith, Inc. John Smith, Inc. Smith Ford John Smith, Inc. dba Smith Ford John Smith Ford Seller Name John Smith, Inc. dba Smith Ford Acceptable Name on the Contract John Smith, Inc. dba Smith Ford Michigan Dealers may receive an approval from the State of Michigan to use a name on an installment sales contract other than the name reflected on the Installment Sellers License. If so, this “Approved Contract Name” will be reflected in the Active Dealer List under the “Approved Contract Name” column. Validate the Creditor/Seller name against the Active Dealer list – updated daily Follow the steps below to check if the name is valid: Compare the Dealer Name AND the DBA name (including the letters “DBA”) OR the DP Short Name on the active dealer list with the Creditor / Seller name disclosed on the contract, Ensure either the Dealer Name AND DBA name, OR the DP Short Name exactly match the seller name on the installment sales contract. Follow the steps below if the Creditor / Seller name on contract does not match the name in the validation source exactly: When the Creditor/Seller name on the contract is missing: request a new contract from the dealer. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 29 When the Creditor/Seller name does not exactly match the dealer name as described above: Send a correction letter identifying the correct dealer name Contact the dealer to see if they have been approved by MI to use a name other than name reflected on the Installment Sellers License when the Creditor/Seller name is on the contract: If the dealer is approved to use a different dealer name we need a copy of the approval letter from the state. If the dealer is not approved to us a different dealer name inform the dealer that we will stop accepting contracts with the incorrect legal or dba name soon and if they use a DMS print their contracts, then they need to fix their DMS to print the exact Dealer Name AND DBA name as reflected on the Installment Sellers License. Educate the dealer that the exact creditor / seller name on the top of the installment sales contract must precisely match the name of the dealer as reflected on the Installment Sellers License, if the Creditor/Seller name is cut off at the top of the contract, but is complete at the bottom of the contract. ADDITIONAL INFORMATION Frequently Asked Questions Can the dealer send a carbon copy of the contract instead of a new contract? No. The dealer must send a new contract or you send back the original to be filled in by the dealer and returned. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 30 CREDITOR / SELLER NAME POLICY Policy The name of the properly licensed dealer (creditor / seller) must be disclosed on the contract. Reason Required We can only accept contracts from properly licensed Dealers enrolled in the Credit Acceptance program. POLICY REQUIREMENTS The Creditor / Seller name on the contract must match the legal name of the dealer (or any name the dealer is authorized to do business as) exactly in ACS. Example: Legal name John Smith, Inc. DBA Name Smith Ford Smith Mercury Acceptable Name on the Contract John Smith, Inc. Smith Ford Smith Mercury Unacceptable Name on the Contract - Smith Ford Mercury Smith Ford Smith Mercury Smith Ford/Smith Mercury - Smith Ford of Southfield Standard abbreviations are acceptable in the Creditor/Seller name. Validate the Creditor/Seller name against the Active Dealer list – updated daily. Follow the steps below to check if the name is valid: Compare the legal name and/or dba name on the active dealer list with the Creditor / Seller name disclosed on the contract, Ensure the legal name or the dba name match the name Credit Acceptance has on file exactly. Follow the steps below if the Creditor / Seller name on contract does not match the name in the validation source exactly: Request a new contract from the dealer when the Creditor/Seller name on the contract is missing. Contact the dealer to see if they are enrolled under a different dealer name when the Creditor/Seller name on the contract does not match either the legal name of the dealer or the dealer’s dba name as reflected in the active dealer list exactly. If the dealer is enrolled under a different dealer name we need a copy of their current license that matches the name on the contract. If the dealer is not enrolled under a different dealer name inform the dealer that we will stop accepting contracts with the incorrect legal or dba name soon and if they use DMS, then they need to fix their DMS to print the exact legal or dba name that we have on file. Educate the dealer that the exact creditor / seller name on the top of the installment sales contract must precisely match the name of the dealer as reflected on the Installment Sellers License: If the Creditor/Seller name is cut off at the top of the contract, but is complete at the bottom of the contract we will accept it. If the inaccurate Creditor/Seller name is crossed out on the contract and the correct name is written in, but is initialed by the customer we will accept the contract. If the inaccurate Creditor/Seller name is crossed out on the contract and the correct name is written in, but is not initialed by the customer request a new contract. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 31 ADDITIONAL INFORMATION Frequently Asked Questions Can the dealer send a carbon copy of the contract instead of a new contract? No. The dealer must send a new contract or you send back the original to be filled in by the dealer, initialed by the customer, and returned. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 32 CREDITOR / SELLER ADDRESS POLICY Policy The address of the properly licensed dealer (creditor / seller) must be disclosed on the contract. Reason Required We can only accept contracts from properly licensed Dealers enrolled in the Credit Acceptance program. POLICY REQUIREMENTS The Creditor / Seller address on the contract must be the street address for the dealer’s licensed location. The Creditor / Seller address on the contract cannot be a P.O. Box. Standard abbreviations are acceptable in the Creditor/Seller address. Validate the Creditor/Seller address against the: Active Dealer list – updated daily. Follow the steps below to check if the address is valid: Compare the address 1/address 2 (columns E & F) on the active dealer list with the Creditor / Seller address disclosed on the contract, Ensure the Creditor / Seller street address on the contract matches the address Credit Acceptance has on file. Follow the steps below if the Creditor / Seller address on contract does not match the address in the validation source: Request a new contract from the dealer when the Creditor/Seller address on the contract: Is missing or Substantially inaccurate. Request a correction letter when the Creditor / Seller address on the contract: is a P.O. Box, but matches supporting deal documents. ADDITIONAL INFORMATION Frequently Asked Questions Can the dealer send a carbon copy of the contract instead of a new contract? No. The dealer must send a new contract or you send back the original to be filled in by the dealer and returned. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 33 CREDIT APPLICATION POLICY Policy The Credit Application authorizes Credit Acceptance to use all of the information contained to communicate with the customer about their account status and any debt collection. A properly completed Credit Application must be submitted for each customer. The credit application must be signed and dated properly by each customer. The state of Nevada has a Credit Application specific to its state. All other states must use the Credit Acceptance Credit Application. POLICY REQUIREMENTS The Credit Application authorizes Credit Acceptance to use all of the information contained to communicate with the customer about their account status and any debt collection. A properly completed Credit Application must be submitted for each customer. The credit application should be completed in its entirety, if applicable. The signature and date section must be completed on the credit application. The date on the credit application must be on or before the contract date. The signature on the contract must match the signature on the credit application. If the signature is missing or does not match the other documents the request a new credit application. If the date is missing or is after the contract date then educate the dealer on this issue, document ACS and continue with funding the contract. If the social security number is not correct on the credit application then verify that the supporting documents in the loan package contain the correct social security number, document ACS and educate the dealer. ADDITIONAL INFORMATION Frequently Asked Questions What do I do if the maker and/or co maker’s name is missing or inaccurate on the Credit Application? If the maker and/or co maker’s name is missing on the Credit Application we need a copy of the form with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the Credit Application matches the signature on all of the other documents in the account package we can accept the form. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the Credit Application with the maker and/or co maker’s name listed correctly. Where can the dealer obtain a credit application? The dealer can obtain a credit application via CAPS (the form will print with the account package). Common Pitfalls Not educating the dealer about a missing date on the credit application. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 34 CONSENT & AUTHORIZATION FORM POLICY Policy The Consent & Authorization Form provides authorization to third parties to provide Credit Acceptance with any of the customer’s employment and/or credit information. The Consent & Authorization Form also provides authorization to Credit Acceptance to share the customer’s performance information with the selling dealer. A properly completed consent & authorization form must be submitted for each customer. POLICY REQUIREMENTS The Consent & Authorization Form authorizes Credit Acceptance to obtain and use any of the customer’s employment and/or credit information. A properly completed consent & authorization form must be submitted for each customer. The following fields are required to be completed for funding: Signature Print/Type Name The following fields are optional provided this information is available in supporting account documentation: Social Security Number Date of Birth If a required field is missing / inaccurate then hold funding for the correct information. If an optional field is inaccurate then hold funding for the correct information. If an optional field is missing then proceed if the information is on a supporting account document. ADDITIONAL INFORMATION Frequently Asked Questions What do I do if the maker and/or co maker’s name is missing or inaccurate on the consent & authorization form? If the maker and/or co maker’s name is missing on the consent & authorization form we need a copy of the form with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the consent & authorization form matches the signature on all of the other documents in the account package we can accept the form. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the form with the maker and/or co maker’s name listed correctly. Where can the dealer obtain a consent & authorization form? The dealer can obtain a consent & authorization form via CAPS (the form will print with the account package). Common Pitfalls Holding the loan for optional information that can be found in a supporting loan document. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 35 CREDIT REPORT AUTHORIZATION FORM POLICY Policy The Credit Report Authorization Form provides consent from the customer to the dealer and Credit Acceptance to obtain the customer’s credit report from any Credit Reporting Agency and complete an investigation of their credit. A properly completed Credit Report Authorization form must be submitted for each customer. POLICY REQUIREMENTS The Credit Report Authorization Form authorizes the dealer and Credit Acceptance to obtain the customer’s credit report from any Credit Reporting Agency and complete an investigation of their credit. A properly completed Credit Report Authorization form must be submitted for each customer. All of the fields are required to be completed for funding. If a required field is missing / inaccurate then hold funding for the correct information. ADDITIONAL INFORMATION Frequently Asked Questions What do I do if the maker and/or co maker’s name is missing or inaccurate on the credit report authorization form? If the maker and/or co maker’s name is missing on the credit report authorization form we need a copy of the form with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the credit report authorization form matches the signature on all of the other documents in the account package we can accept the form. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the form with the maker and/or co maker’s name listed correctly. Where can the dealer obtain a Credit Report Authorization form? The dealer can obtain a Credit Report Authorization form via CAPS (the form will print with the deal package) and in the Funding Booklets. Common Pitfalls Not holding the account for required information. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 36 DECLARATION ACKNOWLEDGING ELECTRONIC SIGNATURE POLICY Policy A fully executed Declaration Acknowledging Electronic Signature Process Form (“Electronic Signature Declaration Form”) must be submitted with all retail installment sales contracts (“RISCs”) executed using an electronic signature process. POLICY REQUIREMENTS The buyer(s) and seller must each sign and date their respective portions of the Electronic Signature Declaration Form. The following fields on the Electronic Signature Declaration Form are required for funding and should be completed as described below: Field(s) Information Required Buyer, Co-Buyer, and Creditor-Seller Name and Address Each of these fields should match the name and address information on the RISC Vehicle Information (year and make, model and body style, color, VIN) Each of these fields should match the vehicle information on the RISC If the buyer or seller’s signatures are missing, hold funding for a fully executed copy of the form. ADDITIONAL INFORMATION Frequently Asked Questions Is a faxed copy of the completed Electronic Signature Declaration Form acceptable? Yes. We will accept a faxed version of the completed form. Dealers should maintain the original in their deal jacket. Can the DSC take a verbal confirmation from the Customer that they signed the Electronic Signature Declaration Form? No. Even if during the verification call the customer confirms they had control and signed the documents, the Electronic Signature Declaration Form is still required. Is it acceptable to have multiple Electronic Signature Declaration Forms? Yes. It is acceptable if the dealer, driver and 2nd signer each submit separate forms. Version History Version Date 1 12/08/2014 Description Initial Version uploaded to Published Docs Library THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. Author J Lum 5.13.2013/v.1 CAPS Funding Guidelines Page 37 PENNSYLVANIA OPTIONAL PRODUCTS DISCLOSURE FORM POLICY A properly executed Pennsylvania Optional Products Disclosure Form (“Pennsylvania Disclosure Form”) must be submitted with all Pennsylvania retail installment sales contracts (“RISCs”) if the customer purchases an optional product such as a vehicle service contract. Policy POLICY REQUIREMENTS The Pennsylvania Disclosure Form informs buyers that purchasing optional products (often referred to as ancillary products) is voluntary and not required as a condition of receiving financing. On RISCs where the buyer has elected to purchase an optional product, dealers must present the Pennsylvania Disclosure Form to the buyer (and co-buyer, if applicable) before the buyer/co-buyer signs the RISC. The following fields on the Pennsylvania Disclosure Form are required for funding and should be completed as described below: Field(s) Information Required Buyer, Co-Buyer, and Creditor-Seller Name and Address Each of these fields should match the name and address information on the RISC Vehicle Information (year and make, model and body style, color, VIN, odometer reading) Each of these fields should match the vehicle information on the RISC Service Contract Agreement (GAP) The appropriate box or boxes associated with the optional products purchased should be checked and Date Debt Cancellation The date should be populated as the contract date If the required fields are not selected, hold funding and request the appropriate information as follows: If any of the information populated on the Pennsylvania Disclosure Form does not match the information listed on the RISC, hold funding and request a new Pennsylvania Disclosure Form that contains the correct information. If the buyer and/or co-buyer’s signature is missing, hold funding for a fully executed copy of the form. If the incorrect ancillary product is selected (or no ancillary product is selected), hold funding for a completed form in which the appropriate box or boxes are selected. ADDITIONAL INFORMATION Frequently Asked Questions What do I do if the buyer and/or co-buyer’s name is missing or inaccurate? If the buyer and/or co-buyer’s name is missing or inaccurate (a completely different name), request a copy of the Pennsylvania Disclosure Form with the buyer and/or co-buyer’s name properly listed. If the buyer and/or co-buyer’s name is misspelled but the signature on the Pennsylvania Disclosure Form matches the signature on all of the other documents in the account package we will accept the form. Version History Version Date Description Author 1 12/15/2014 The Company formerly required customers to sign a broad disclosure acknowledging, among other things, that purchasing an optional ancillary product is voluntary and not required as a condition of financing. The Company has elected to break this disclosure out into a separate document to better align with state law requirements. J Lum THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 38 NOTICE TO CO SIGNER FORM POLICY Policy The cosigner refers to a person, other than the principal borrower, who signs for a loan. The cosigner assumes equal liability for the loan. The Notice to Cosigner Form discloses the cosigner’s liability for the debt obligation incurred by the debtor. A properly executed Notice to Cosigner (Multi-State or State Specific) form should be submitted for each loan that has a cosigner. The following states have a Notice to Cosigner form that is specific to their state: IA, NY, PA, SC, and TX. POLICY REQUIREMENTS A properly executed Notice to Cosigner (Multi-State or State Specific) form should be submitted for each loan that has a cosigner. The following fields are required for funding and should be completed as described below: If the field is… Then the form should reflect… Name of Creditor Name of Debtor Date of Debt Identification of Debt to be Cosigned Today’s Date Signature of Cosigner Name of the Dealership Name of the Maker Contract Date Total of Payments On or before the contract date Signature of Cosigner If a required field is missing / inaccurate then hold funding for the correct information. If the Total of Payments is a higher amount (>$10) then a new cosigner form is required. If the Total of Payments is a lower amount a new cosigner form is not required. ADDITIONAL INFORMATION Frequently Asked Questions What do I do if the maker and/or co maker’s name is missing or inaccurate on the notice to cosigner form? If the maker and/or co maker’s name is missing on the notice to cosigner form we need a copy of the form with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the notice to cosigner form matches the signature on all of the other documents in the account package we can accept the form. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the form with the maker and/or co maker’s name listed correctly. Where can the dealer obtain a notice to co-signer form? The dealer can obtain a notice to cosigner form on CAPS, TOM and in the Funding Booklets. Common Pitfalls Holding the loan for a new cosigner form when the Total of Payments changes to a lower amount. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 39 DISCLOSURE FORM POLICY Policy The purpose of the disclosure form is to obtain the Maker and Co-Maker’s acknowledgement of the following as they relate to their account: o That they have read and received a copy of the Retail Installment Contract, o That the “cash price” as set forth in the contract is the price negotiated with the dealer and is the price they would pay if paying in cash, o That the Annual Percentage Rate (APR) is negotiable o That Credit Acceptance will service the account and all payments must be made to Credit Acceptance, o That Credit Acceptance will pay the dealer a portion of the amount owed under the terms of the Retail Installment Contract, and the dealer may retain a portion o The dealer’s agreement with Credit Acceptance does not affect the amount of their obligation under the terms of the Retail Installment Contract, o The purchase of any ancillary product such as, a service contract, extended warranty, or GAP product is optional, and not required to purchase the vehicle on credit, and o That enrolling in an electronic payment program is optional. A properly executed Disclosure Form is required for all Purchase and Portfolio program accounts. POLICY REQUIREMENTS The following fields are required for funding and should be completed as described below: If the field is… ____________ (Buyer) ____________ (Co-signer) ____________ (hereinafter referred to as “Car Dealership”) Then the form should reflect… Maker’s Name Co-Maker’s Name Authorized name of the dealership or DBA Buyer Signature Maker’s Signature Co-signer Signature Co-Maker’s Signature Dated Car Dealership By ITS Dated On or before the contract date Authorized name of the dealership or DBA Dealer Signature Title of dealer who signed disclosure On or before the contract date If the field is missing or inaccurate… See FAQ below See FAQ below Hold for correct information Obtain a form with the maker’s signature. Obtain a form with the co maker’s signature. Obtain a dated form. Hold for correct information Hold for correct information Hold for correct information Obtain a dated form Note: A faxed copy of this form with accurate information is acceptable. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 40 ADDITIONAL INFORMATION Frequently Asked Questions What do I do if the maker and/or co maker’s name is missing or inaccurate on the Disclosure form? If the maker and/or co maker’s name is missing on the disclosure form we need a copy of the form with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the disclosure form matches all of the other documents in the account package we can accept the form. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the form with the maker and/or co maker’s name listed correctly. Where can the dealer obtain a disclosure form? The dealer can obtain a disclosure form on CAPS, TOM and in the Funding Booklets. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 41 ORIGINATIONS – DOWN PAYMENT / TRADE IN POLICY Policy The total down payment equals the cash down payment plus the net trade in value, if any. The down payment (cash and trade) must be accurately disclosed on the retail installment contract. Down payment amounts affect the risk associated with contract and can change the advance amount. POLICY REQUIREMENTS The total down payment equals the cash down payment plus the net trade in value, if any. Ensure the down payment meets the following guidelines: o o If the customer rating is between 1-3, then the down payment must be 10% of the cash price If the customer rating is between 4-10, then the down payment must be 15% of the cash price Acceptable forms of down payment: o o o Cash and/or Check (cannot be post-dated) Money Order Trade in (Only Actual Cash Value can be used as the down payment) Any titled motorized vehicle (for road use only) can be traded in. The full down payment (cash down payment plus the trade in value, if any) must be received on or before the date the customer executes the retail installment contract and receives delivery of the vehicle. If the amount of trade-in is disclosed, but not the description, send a correction letter disclosing the tradein vehicle. ADDITIONAL INFORMATION Frequently Asked Questions Where is the down payment calculation disclosed on the contract? The down payment calculation is disclosed under the Itemization of Amount Financed. Where is the trade in information disclosed on the contract? The trade-in disclosure is shown under the Itemization of Amount Financed. Vehicle description (make and model) Gross Trade-in amount How do I document a payoff on the contract? In this case a payoff is referring to when the dealer partner is paying off an outstanding balance on a car loan that is being used as a trade in on a new Credit Acceptance account. In the case of a payoff, the name of the party to whom the payoff is made and the amount should also be disclosed in both the down payment calculation section (the section number varies by state) and the Itemization of Amount Financed section. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Common Pitfalls Page 42 Can customers trade in two vehicles? Yes. The customer can trade in multiple vehicles. All vehicles traded in must be disclosed on the Retail Installment Contract. Can customers trade in motorcycles? Yes. The customer can trade in any titled motorized vehicle (for road use only). Can customers use a credit card to make a portion of or all of their down payment? No. Credit card payments are not acceptable forms of down payment. Can the dealer use Refund Anticipation Loans (RAL) as down payments? Yes. Dealers may use a RAL for a down payment. As with any of our contracts, the dealer must obtain the down payment (here, the proceeds from an RAL) before or on the same date that the customer executes the retail installment contract and receives delivery of the vehicle. Can the customer trade in a vehicle they still owe a balance on to another lender? Yes. The trade information needs to be disclosed accurately on the contract. The Actual Cash Value of the vehicle minus the payoff for the trade cannot result in negative equity. Related Documents Customer Verification Policy THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 43 ILLINOIS ERT (ELECTRONIC REGISTRATION AND TITLING) FEE DISCLOSURE FORM POLICY Policy The Illinois ERT (Electronic Registration and Titling) program allows participating vendors to charge customers a fee for the optional service of electronically processing their vehicle titling and registration and for providing registration plates or stickers. The maximum ERT (Electronic Registration and Titling) fee amount is $25. The fee must be included as part of the cash price of the vehicle, and not itemized separately on the retail installment contract. A properly executed Illinois ERT fee Disclosure form must be submitted for each loan where the dealer financed the optional ERT (Electronic Registration and Titling) fee on the contract. POLICY REQUIREMENTS The Illinois ERT (Electronic Registration and Titling) program allows participating vendors to charge customers a fee for the optional service of electronically processing their vehicle titling and registration and for providing registration plates or stickers. The maximum ERT (Electronic Registration and Titling) fee amount is $25. The ERT (Electronic Registration and Titling) fee must be included in the cash price. The cash price is disclosed on Line 1 of the Itemization of Amount Financed on the contract. The following fields are required for funding and should be completed as described below: If the field is… Then the form should reflect… Date of Retail Installment Contract Vehicle Information No. Optional Electronic Fee Amount $ Buyer’s Signature, dated Buyer’s Signature, dated Contract Date VIN of the vehicle ERT fee that is less than or equal to $25 Maker Signature and contract date Co-maker Signature and contract date The following fields are optional provided this information is available in supporting loan documentation: If the field is… Then the form should reflect… Buyer Buyer Seller Vehicle Year Vehicle Make and Model Maker’s name Co-maker’s name Dealership name Year the vehicle was manufactured Make and model If the dealer fails to submit the form and the ERT fee is charged then hold funding for the form. If a required field is missing / inaccurate then hold funding for the correct information. If an optional field is inaccurate then hold funding for the correct information. If an optional field is missing then proceed if the information is on a supporting loan document and educate the dealer on the proper way to complete the form. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 44 ADDITIONAL INFORMATION Frequently Asked Questions What do I do if the maker and/or co maker’s name is missing or inaccurate on the Illinois (ERT) Fee Disclosure form? If the maker and/or co maker’s name is missing on the Illinois ERT Fee Disclosure form we need a copy of the form with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the Illinois ERT Fee Disclosure form matches the signature on all of the other documents in the account package we can accept the form. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the form with the maker and/or co maker’s name listed correctly. Where can the dealer obtain an Illinois ERT (Electronic Registration and Titling) Fee Disclosure form? The dealer can obtain a disclosure form on CAPS, TOM and in the Funding Booklets. Common Pitfalls Not holding the loan for the correct information if the required field is inaccurate. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 45 HEAD OF FAMILY GARNISHMENT WAIVER (FL) POLICY Policy ‘Head of family’ is typically the person who is providing more than one-half of the support for a child or other dependent. This garnishment waiver allows Credit Acceptance to obtain judgment against the customer in case of default. A properly executed Head of Family Garnishment Waiver must be submitted for each buyer who resides in Florida and is the head of the family. POLICY REQUIREMENTS ‘Head of family’ is typically the person who is providing more than one-half of the support for a child or other dependent. A properly executed Head of Family Garnishment Waiver must be submitted for each buyer who resides in Florida and is the head of the family. The following fields are required for funding and should be completed as described below: If the field is… Then the form should reflect… By (Signature of Head of Family) Printed Name (Print or Type Name of Head of Family) Signature of customer Printed or Typed name of the customer If the dealer fails to submit the form, then hold funding for the form. If a required field is missing / inaccurate then hold funding for the correct information. ADDITIONAL INFORMATION Frequently Asked Questions What do I do if the maker and/or co maker’s name is missing or inaccurate on the Head of Family Garnishment Waiver (FL) form? If the maker and/or co maker’s name is missing on the Head of Family Garnishment Waiver (FL) form we need a copy of the form with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the Head of Family Garnishment Waiver (FL) form matches the signature on all of the other documents in the account package we can accept the form. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the form with the maker and/or co maker’s name listed correctly. Where can the dealer obtain a Head of Family Garnishment Waiver (FL)? The dealer can obtain a disclosure form in CAPS. Common Pitfalls Not holding the loan for the correct information if the required field is inaccurate. Holding for this form if the buyer does not reside in Florida. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 46 KANSAS VERIFICATION OF DELIVERY & RECEIPT OF TITLE FORM POLICY Policy The Kansas Verification of Delivery & Receipt of Title Form allows the customer to acknowledge receipt of the certificate of title from the dealer at the time of vehicle delivery. The state of Kansas requires that the customer acknowledge receipt of certificate of title from the dealer at the time of vehicle delivery. A properly completed Kansas Verification of Delivery & Receipt of Title Form must be submitted for each account originated in the state of Kansas. POLICY REQUIREMENTS The Kansas Verification of Delivery & Receipt of Title Form must be received with all of the required fields accurately completed in order for the Company to accept assignment of the contract (“list the deal”). The Kansas Verification of Delivery & Receipt of Title Form must be signed by at least one of the buyer(s) (buyer or co-buyer). The Kansas Verification of Delivery & Receipt of Title Form must be dated. If there is no signature on the Kansas Verification of Delivery & Receipt of Title Form do not list the deal until receipt of a form that is properly dated and has at least one signature from the buyer or the co-buyer. If the date is missing on the Kansas Verification of Delivery & Receipt of Title Form then do not list the deal until receipt of a dated copy of the form that has the date initialed by the buyer or co-buyer to confirm that they received title from the dealer on the date indicated. If the dealer fails to submit the Kansas Verification of Delivery & Receipt of Title Form then do not list the deal. ADDITIONAL INFORMATION Frequently Asked Questions What do I do if the maker and/or co maker’s name is missing or inaccurate on the Kansas Verification of Delivery & Receipt of Title Form? If the maker and/or co maker’s name is missing or misspelled but the signature on the Kansas Verification of Delivery & Receipt of Title Form matches the signature on all of the other documents in the account package we can accept the form. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the form with the maker and/or co maker’s name listed correctly. Where can the dealer obtain a Kansas Verification of Delivery & Receipt of Title Form? The dealer can obtain a Kansas Verification of Delivery & Receipt of Title Form via CAPS (the form will print with the deal package). Common Pitfalls Listing a deal where there is a missing date on the Kansas Verification of Delivery & Receipt of Title Form. Listing a deal where a signed and dated copy of the Kansas Verification of Delivery & Receipt of Title Form has not been received. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 47 MISSOURI DECLARATION OF DELIVERY & RECEIPT OF TITLE FORM POLICY Policy The Missouri Declaration of Delivery & Receipt of Title Form allows the customer to acknowledge receipt of the certificate of title from the dealer at the time of vehicle delivery. The state of Missouri requires that the customer acknowledge receipt of certificate of title from the dealer at the time of vehicle delivery. A properly completed Missouri Declaration of Delivery & Receipt of Title Form must be submitted for each account originated in the state of Missouri. POLICY REQUIREMENTS The Missouri Declaration of Delivery & Receipt of Title must be received with all of the fields complete in order for the Company to accept assignment of the contract (“list the deal”). If a required field is incomplete / inaccurate then do not list the deal until the Company receives correct and accurate information. The Missouri Declaration of Delivery & Receipt of Title form must be signed by at least one of the buyer(s) (buyer or co-buyer). The Missouri Declaration of Delivery & Receipt of Title form must be dated. If there is no signature on the Missouri Declaration of Delivery & Receipt of Title Form do not list the deal until receipt of a form that is properly dated and has at least one signature from the buyer or the co-buyer. If the date is missing on the Missouri Declaration of Delivery & Receipt of Title Form then do not list the deal until receipt of a dated copy of the form that has the date initialed by the buyer or co-buyer to confirm that they received title from the dealer on the date indicated. If the dealer fails to submit the Missouri Declaration of Delivery & Receipt of Title form then do not list the deal. ADDITIONAL INFORMATION Frequently Asked Questions What do I do if the maker and/or co maker’s name is missing or inaccurate on the Missouri Declaration of Delivery & Receipt of Title form? If the maker and/or co maker’s name is missing on the Missouri Declaration of Delivery & Receipt of Title form we need a copy of the form with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the Missouri Declaration of Delivery & Receipt of Title form matches the signature on all of the other documents in the account package we can accept the form. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the form with the maker and/or co maker’s name listed correctly. Where can the dealer obtain a Missouri Declaration of Delivery & Receipt of Title Form? The dealer can obtain a Missouri Declaration of Delivery & Receipt of Title form via CAPS (the form will print with the deal package). Common Pitfalls Listing a deal where there is a missing date on the Missouri Declaration of Delivery & Receipt of Title form. Listing a deal where a signed and dated copy of the Missouri Declaration of Delivery & Receipt of Title form has not been received. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 48 NEVADA AGREEMENT TO ARBITRATE FORM POLICY Policy The agreement to arbitrate is an agreement between the customer and the Seller (Dealer) and/or Seller’s assignee (including, without limitation, Credit Acceptance) to resolve any disputes in front of one or more neutral persons, instead of having a trial in court in front of a judge and/or jury. Credit Acceptance requires that all contracts be subject to arbitration. Nevada’s state mandated contract does not include an arbitration clause which is why this form is required on all Nevada contracts. A properly executed Nevada Agreement to Arbitrate form should be submitted for each account originated in the state of Nevada. POLICY REQUIREMENTS The Nevada Agreement to Arbitrate form must be signed by the buyer(s). The Nevada Agreement to Arbitrate form must be dated on or before the contract date. If the dealer fails to submit the Nevada Agreement to Arbitrate form then hold funding for the form. If the buyer and/or co-buyer’s signature is missing then hold funding for a signed copy of the Nevada Agreement to Arbitrate. If the date is missing or is after the contract date then educate the dealer on this issue, document ACS and continue with funding the contract. ADDITIONAL INFORMATION Frequently Asked Questions What do I do if the maker and/or co maker’s name is missing or inaccurate on the Nevada Agreement to Arbitrate form? If the maker and/or co maker’s name is missing on the Nevada Agreement to Arbitrate form we need a copy of the form with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the Nevada Agreement to Arbitrate form matches the signature on all of the other documents in the account package we can accept the form. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the form with the maker and/or co maker’s name listed correctly. Where can the dealer obtain a Nevada Agreement to Arbitrate Form? The dealer can obtain a Nevada Agreement to Arbitrate form via CAPS (the form will print with the deal package). Common Pitfalls Not educating the dealer about a missing date on the Nevada Agreement to Arbitrate form. Not holding for a signed copy of the Nevada Agreement to Arbitrate form. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 49 NEVADA COMMUNICATION AUTHORIZATION CONSENT FORM POLICY Policy The Nevada Communication Authorization Consent Form provides consent from the customer to Credit Acceptance to use email address(es) and cellular telephone number(s) provided on the form to communicate with them for any purpose, including but not limited to communication regarding their account activity, status, or to collect any debt obligation. A properly completed Nevada Communication Authorization Consent Form must be submitted for each account originated in the state of Nevada. POLICY REQUIREMENTS A properly completed Nevada Communication Authorization Consent Form must be submitted for each account originated in the state of Nevada. The Nevada Communication Authorization Consent form must be signed by the buyer(s). The Nevada Communication Authorization Consent form must be dated on or before the contract date. If the dealer fails to submit the Nevada Communication Authorization Consent form then hold funding for the form until the form is received. If the buyer and/or co-buyer’s signature is missing then hold funding for a signed copy of the Nevada Communication Authorization Consent. If the date is missing or is after the contract date then educate the dealer on this issue, document ACS and continue with funding the contract. ADDITIONAL INFORMATION Frequently Asked Questions What do I do if the maker and/or co maker’s name is missing or inaccurate on the Nevada Communication Authorization Consent form? If the maker and/or co maker’s name is missing on the Nevada Communication Authorization Consent form we need a copy of the form with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the Nevada Communication Authorization Consent form matches the signature on all of the other documents in the account package we can accept the form. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the form with the maker and/or co maker’s name listed correctly. Where can the dealer obtain a Nevada Communication Authorization Consent Form? The dealer can obtain a Nevada Communication Authorization Consent form via CAPS (the form will print with the deal package). Common Pitfalls Not educating the dealer about a missing date on the Nevada Communication Authorization Consent form. Not holding for a signed copy of the Nevada Communication Authorization Consent form. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2014 Credit Acceptance Corporation. All Rights Reserved. 5.6.2014/v.1 CAPS Funding Guidelines Page 50 ARKANSAS WAIVER OF PURCHASER’S RIGHT TO SUE – ARBITRATION AGREEMENT POLICY While Credit Acceptance recommends that all contracts be subject to arbitration, Arkansas law requires that a consumer voluntarily agree to sign a “Waiver of Purchaser’s Right to Sue” (an “Arkansas Waiver”) for a consumer’s arbitration election to be valid. A consumer who refuses to sign an Arkansas Waiver may not be denied the right to purchase the vehicle at the price negotiated with the dealer. A properly executed Arkansas Waiver may be submitted for each account originated in the State of Arkansas, but is not required. Policy POLICY REQUIREMENTS Arkansas law allows a consumer to knowingly and voluntarily agree to submit to binding arbitration only by signing an Arkansas Waiver. The document contains a written waiver specifically acknowledging the consumer relinquishes the right to resolve disputes in a court of law. Credit Acceptance will hold a deal for funding until a properly completed copy of the Arkansas Waiver is received in each of the following circumstances: The consumer signed the Arkansas Waiver, but the dealer failed to include the form in the contract package. There is both a buyer and co-buyer on the account, but only one has signed the Arkansas Waiver. All buyers must sign the form. The buyer and/or co-buyer’s name is missing on the Arkansas Waiver. A copy of the document with the buyer and/or co-buyer’s name is required. The buyer and/or co-buyer’s name is inaccurate (a completely different name). A copy of the Arkansas Waiver with the name(s) listed correctly is required. If the buyer and/or co-buyer refuse to sign the Arkansas Waiver, fund the deal since the document is not required. ADDITIONAL INFORMATION Frequently Asked Questions What if the dealer fails to submit the Arkansas Waiver? Call the dealer to determine if the buyer(s) signed the form and the dealer failed to include the form in the contract package, or if the consumer refused to sign the form. If the dealer failed to include the form, hold the deal for funding. If the consumer refused to sign the form, fund the deal since the form is not required. What if the buyer and/or co-buyer’s name is misspelled? If the buyer and/or co-buyer’s name is misspelled, but the signature on the Arkansas Waiver matches the signature on all of the other documents in the contract package, we will accept the form. Where may the dealer obtain an Arkansas Waiver? The Arkansas Waiver is available via CAPS (the form will print with the contract package). THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2014 Credit Acceptance Corporation. All Rights Reserved. 5.6.2014/v.1 CAPS Funding Guidelines Page 51 PRE-DELIVERY SERVICE FEE (FL) POLICY Policy Reason Required The pre-delivery service fee represents charges for items such as inspecting, cleaning, and adjusting vehicles and preparing documents related to sale. The pre-delivery service fee is different from the documentation fees. Documentation fees are not permissible in Florida. This Florida Motor Vehicle Retail Sales Finance Act allows Florida dealers to charge a Pre-delivery Service fee. POLICY REQUIREMENTS The pre-delivery service fee must be included in the cash price of the vehicle disclosed on Line 1 of the Itemization of Amount Financed section of the contract. The pre-delivery service fee cannot be itemized on the retail installment contract. The pre-delivery service fee must be itemized separately on the Buyer’s Order or Purchase Document (with proper disclosure). The required disclosure states: “This charge represents costs and profits to the dealer for items such as inspecting, cleaning, and adjusting vehicles, and preparing documents related to the sale.” If the contract discloses pre-delivery service fee on Line 5K and the buyer’s order has the correct disclosure then send a correction letter correcting the disclosures of pre-delivery service fee and the cash price – the cash price should be raised by the amount equal to the pre-delivery service fee. If the contract discloses a documentation fee on Line 5K and the buyer’s order discloses the fee as a documentation fee with no disclosure then: Rework the financial numbers as a documentation fee is not permitted in Florida, and Send a correction letter reflecting the changes. If the cash price on the contract has pre-delivery fee rolled into cash price and there is no buyer’s order then hold funding for a buyer’s order with the correct disclosure. Note: The pre-delivery service fee cannot be charged without a buyer’s order with the correct disclosure. If the cash price on the contract has an unidentified fee rolled into the cash price and the buyer’s order discloses the fee as anything other than a pre-delivery service fee then proceed with funding and educate the dealer as to how the pre-delivery service fee should be disclosed. ADDITIONAL INFORMATION Frequently Asked Questions How should I proceed in ACS when the Cash Price violation populates due to the pre-delivery service fee being included in the cash price? When entering the cash price is ACS remove any pre-delivery service fee and enter the pre-delivery service fee into the ‘other’ field in ACS. The cash price in ACS should not be inclusive of the pre-delivery service fee. Separating pre-delivery service fees from the cash price with eliminate the violation in ACS. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2014 Credit Acceptance Corporation. All Rights Reserved. 5.6.2014/v.1 CAPS Funding Guidelines Page 52 DOCUMENTARY STAMP TAX (FL) POLICY Policy The documentary stamp tax is levied on documents that transfer interest in Florida real property. Reason Required The documentary stamp tax amount and the certificate of Registration number must be disclosed on the contract per Florida law. Correct disclosure of this information is required as Credit Acceptance could incur liability if the information is not properly disclosed. POLICY REQUIREMENTS The documentary stamp tax must be disclosed on two places on the contract: On Line 5H in the Itemization of Amount Financed section: Government Documentary Stamp Tax………………………….$____________________ In the section titled – Documentary Stamp Tax: Florida Documentary Tax required by law in the amount of $__________has been paid or will be paid directly to the Department of Revenue. Certificate of Registration No.__________________________ If the amount of the documentary tax is not disclosed and the registration number in the documentary stamp tax section, but includes the amount of tax on line 5H then proceed with funding and educate the dealer on the correct way to disclose the documentary stamp tax. If the amount of the documentary stamp tax is missing from Line 5H, but is included in the ‘Documentary Stamp Tax’ section then choose from the following: If the amount of the documentary stamp tax is not included in the amount financed on Line 7, proceed with funding and educate the dealer that he needs to include the documentary stamp tax in the amount financed. If the amount of the documentary stamp tax is included in the amount financed on Line 7, proceed with funding and send a correction letter disclosing the amount of the documentary stamp tax. Use the amount from the documentary stamp tax section. If the documentary stamp tax is missing, but is disclosed on Line 5H then proceed with funding and educate the dealer about the correct way to disclose the documentary stamp tax. ADDITIONAL INFORMATION Frequently Asked Questions How do I proceed if the documentary stamp tax is missing, but is disclosed in the itemization section of the contract? Proceed with funding and educate the dealer about the correct way to disclose the documentary stamp tax. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2014 Credit Acceptance Corporation. All Rights Reserved. 5.6.2014/v.1 CAPS Funding Guidelines Page 53 VERMONT DISCLOSURE FORM B-28 (VT) POLICY Policy The Vermont Disclosure form informs customers, among other things, of the impact of adding negative equity to a motor vehicle retail installment contract. A properly executed Vermont Disclosure Form B-28 must be submitted for each buyer who resides in Vermont. POLICY REQUIREMENTS The Vermont Disclosure form informs customers, among other things, of the impact of adding negative equity to a motor vehicle retail installment contract. A properly executed Vermont Disclosure Form B-28 must be submitted for each buyer who resides in Vermont. The Vermont Disclosure Form B-28 must be signed by the buyer(s) at the time the buyer(s) sign the motor vehicle retail installment contract (RISC). The following fields are required for funding and should be completed as described below: If the field is… Then the form should reflect… Name of Buyer / Date Customer’s name and must be dated the same as the RISC date Must match the information on the RISC Should always be ‘checked’ positive Must match the information on the RISC Signature of all buyers and dates the same as the RISC date Authorized name of dealership on file with Credit Acceptance Trade In Information Equity Box Cash Price, Amount financed and % Buyer and Co-Buyer Signature and Date Name of Dealership If any of the information contained on the Vermont Disclosure Form B-28 does not match the information listed on the retail installment contract (i.e., Trade In Information, Cash Price, Amount Financed, %, Dates, Authorized name of dealership, etc.) then hold funding and request a new Vermont Disclosure Form B-28 that contains the correct information. If the buyer and/or co-buyer’s signature is missing then hold funding for a signed copy of the Vermont Disclosure Form. If the equity box is checked negative then hold funding and request a new Vermont Disclosure Form B-28 that contains the correct information. ADDITIONAL INFORMATION Frequently Asked Questions What do I do if the maker and/or co maker’s name is missing or inaccurate on the Vermont Disclosure form? If the maker and/or co maker’s name is missing on the Vermont Disclosure form we need a copy of the form with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the Vermont Disclosure form matches the signature on all of the other documents in the account package we can accept the form. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the form with the maker and/or co maker’s name listed correctly. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 54 Can the dealer finance a contract with negative equity? No. Credit Acceptance does not finance vehicles with negative equity. The disclosure is still required in connection with every motor vehicle retail installment contract financed in Vermont. Common Pitfalls Funding the deal with a Vermont Disclosure Form B-28 with inaccurate information. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 55 FAIR LENDING POLICY Policy The Company treats all of its consumers consistently and prohibits team members and dealers enrolled in its program (“Dealers”) from directly or indirectly discriminating against credit applicants and customers on the basis of their race, color, religion, national origin, marital status, sexual orientation, military status, age, sex, childbearing potential, disability or familial status or the receipt of public assistance. POLICY REQUIREMENTS In support of this policy, the Company: 1. 2. 3. Aligns Dealer compensation and a consumer’s desire to buy affordable and reliable transportation; Conducts fair lending training for its team members and Dealers; Set a fixed interest rate in each state (the “Fixed Interest Rate”) of 23.99% or the amount permitted by applicable law, whichever is lower, that cannot be raised, and can be lowered only where: a. b. c. d. The Dealer has completed Fair Lending Training; The Dealer has certified that it has a Fair Lending Compliance Program in place and trained its employees to comply with that program; The Dealer appointed a Fair Lending Compliance Program Coordinator (“Program Coordinator”); and One of the following legitimate business reasons exists and is documented in CAPS: i. ii. iii. iv. v. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. To compete with an offer made to the customer by another dealer; To compete with an offer made to the customer by another finance company; To satisfy the customer’s monthly payment constraints; As a promotional offer because the customer signed up for AutoPay; or Dealer’s business strategy includes consistently offering a flat rate to all customer’s lower than Credit Acceptance’s fixed interest rate. Reviews major policies and procedures for fair lending compliance; Reviews proprietary credit scoring models for fair lending compliance; Reviews with Corporate Legal marketing strategies directed to any protected class applicants or minority communities, if such a strategy were ever proposed; Conducts fair lending audits and reviews; Conducts fair lending statistical analyses; Takes appropriate corrective action or other steps to mitigate risk if it learns of fair lending violations or risks; Has procedures in place, as set forth in the Consumer Complaint Policy, to respond to complaints alleging discrimination; Addresses fair lending issues with its Compliance Committee; Notifies, directly or indirectly, an applicant of action taken on the applicant’s request for credit, whether favorable or adverse, within 30 days after receiving a completed application; Preserves all written or recorded information connected with an application for 25 months after the date upon which the customer is informed of action taken on the application; and Maintains a New York Fair Lending Plan. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 56 ADDITIONAL INFORMATION General: Frequently Asked Questions What conduct violates this policy? By way of example, the following conduct would violate this policy: Discrimination in any aspect of your dealings with the applicant related to an application for credit, including what information you require from the applicant, terms of credit you set, and your standards of creditworthiness; Making any statement to applicants or prospective applicants (like in advertising) that would discourage, on a prohibited basis, a reasonable person from making or pursuing an application; Asking an applicant about his or her capacity to have children, or his or her use or advocacy of any form of birth control or family planning; Refusing to consider sources of an applicant’s income or to subject an applicant’s income to discounting because of the applicant’s protected status; Requiring the applicant to disclose information about a spouse or former spouse where the spouse will not be contractually liable on the account, it is not a community property state, the applicant is not relying upon the spouse’s income or alimony, child support or separate maintenance; Discriminating against a married person because she doesn’t use and is not known by the surname of her spouse; Evaluating the credit worthiness of an applicant by aggregating statistics or assumptions relating to the applicant’s protected status; and Discriminating against an applicant because of his or her exercise, in good faith, of any right under the federal consumer Credit Protection Act. This list of examples is not exhaustive. If a team member or Dealer were to engage in any of the above-listed conduct, he would be subject to disciplinary action, up to and including termination. In contrast, team members and Dealers may make decisions based upon factually supportable, objective differences in a consumer’s overall credit worthiness (e.g., current income, assets and prior credit history of such consumer). How does the Company align the consumer’s desire to buy affordable and reliable transportation and dealer compensation? Under its Portfolio and Collections Only Programs, Dealer compensation is directly tied to the customer’s performance under the contract. This incentivizes the Dealer to sell quality vehicles to, and set affordable payments for, customers. Also, the Credit Acceptance business model allows all contracts originated by a dealer and assigned to Credit Acceptance to be accepted for servicing, collection and administration. As such, no contract made in compliance with applicable laws and regulations is rejected by Credit Acceptance. How does the Company inform its dealers of their fair lending requirements? The Company informs its dealers of their fair lending obligations in the Dealer Agreement and through this policy, training, CAPS® reminders, reporting, audits, and enforcing the consequences for non-compliance (including termination). THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 57 Who receives fair lending training? The Company provides fair lending training to its team members and Dealers. The Company takes this approach because the risk of unfair lending practices runs throughout the account lifecycle. How does the Company review its policies and procedures for fair lending compliance? As described in our Document Compliance Policy and the related DMP Workflow Process, all policies and procedures undergo a compliance review prior to publication in the Published Document Library. This compliance review includes a fair lending compliance review. How does the Company monitor for compliance with this policy? The Company monitors both dealer and portfolio variations in interest rate in an effort to identify violations of this policy. The Company’s internal audit department will also evaluate the Company’s compliance with this policy. If a Dealer or team member were to violate this policy, how will the Company address the violation? The Company will take immediate corrective action and remediate where necessary. Corrective action includes, but is not limited to: account remediation, training and/or disciplinary action (up to and including termination). How does our application process (the application built into CAPS® and the multistate credit application (the “Application)) help Credit Acceptance and Dealers comply with The Equal Credit Opportunity Act (“ECOA”)? Regulation B permits creditors to ask for any information in connection with a credit transaction so long as they avoid specific prohibited bases of discrimination and certain types of information that often relates to discrimination on a prohibited basis. CAPS® and the Application help you collect non-prohibited information. For example, the multistate credit application informs the applicant that he or she may disclose alimony, child support, and separate maintenance only if the applicant wishes to have it considered as a basis for repaying the obligation and requests spouse information only where permitted. CAPS® and the Application do not seek information regarding the applicant’s race, sex, religion, sexual orientation or national origin; and does not ask whether there is telephone listing in the name of the applicant. Also, by having an applicant complete the Application, we know that the Dealer had a proper purpose to pull the customer’s credit. See Fair Credit Reporting Act Policy. Fixed Interest Rates: If state law requires an interest rate lower than the Fixed Interest Rate due to the age of the vehicle, will the dealer need to manually lower the interest rate in CAPS®? No, the Dealer does not need to worry about lowering the rate to comply with state law – CAPS® is programed automatically to do so. For example, if state law requires a lower interest rate due to the age of the vehicle, CAPS® will automatically adjust the rate. Notifying Customers of Actions Taken on an Application for Credit: How is an application submitted through CAPS®? Credit Acceptance does not receive applications for credit directly from consumers. A Dealer seeking to obtain financing on behalf of a consumer will submit a credit application to Credit Acceptance using CAPS®. We approve 100% of credit applications submitted. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 58 Do we receive applications using a method other than CAPS®? Yes, in November of 2013, Credit Acceptance initiated a very limited pilot program to a small number of dealers to submit a credit application to Credit Acceptance using the Dealertrack system. When using the Dealertrack system, a Dealer is able to communicate specific credit terms relating to the consumer on whose behalf the application is submitted. Under ECOA, does a creditor need to provide notice of its credit decision? Yes, a creditor must notify an applicant of action taken on the application’s request for credit, whether favorable or adverse, within 30 days after receiving a completed application. For example, you must provide a notice of approval within 30 days. To satisfy that requirement, the Company requires Dealers to present to the customer the Customer Approval Sheet, reflecting the applicant’s approval of an approval for credit. How is a consumer who seeks credit through CAPS® notified of our decision on his application for credit? When processing a credit application in CAPS®, the system presents to the Dealer what we refer to as a Customer Approval Sheet, a document to be presented to consumers that reflects an approval for credit. See Sample Customer Approval Sheet. Credit Acceptance trains dealers to deliver the Customer Approval Sheet to each credit applicant. Delivery of the Customer Approval Sheet satisfies the notice of approval requirement of ECOA and Reg. B. What actions must a Dealer take under ECOA when it makes a credit decision related to Credit Acceptance’s Program? ECOA also requires creditors to take certain actions: (1) when credit is denied or revoked; (2) when there is a change in terms of an existing credit arrangement; (3) when there is a refusal to grant credit in substantially the amount or on substantially the terms requested by the consumer; and (4) incomplete or withdrawn applications. As to the first requirement, Credit Acceptance does not deny or revoke credit. Under our program, 100% of credit applications are approved. So, no action is needed. Under the second requirement, Credit Acceptance does not change the terms of an existing credit arrangement and, thus, no action is required by the Dealer or the Company. As to the third, when using CAPS®, the specific terms requested by the consumer are not submitted to Credit Acceptance. As a result, there is not a refusal to grant credit on the terms requested by the consumer. This means that when a dealer submits a credit application to Credit Acceptance directly through CAPS®, neither the dealer nor Credit Acceptance need to send a notice under those circumstances. For a transaction using DealerTrack, see the next question. As to the fourth, if a Dealer receives an incomplete or withdrawn application, the Dealer must comply with ECOA’s notice requirements. The Dealer may want to reach out to its attorney to get more information on how to comply. If a Dealer submits a deal using DealerTrack, does Credit Acceptance ever take an adverse action? Yes, under certain circumstances described below, Credit Acceptance may take an adverse action against a customer who submits an application through DealerTrack. When using DealerTrack, Credit Acceptance also approves the customer. However, the terms of the approval we communicate back to the Dealer may be different than the credit terms submitted with the credit application. While an approval is communicated to the THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 59 Dealer 100% of the time, under ECOA and Reg. B the terms of the approval may be construed as a counteroffer to the terms initially presented. Reg. B requires an adverse action notice when a counteroffer is not accepted. As a result, Credit Acceptance will deliver an adverse action notice to any credit applicant who is the subject of a credit application submitted to Credit Acceptance by a Dealer using the Dealertrack system, where that credit application does not result in a Contract assigned to Credit Acceptance within 21 days of the date the application was submitted. Credit Acceptance uses Reg. B Model Form C-5 for this purpose. What information must be communicated to the consumer in an adverse action notice? A notification of adverse action must be in writing and must contain certain information including: the name and address of the creditor; the nature of the action that was taken; the identity of the federal agency responsible for enforcing compliance with the act for that creditor; and the specific principal reason for the action taken or disclose that the applicant has the right to request the reason(s) for denial within 60 days of receipt of the creditor’s notification, along with the name, address, and telephone number of the person who can provide the specific reason(s) for the adverse action. The reason may be given orally if the creditor also advises the applicant of the right to obtain the reason in writing upon request. The creditor must notify an applicant of adverse action within 90 days after making a counteroffer unless the applicant accepts or uses the credit during that time. Document Retention: What information does Credit Acceptance retain from the application process? For a period of 25 months or more after we notify an applicant of the action taken on a credit application, we retain the following information: the information recorded during the application process; the CAPS® Application Date, which is the date Credit Acceptance receives the application for credit; the Action Date; the action taken; and, in cases where an adverse action notice is required (the Dealertrack counteroffer scenario), the specific reasons for adverse action. Because the credit application information is entered into a computerized system, and the credit decision is determined in CAPS®, Credit Acceptance stores and retains the above information entered into CAPS® in an electronic format, as allowed pursuant to the Official Staff Interpretations relating to 12 C.F.R. § 1002.12(b) of Reg. B. In addition, Credit Acceptance retains an electronic image the adverse action notice sent to consumers. Policy Name Consumer Complaint Policy Related Documents Policies New York Fair Lending Plan Processes Process Name Fair Lending Policy – Enforcement Process Relationship To This Policy Describes how you to escalate a complaint related to a service provider and the Company’s complaint monitoring process Describes the Company’s fair lending plan for the State of New York, which compliments this policy. Description of the Process Describes how the Company monitors Dealers’ conduct for compliance with this policy. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 60 Version History Version Date Description Author 1 6/16/14 E Kerber 2 3/13/15 2.1 5/6/15 The Fair Lending Policy is a revision of the Fair Lending Plan. As a revision to the Fair Lending Plan, the Company also separately published the New York Fair Lending Plan. Updated effective date identifying additional states that were impacted by section 3 of the policy. Updated section 3 of the policy to include the Fixed Interest Rate of 23.99%, or the amount permitted by applicable state law. This amount cannot be raised or lowered. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. E Kerber E Kerber 5.13.2013/v.1 CAPS Funding Guidelines Page 61 NEW YORK FAIR LENDING PLAN As reflected in its Fair Lending Policy, Credit Acceptance Corporation (“Credit Acceptance”) is committed to providing financial services to consumers on an equal basis. It is Credit Acceptance’s policy to treat all of its consumers consistently and in compliance with fair lending laws. The purpose of which is to prevent unlawful discriminatory practices in relation to its activities and to ensure compliance with all applicable federal and state laws, including but not limited to the federal Equal Credit Opportunity Act ("ECOA"), the Federal Reserve Board's Regulation B, and applicable state fair lending laws, including New York Executive Law §296-a. Policy POLICY REQUIREMENTS STRUCTURAL ORGANIZATION Credit Acceptance’s commitment to fair lending is reflected in its belief in the shared responsibility for compliance with fair lending laws at every level of the organization. It is the responsibility of the Board of Directors and senior management to formulate the Plan and ensure that the lending practices of the Lender comply with its provisions. The Compliance Committee is responsible for the institution's compliance with Executive Law §296-a. Credit Acceptance’s Senior Management is responsible for ensuring that Credit Acceptance’s business practices comply with this Fair Lending Plan in the following ways: Communicating Credit Acceptance’s fair lending policies to the applicable business unit management. Allocating, on an ongoing basis, sufficient resources to ensure the successful implementation of this Plan. Obtaining input and guidance from the Corporate Legal Department on significant business decisions that have potential fair lending impact. Monitoring results and recommending corrective action where necessary. MONITORING Credit Acceptance implements monitoring processes that review the practices of the Company as a whole as well its various departments, and individuals within the departments. Credit Acceptance’s monitoring program focuses on detecting deficiencies and ensuring the Credit Acceptance’s personnel understand their duties and responsibilities, including those related to this fair lending plan. TRAINING Credit Acceptance conducts training for all new and current employees whose job responsibilities would require them to understand the principles set forth in this policy. Training for such employees includes correctly and adequately describing prohibited bases under the ECOA, Regulation B, and applicable state laws, including but not limited to the federal Equal Credit Opportunity Act ("ECOA"), the Federal Reserve Board's Regulation B, and applicable state fair lending laws, including New York Executive Law §296-a. Credit Acceptance will require such employees to sign a written Fair Lending Policy Acknowledgment Form that states such employees agrees to uphold all of the applicable federal and state laws, including, but not limited to the federal Equal Credit Opportunity Act ("ECOA"), the Federal Reserve Board's THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 6.16.2014/v.1 CAPS Funding Guidelines Page 62 Regulation B, and applicable state fair lending laws, including New York Executive Law §296-a. Credit Acceptance has a program, semi-annual or as necessary, for such employees to receive applicable laws and regulations updates. REVIEW OF REJECTED OR WITHDRAWN APPLICATIONS Credit Acceptance provides to our network of nationwide participating car dealers the ability to deliver credit approvals to every consumer. As a result, we have no automatic higher level supervisor review of rejected or withdrawn applications because such applications do not exist. FAIR LENDING POLICY AND LOAN PROCESS Credit Acceptance is aware that the risk of unfair lending practices runs throughout the account lifecycle. Credit Acceptance is committed to implementing training and policies that protect against discriminatory practices at every point of the account lifecycle, from application to the account being paid in full, and to taking immediate corrective action should fair lending discrimination occur. This plan’s principles of fair lending also apply during the collection and repossession process, and Credit Acceptance is committed to implementing policies, procedures, employee training, and management oversight to ensure equitable treatment of all consumers. Because Credit Acceptance does not refinance accounts, this provision does not extend to that activity. If fair lending deficiencies are observed or appear in an employee’s job evaluation, the employee will receive additional training or counseling in an effort to correct the deficiency. If the deficiency persists, the employee will be subject to more severe action, including termination. UNDERWRITING AND PRICING Credit Acceptance does not qualify consumers for “alternative loan products” or refer consumers to an affiliated lender. Credit Acceptance is a nationwide motor vehicle dealer services company, providing motor vehicle dealers with servicing and collection services on retail installment sales contracts (referred to herein as “Contract”) originated by such motor vehicle dealer. The Credit Acceptance business model allows all Contracts originated by a dealer and assigned to Credit Acceptance to be accepted for servicing, collection and administration. As such, no Contract made in compliance with applicable laws and regulations is rejected by Credit Acceptance. All Contracts accepted are then eligible to receive an advance on collections. Advance guidelines are established by the Funding Policy Committee through written policy and procedure in order to promote and ensure consistency throughout all classes of applicants. These guidelines address all aspects of the advance process, including collateral standards, credit, income, source of funds, debt ratios, income documentation and other factors relevant to the underwriting decision. Credit Acceptance does not utilize rate sheets and does not set the interest rate at which the originating motor vehicle dealer will originate the Contract. As such, there is no “buy rate” or “sell rate” in the conduct of the Company’s business. Credit Acceptance Corporation places a cap on the maximum interest rate charged on a Contract in accordance with applicable state law. RELATIONSHIPS WITH THIRD PARTIES Credit Acceptance’s commitment to complying with fair lending laws extends to its relationships with originating motor vehicle dealers. All contracts establishing a relationship between Credit Acceptance Corporation and an originating motor vehicle dealer shall contain a provision under which the originating motor vehicle dealer acknowledges and agrees to abide by applicable fair lending laws, including but not limited to the federal ECOA, the Federal Reserve Board's Regulation B, and applicable state fair lending THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 6.16.2014/v.1 CAPS Funding Guidelines Page 63 laws, including New York Executive Law §296-a. That said, Credit Acceptance requires New York dealers with whom it does business to certify that they acknowledge their responsibility to comply with Executive Law §296-a and the policies and procedures contained in this Plan (to the extent that they are applicable) in an addendum to the Dealer Servicing Agreement. At this time, Credit Acceptance does not have a relationship with any other finance company. COMPLAINTS As outlined in Credit Acceptance’s Consumer Complaint Policy, Credit Acceptance responds to consumer inquiries, concerns, and complaints in a timely, fair, and consistent manner. Complaints submitted to the Company wherein a failure to adhere to the policy described herein is alleged shall be referred to the Corporate Legal Department for investigation and resolution. MARKETING At this time, Credit Acceptance does not engage in marketing direct to consumers. Notwithstanding, the Corporate Legal Department reviews and must approve, prior to distribution, all marketing strategies. Should marketing strategies directed towards any protected class be developed, such strategies shall be reviewed and approved to ensure compliance with fair lending laws. PERIODIC REVIEW The Chief Legal Officer and senior management periodically reviews this Plan to ensure that it is current. ADDITIONAL INFORMATION Related Documents Fair Lending Policy Version History Version Date Description Author 1 6/12/14 Initial Version uploaded to the Published Docs Library. Prior versions were available in the former Operations Manuals. J Justin THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 6.16.2014/v.1 CAPS Funding Guidelines Page 64 RESIDENCE FUNDING STANDARD Credit Acceptance requires dealers to provide the following residence information for consumers (driver and 2 signer): nd 1. The Company will require each consumer on the application to provide the following: The physical address of each consumer’s current residence The consumer’s mailing address, if it differs from the physical address The consumer’s length of time at the current residence The owner of the consumer’s residence (if the owner is a relative or landlord, we require their name and telephone number). 2. The Company may require proof of the consumer’s physical address. If the dealer requests an Advance, Credit Acceptance also requires the following documents to prove each consumer's physical address. These documents are referred to as “Proof of Residence”. Proof of Residence Credit Acceptance accepts the following Proofs of Residence: What is an acceptable Proof of Residence? Mortgage Statements Bank/Financial Statements (monthly) Credit Card Statements Phone, Cable or Internet Bill Lease/Rental Agreement SSI/SSA Award Letters 401k/Investment Statements Gas, Electric, Water or Garbage Bill (Final utility bills are unacceptable. Disconnect notices require verification that service will remain connected.) All documents must include the consumer’s name, physical address matching the physical address on the application and be issued within 45 days of the contract date. Credit Acceptance will accept the following documents to establish Proof of Residence in the special circumstances listed below: Native American Reservation: A printed map and one of the following are required: What if there are special circumstances related to the physical residence? Tribal letter (with validation that phone number or web address on letter ties to the reservation) 911 letter Tribe utility bill Landline verification with consumer at residence Parent’s Residence: Applies to consumers under age 24 who reside with parents: Residence proof in parent’s name, matching current address on bureau and one piece of junk mail Rural Area: A printed map and one of the following are required: 911 letter Landline verification with consumer at residence Bureau support Quarterly Bank/Financial Statements: We accept the most recent statement and a current bank printout showing address. Military Employees: Standard proof is required unless the Military Housing Authority verifies consumer lives on base. Lease/Rental Agreement: Most recent agreement with a landlord verification. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2015 Credit Acceptance Corporation. All Rights Reserved. 5.6.2015/v.1 CAPS Funding Guidelines When is Proof of Residence Waived? Page 65 The Company will waive Proof of Residence in the following scenarios: Vehicle with an active GPS/SID device prior to funding If the contract payment is less than 25% of the drivers income, proof of residence for the 2nd signer is not required. If an acceptable Proof of Residence document cannot be provided, one item from each column in the table below can be provided in lieu of acceptable documentary proof. However, this will result in a non-negotiable $250 advance reduction: One Item From Each List Must Be Provided What if the consumer does not have an acceptable document? Outbound landline verification with consumer at address Most recent address matches bureau Any bill not listed above as “acceptable” within 45 days of contract And Driver’s license (or State ID) with current address Acceptable document issued 45 days to 90 days from the contract Two pieces of mail issued within 45 days of contract. Examples include, but not limited to: What documents are unacceptable? Insurance statements Junk mail Any bank printout that is not the actual bank statement Pay stubs Internet screenshots Mail sent to a PO Box without a service address Related Documents Policy Directly Associated with Standards Residence Policy Job Aid Directly Associated with Standards Other Related Documents Version History Version Date Description 1 6/16/13 2 5/6/15 Initial Version (Residence Policy – Proofs and Residence Information Policy) uploaded to the Published Docs Library. Prior versions were available in former Operations Manuals. The Residence Policy documents preexisting processes consolidated from the Residence Policy – Proofs, and the Residence Information Policy. The prior policies are being retired from the Published Documents Library. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2015 Credit Acceptance Corporation. All Rights Reserved. Author J Lum J Lum 5.6.2015/v.1 CAPS Funding Guidelines Page 66 RESIDENCE POLICY - HOUSING TYPE Policy ‘Housing Type’ is the type of residence the customer lives in. The appropriate housing type information is required for each account. Housing type information can provide our collectors with the ability to obtain contact with our customer. Housing type helps to determine the risk of the account. POLICY REQUIREMENTS Ensure the correct categorization of ‘housing type’ is selected for the driver (maker) and 2nd signer (co-maker). Determine who owns the residence to establish one of the following ‘housing types’: Self or Spouse - Means: Residence is owned by the customer or the spouse, with or without a mortgage or a land contract. - We Need: No proof required. Landlord - Means: Residence is owned by an unrelated third party (e.g., apt. complex). - We Need: Landlord’s first and last name and phone number. Relative - Means: Residence is owned by the customer’s relative. - We Need: Relative’s first and last name and phone number. Military - Means: Residence is owned by the Military. (customer lives on military base) - We Need: Military proof of income. ADDITIONAL INFORMATION Frequently Asked Questions 2nd signer (co-maker) resides at a different address; do we require their housing info? nd Yes. Housing type information is required for both the Driver and 2 signer. What is a land contract? Land contracts (real estate contracts) are a contract used for purchasing a home with an individual rather than a financial institution. The housing type for customers that have a land contract is ‘Self or Spouse’. What is ‘Rent to Own’? ‘Rent to Own’ means the customer is renting from a landlord with the option to buy at a later date. The housing type for customers that are renting to own should be ‘Landlord’. Pitfalls Not holding for the landlord’s complete name or not correcting the spelling of the landlord’s name. Related Documents Residence Policy – Proofs Residence Information Policy THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 67 PHONE POLICY Policy The Company requires the driver and 2 nd signer to have at least one phone number each. POLICY REQUIREMENTS If the driver and 2 a landline. Ensure the driver and 2 nd signer share the same phone number we must confirm that the phone number is nd signer’s contact numbers are in the appropriate field in CAPS: Primary # - Driver / 2 Secondary # - Driver / 2 nd Signer’s Landline or Cell Phone Number. nd Signer’s Landline or Cell Phone Number. Phone # - Third – Party contact number or a third contact number for the driver 2nd Signer. nd Typically a phone number to a friend or relative where the driver / 2 signer can be reached. nd Ensure the driver and 2 signer’s proven phone information is updated in the appropriate system: If the account is in ‘CP’ station or ‘AH’ station, update CAPS. If the account is in ‘CC’ station, update Artiva. ADDITIONAL INFORMATION Frequently Asked Questions What about customers who do not have a landline phone or a cell phone? An exception can be made if the customer can receive phone calls at their place of employment. The customer must have access to the phone during the entire work shift. nd Can the driver and 2 signer share a landline phone number? nd Yes. The driver and 2 signer can share a landline phone number. nd Can the driver and 2 signer share a cell phone number? nd No. The driver and 2 signer cannot share a cell phone number. Exceptions can be made nd in rare situations where the maker and 2 signer are both on fixed income and live at the same residence. The credit analyst must note the reason for making the exception. Why do we want the driver and 2nd signer to provide at least one number each? We require a phone number for each customer in order to contact them in the event of nonpayment. Common Pitfalls Not entering phone information into CAPS when it is furnished. Related Policies Employer Information Policy Employment Verification Policy Customer Verification Policy Version History Version Date Description Author 1 6/12/14 Initial Version uploaded to the Published Docs Library. J Lum THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 10.1.2013/v.2 CAPS Funding Guidelines Page 68 INCOME POLICY – EMPLOYMENT TYPE Policy Credit Acceptance categorizes income into different ‘employment types.’ The appropriate employment type must be selected for each customer. The employment type affects the risk of the contract. POLICY REQUIREMENTS Ensure the correct employment type is selected for the driver (maker) and 2nd signer (co-maker). Employee (Gets W-2) – Works full or part time directly for an employer (excludes Temporary Service employees), receives pay stubs or income proofs showing FICA tax deductions. Examples: Wal-Mart employee. Self-Employed (No W-2) – Pays own taxes (1099 employee). Example: Jim, owner of Jim’s Roofing (includes business owners and independent contractors). Fixed Income (Net) – Receives a steady stream of income without tax deductions. Example: Alimony, retirement, pension, or social security recipient. Temp Service Employee – Works through staffing or placement agency and reports to a third party employer. Example: Sharon works through Kelly Services for EDS. Unemployed – Receives unemployment benefits or a person receiving no income. Example: Housewife. Cash Income – Receives income in cash. Example: Waitress or Taxi driver. ADDITIONAL INFORMATION Frequently Asked Questions What is the correct employment type for someone receiving Short Term Disability? If receiving these payments from the primary Employer and FICA taxes are being taken out, income type = Employee (Gets W2); If receiving from an Insurance Company, income type = Fixed Income (Net). What is the correct employment type for an ITIN customer who is Self-Employed? Categorize as ‘Self-Employed (No W-2)’ and provide income proofs to support their selfemployed status. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 10.1.2013/v.2 CAPS Funding Guidelines Page 69 What is the correct employment type for an ITIN customer who receives paystubs? Categorize as ‘Cash Income’ and provide a job letter. ITIN customers are not authorized to work in the U.S. as a W-2 employee and are considered Cash Income customers. What is the correct employment type for a customer who receives foster care income? Categorize as ‘self-employed (no W-2)’. These customers typically receive 1099s at the end of the year. However, if FICA taxes taken out categorize the customer as ‘employee (gets W-2)’. What if the customer is an employee of the dealership? Categorize appropriately based on the above types. However, the dealer principal or general manager must submit a signed approval on dealer letterhead approving the transaction (or they can sign the CAPS Congratulations printout indicating their approval of the funding amount). If the dealer principal or general manager is seeking to personally finance the purchase of a vehicle through Credit Acceptance, the account must be processed as Collection Only. Common Pitfalls Related Documents What is the correct employment type for a customer who receives Per Capita Income? Categorize as ‘self-employed (no W-2)’. These customers typically receive 1099s at the end of the year. Categorizing an ITIN customer as ‘employee (gets W-2)’. Not categorizing business owners or independent contractors as self-employed regardless of how they get paid (W-2/no W-2). Funding dealer employees without ensuring the appropriate dealer approval is received. Failing to change the employment type to ‘unemployed’ when income proof cannot be provided. Income Policy – Proofs Income Policy – Calculation Employer Information Policy ITIN Customer Policy THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 10.1.2013/v.2 CAPS Funding Guidelines Page 70 INCOME POLICY - PROOFS Policy Proof of Income (primary/secondary) is documentation proving that the customer earns one or more income streams. Additional documentation may be required until frequency and consistency of the income amount claimed is determined. Reason Required The income amount and employment type also affect the risk of the contract. Correct income inputs ensure integrity of data used to create future advance structures. POLICY REQUIREMENTS Employee (Gets W-2) / Temp Service Employee / Unemployed: (ENTERED AS GROSS AMOUNT) The following items must be in customer’s name and dated within 30 days of contract. o Pay stubs from payroll service showing specific tax deductions. o Payroll summaries or detail sheets if they contain YTD totals (for major companies only). o Handwritten pay stubs showing tax deductions supported by cancelled checks. o Direct deposits on bank statement/printout (if we can determine type, frequency, and consistency of income). Note: This amount is the NET pay. Fixed Income (Net): (ENTERED AS NET AMOUNT) The following items must be in customer’s name: o Social Security 1099, benefits letter, or check. o Direct deposits on a bank statement or printout. o Child Support / alimony payment history in the form of an agency printout, cancelled checks, or direct deposits that proves the frequency and consistency of the income. Notes: If this is paid directly to a debit card, we accept a statement proving the deposit. Supplemental Social Security - Proof must be dated within 30 days of contract. Representative Payee income is allowed ONLY if the Rep Payee and the Beneficiary are both on the deal and the title. Retirement / Pension/ Social Security & Social Security Disability -Proof must be dated within 12 months of the contract date. Cash Income (ENTERED AS GROSS AMOUNT) Job letter is required and must include: o Company Letterhead o Time at job (hire date) o Average weekly pay o Average weekly hours Self-Employed (No W-2): (ENTERED AS GROSS AMOUNT) Acceptable proofs (in customer’s name): o Bank statements or printouts (two months current/consecutive) o Cancelled checks (two months current/consecutive) o 1099 paystubs dated within 30 days of contract o Settlement statements dated within 30 days of contract If proofs received are in a business name, then we require documentation proving the customer’s percentage of ownership in the business. See table for documents that often work for proving ownership: THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 10.1.2013/v.2 CAPS Funding Guidelines Page 71 Proof of Ownership Bank statement in customer name showing DBA or LLC Business Type Sole Proprietor/DBA Single Member LLC Multi-member LLC/LLP S Corporation Business bank statement mailed to customer Residence x x x x IRS Tax Form 1040 Schedule C Business Registration Documents or Articles of Org./Incorp. x x x x IRS Form SS-4 showing Sole Member IRS Tax Form 1065 K-1 x x IRS Tax Form 1120S K-1 IRS Form 2553 Election by Small Bus. Corp. x x x Cash Income (ENTERED AS GROSS AMOUNT) Job letter is required and must include: o Company Letterhead o Time at job (hire date) o Average weekly pay o Average weekly hours ADDITIONAL INFORMATION Frequently Asked Questions What if the customer provides proof in the name of a company he/she owns? Non-expired DBA or ownership documents in the customer’s name are required. Note: Ownership documents (i.e. Articles of Incorporation or income will be on a schedule C or form 1120S or Form 1120) must show sole ownership. An owner can be an officer and probably is. However, we can’t assume an officer is an owner. Agents are not considered owners. What if payroll sheets or detail summaries do not contain year to date totals? As long as the documents are from a major company (and not from ‘mom and pop’ shops), we can still accept if we have either bureau support or verbal verification of employment. Are documents with blacked out information acceptable as Proof of Income? Yes. If the information blacked out has no bearing on the qualification of the proof. Related Documents Income Policy – Employment Type Income Policy – Calculation Employer Information Policy THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 10.1.2013/v.2 CAPS Funding Guidelines Page 72 EMPLOYER INFORMATION POLICY Policy Information provided on the credit application must be verified for accuracy and completeness. Employer information consists of name, address, phone number, and the job time with the current employer. Accurate employer information maintains deal integrity, ensures the advance is appropriately calculated, and helps collections. POLICY REQUIREMENTS For each employer, the following information must be provided: 1. Name Note: If the customer is self-employed, we need the name of their business or occupation listed in CAPS. 2. Physical Address (city and state) 3. Phone number (to the physical address) 4. Date of hire If the customer is a “temp service or contract” employee, we require both the placement agency information and current assignment information. If the customer is a union employee and the union affiliation is the basis for hire date, we require both the union information and current employer information in CAPS. Ensure the source of new employer information is updated, noted, and explained in the appropriate system: If the account is in the “Contract Processing” or “Advance on Hold” work queues, update CAPS. If the account is in the “Completed Contract” work queue, update Artiva. ADDITIONAL INFORMATION Frequently Asked Questions Do I need to enter an employer name for fixed and unemployment income? Yes. The type of fixed income should be entered in the Employer Name field in CAPS. If the customer is receiving unemployment benefits, the employer name should be entered as “unemployment.” What employer address is required for a W-2 customer whose employer doesn’t have a local office? We will accept the out-of-state employer address for these customers. For example, the Michigan headquarters’ address is sufficient for a Credit Acceptance MAM that works in the field, even though the MAM’s base is out-of-state. Account notes must support your findings. Is an employer address required for a “self-employed (no W-2)” customer? Yes. The only exception is if the customer conducts business from their residence. Is it safe to say that an employer address is not necessary when the employment type is “fixed income (net amt)” or “unemployed”? Yes. The only exception may be when a customer is on workman’s comp and we change it from “employee (gets W-2)” to “fixed income (net amt).” We would want to collect an address if they plan on returning to work. Nonetheless, this is a recommended practice, and not the rule. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 73 Is an employer address required for a “self-employed (no W-2)” customer? Yes. The only exception is if the customer conducts business from their residence. Is it safe to say that an employer address is not necessary when the employment type is “fixed income (net amt)” or “unemployed”? Yes. The only exception may be when a customer is on workman’s comp and we change it from “employee (gets W-2)” to “fixed income (net amt).” We would want to collect an address if they plan on returning to work. Nonetheless, this is a recommended practice, and not the rule. What is the rule for determining job time for military, union, temporary, or temporarily laid off employees? Military job time is calculated from the time the customer is enlisted with the military. Union job time should reflect the customer’s time with the union. Temporary job time should reflect the date the customer was hired by the temporary agency. Temporary layoff job time should reflect the original hire date if verified. What is the rule for determining job time for a permanent employee who was previously a temporary employee at the same company? This customer’s job time is calculated from the time they began working at this company. nd How should I proceed if the following stipulation appears: DRIVER/2 SIGNER nd INCOME HIRE DATE: Driver/2 Signer hire date is after approval creation date, Check the hire date? Check the hire date; it is possible that there was a data entry error. Review the hire date to ensure accuracy. Common Pitfalls Related Documents Not holding for both the temp agency and current assignment info for a “temp service employee.” Holding funding in spite of the information in the deal package. Failing to hold for a “self-employed” customer’s employer address when the customer does not work out of their home. Originations Income Policy – Employment Type Income Policy – Proofs Income Policy – Calculation THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 74 BANK POLICY Credit Acceptance requires documentation that proves a customer has an established checking, savings, and/or prepaid debit card account if claimed. Confirming this information helps maintain deal integrity, ensures the advance is appropriately calculated, and assists with collections. Policy POLICY REQUIREMENTS To be a qualifying proof, the document must meet the following requirements: Be in the customer’s name Dated within 45 days of contract date Prove the account was opened at least 30 days prior to contract date (this requirement does not apply if the bank statement or pay stub shows direct deposit) Show customer has transaction history if statement reflects zero or negative balance (i.e., deposits and withdrawals) The following are acceptable documents: Bank statement / bank printout Voided check with AutoPay (if the account is the same as on the Western Union form) Pay stub showing direct deposit (if bank name is known) Ensure the appropriate system is updated to reflect proven bank information for the following: Bank name for checking and savings accounts Bank or card name for prepaid debit cards Type of account – checking/savings/prepaid debit card (if unknown then assume savings) ADDITIONAL INFORMATION Frequently Asked Questions How can I tell if the account is established? Look for prior account activity and balances. New accounts do not have a balance from the previous month, have little or no activity, show an opening deposit, customer is using starter checks or other documents obtained when opening an account such as a bank agreement. Should I offer AutoPay to a customer who has a new bank account? Yes. Autopay is a great way for the customer to make on-time payments and help establish or re-establish their credit. What should I do if the dealer cannot prove bank information? Uncheck the bank account type in CAPS to rescore the deal before funding. How do we handle Money Market accounts? If someone says they have a money market account we need to establish whether or not they can write checks from it. If they can, we give them credit for checking. If they cannot, we give credit for savings. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2014 Credit Acceptance Corporation. All Rights Reserved. 3.3.2014/v.1 CAPS Funding Guidelines Page 75 Is a transfer to or from an account considered a qualifying proof of a bank account? No. A qualifying proof must be provided to give credit for additional accounts. Are prepaid bank cards acceptable as proof of bank account? Yes, but the account type should be entered as ‘Prepaid Debit Card.’ An exception is if the qualifying proof of bank account provided for the prepaid bank card indicates checking, in which case we will give the customer credit for a ‘checking’ account. Common Pitfalls Related Policies Accepting non-qualifying or fraudulent documents (or documents that do not link to customer). Creating a stipulation for bank info when it has been provided. Originations AutoPay Policy Version History Version Date Description Author 1 6/16/13 J Lum 1.1 11/19/14 The Bank Policy is an existing practice for Analyst that is being documented for the first time. Updated the Policy Requirements, and FAQ’s section of the policy. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2014 Credit Acceptance Corporation. All Rights Reserved. J Lum 3.3.2014/v.1 CAPS Funding Guidelines Page 76 ORIGINATIONS – AUTOPAY POLICY Policy AutoPay is an optional payment program that allows payments to be debited from a checking or savings account. IF a customer chooses to enroll in AutoPay, Credit Acceptance is legally obligated to ensure that we receive the required authorization forms. POLICY REQUIREMENTS If a customer elects Auto Pay, a signed CAPS Automatic Payment Authorization form is required. ADDITIONAL INFORMATION Frequently Asked Questions How do I treat a ‘manual’ Auto Pay form? Alert the customer service team in Henderson to complete the manual enrollment set-up (Hunt Group: 9075). How should we proceed if the dealer says the customer would like to cancel the AutoPay recurring payment arrangement but we have a signed AutoPay authorization form? Advise the dealer to have the customer contact our Customer Service team directly to cancel. When cancellation has been completed, we can close the relevant stipulation by flagging it as an exception: Enrollment Cancelled. (Phone: 800-634-1506 or Fax: 702990-2728) How should we proceed if the dealer says the recurring AutoPay should be canceled because the customer never authorized such an arrangement? If the customer did not sign the AutoPay Authorization form and does not wish to be enrolled in recurring payment arrangements, the DSC Analyst should cancel the AutoPay in CAPS to avoid any compliance issues. How many days past the contractual due date can an AutoPay debit be set up without the customer being considered “late”? An AutoPay debit can be set up 10 days past the contractual due date. For example, if th an account has a due date of the 10 , the furthest the AutoPay debit can be extended is th the 20 of the month. Common Pitfalls Not holding for customer’s signature on AutoPay Authorization form. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2014 Credit Acceptance Corporation. All Rights Reserved. 4.4.2014/v.1 CAPS Funding Guidelines Page 77 REFERENCE POLICY Policy The Company encourages dealers to provide five complete references with unique phone numbers entered into CAPS, or on the Reference document. POLICY REQUIREMENTS A reference is deemed complete if all of the following information is provided: Complete first name and last name. Physical address (including street name, city, and state). Full unique telephone number (a telephone number is deemed ‘full’ even if the area code is missing). This information may enhance collections as follows: It may help locate the vehicle – customers may move to a reference address without notice. References may be contacted to help us locate the customers (references are usually friends, relatives, coworkers, neighbors or acquaintances of the consumer). Telephone numbers and individuals should be different for all references, and should also be different than the customer, employer, or landlord. If you receive references in a fax, the ‘document type’ should be labeled ‘REFERENCES’ in CAPS. ADDITIONAL INFORMATION Frequently Asked Questions What if there is no physical address available? We still prefer a description of where the residence is located, such as cross streets or landmarks. This exception is used in rare cases such as Indian Reservations and Rural Route boxes. Are PO boxes acceptable for an address? Post Office Boxes are not considered a full physical address. PO boxes do not provide collectors with information that will help locate the vehicle. Version History Version Date Description Author 1 6/16/13 The Reference Policy is an existing policy that was added to the document library on 6/16/13. J Lum 2 7/30/14 Revised to explain that the Company will not hold funding on a contract when fewer than 5 complete references are provided. J Lum THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 78 INSURANCE POLICY Policy We require full insurance coverage on every deal with a max comprehensive & collision deductible of $550. Requiring insurance on funded deals is a standard way to ensure our investment is protected. As a lien holder, Credit Acceptance would be entitled to payment from the insurance company in the event the vehicle was written-off or stolen. POLICY REQUIREMENTS Ensure we have the following vehicle insurance information for every deal: Vehicle Insurer Name Vehicle Insurer Phone Number If deductibles are greater than $550, insurance verification is required. We must verify the following information: Vehicle information (must match vehicle on contract) Expiration date (must indicate a current policy) Collision and Comprehensive coverage deductibles (must be $550 or less) Lien holder or loss payee (must be Credit Acceptance) ADDITIONAL INFORMATION Frequently Asked Questions Should I hold the deal if appropriate insurance coverage is not in place? Yes. If the insurance is not current or if the deductibles are too high then we should hold the deal until we can confirm appropriate coverage is in place. Why doesn’t an insurance binder printout suffice in lieu of verbal/online verification? A binder is put in place until a formal insurance policy is accepted or denied. The binder doesn’t confirm that a formal policy has been established. Common Pitfalls Funding deals with insurance coverage deductible amounts that are too high. Incomplete verification of insurance information. Accepting fraudulent documentation for insurance verification. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 79 MILEAGE VALIDATION POLICY Policy Correct mileage should be obtained on all vehicles. The mileage is found on various funding documents. Mileage drives the value of the vehicle and is considered when pricing the account. To comply with Federal and State Odometer Act. Factors into determination of service contract eligibility. POLICY REQUIREMENTS Qualifying proofs: A title application containing an odometer statement, signed by the customer. A DMV receipt indicating the odometer reading submitted at the time of title transfer OR the new title/ lien received from the state that shows an odometer reading. An Odometer Disclosure Statement form, signed by the customer. A Bill of Sale/ Buyer’s Order/ Purchase Order containing an odometer statement, signed by the customer. Front and back of the previous title that contains an odometer disclosure, signed by the customer. The mileage on the qualifying proof supersedes the mileage on the contract, CAPS, and/or ACS. Note: A correction letter is required if mileage on proof differs from the mileage on the contract. If two proofs are submitted with different mileage, select the higher mileage. If changes are made to the mileage in ACS, the warranty screen must be updated for re-approval of service contract eligibility. Artiva must be updated as well. ADDITIONAL INFORMATION Frequently Asked Questions What does it mean if the mileage is ‘in excess of its mechanical limits’ and how do I proceed when this box is checked on the Odometer Disclosure Statement? ‘In excess of its mechanical limits’ means that the vehicle has reached its odometer reading max. This affects older vehicles (typically more than 8-10 years old) that have manual odometers. In those cases, if the vehicle’s mileage reached ‘99,999’, the odometer reading would start back at ‘1’ when the next mile was reached. If this box is checked on the Odometer Disclosure Statement, add ‘100,000’ to the mileage stated on the document. How do I proceed when the qualifying proof indicates the odometer reading is ‘NOT the actual mileage’? Change the mileage to ‘999,998’ in ACS. This affects situations where the odometer was broken or has been replaced – making the True Mileage Unknown (TMU). What should I do if the dealer provides proof indicating the mileage is ‘exempt’? We require proof listing mileage as a numerical value. If the dealer provides proof indicating ‘exempt’, contact the dealer and ask for proof of the vehicle’s actual mileage. For ‘exempt’ vehicles (10+ years old), the dealer is not obligated to furnish actual mileage to the state, but Credit Acceptance still requires it for scoring purposes and service contract eligibility. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 80 The dealer is unable to provide a qualifying proof with actual mileage. What can we do? Change the mileage to ‘999,998’ in ACS. Note- the vehicle will be ineligible for a service contract. What happens if we receive an update on the mileage after the contract review is done? The odometer mileage should be correct at the time of review. If the statement comes in later and the mileage is different, the person who checks in the fax should update ACS and Artiva. Make sure you advise the ancillary team of the change so the service contract provider is made aware of the correct mileage. Common Pitfalls Accepting non-qualifying documents. Adding 100,000 miles when not needed. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 81 ORIGINATIONS GPS SID POLICY Policy A GPS SID unit assists in the company’s collection efforts (the audible payment reminder, i.e., beeping, will begin when an account becomes delinquent and the vehicle’s starter can eventually be disabled if the account remains delinquent). A GPS SID unit assists repossession efforts (GPS is helpful for locating the vehicle for repossession). A GPS SID unit is not required on every account, it is optional. If an optional GPS SID unit is installed on a vehicle, we require a properly completed Buyer Agreement for Installation of a Vehicle Starter Interruption Device and GPS System disclosure form to be signed by the customer. The GPS SID disclosure form acknowledges the customer has read and agreed to the terms of use of an optional GPS SID unit based on the terms listed on the form. The installation of a GPS SID unit can affect the advance amount and adjust the risk associated with the deal therefore it is important to indicate whether or not there is a GPS SID unit on the account. POLICY REQUIREMENTS Only ancillary products from Credit Acceptance approved vendors can be financed on retail installment contracts assigned to Credit Acceptance. Aftermarket theft deterrent devices are not allowed on vehicles that are intended to be financed on retail installment contracts assigned to Credit Acceptance. If the dealer submits a retail installment contract with an aftermarket theft deterrent device from a vendor that is not approved by Credit Acceptance, send the deal back to the dealer. The GPS SID device cannot be installed on a vehicle if the customer resides in a state where GPS is not approved, even if the dealer state is approved. The correct version of the Buyer Agreement for Installation of a Vehicle Starter Interruption Device and GPS System (GPS SID) disclosure form with the customer’s original signature is required prior to funding. The following fields are required on the Buyer Agreement for Installation of a Vehicle Starter Interruption Device and GPS System (GPS SID) disclosure form for funding and should be completed as described below: If the field is… Then the form should reflect… Form Version Date Dealer Name Buyer’s Name(s) Vehicle Description Vehicle Identification Number Product Vendor Device Serial Number Buyer’s Initials Buyer’s Signature Dealer Representative’s Signature Dealer Representative Name State on form matches dealer’s state On or before the Contract Date Same as Installment Contract Same as Installment Contract Same as Installment Contract Same as Installment Contract Select one of the vendors Provided in CAPS once the device is activated No more than 2 missing initials for each buyer Must be signed by buyer(s) Must be signed by dealer’s representative Must document the dealer’s representative name THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 10.1.2013/v.2 CAPS Funding Guidelines Page 82 Follow the steps below if a required field is missing or inaccurate: Request a new GPS SID disclosure form with the customer’s original initials/signatures if the Buyer(s) Initials and/or the Buyer(s) signature are missing. Request a faxed copy of the GPS SID disclosure form if any of the other fields (excluding Buyer’s Initials and Buyer’s Signature) are missing or inaccurate. The changes must be initialed by the customer. If the GPS SID disclosure form is received by fax, ensure the correct form was used and the form was executed completely and accurately. Upon review of disclosure form, verify the GPS SID device is activated with correct ESN (this is equivalent to the Device Serial Number on the GPS SID disclosure form). ADDITIONAL INFORMATION Frequently Asked Questions Where can the dealer obtain a GPS SID disclosure form? The dealer can obtain a GPS SID disclosure form on CAPS (the form will print with the deal package). What is the contact information for Guidepoint? Guidepoint: Phone 1-877-GPS-FIND Website: www.guidepointsystems.com What is the contact information for Sperion (LoanPlus)? Sperion: Phone 1-877-563-0040 Website: http://creditacceptance.loanplusgps.com What is the ESN number and is it required? The ESN is the equivalent of the device serial number attached to the vehicle. It is not required on the disclosure form. If activation is not complete we may have the incorrect ESN number – we can still stip the deal for the correct ESN number in this case. If the ESN number is received directly from the dealer, hold funding for confirmation on activation. What if the device cannot be installed before the vehicle is delivered? We will allow installations after delivery but before funding. Should be on EXCEPTION BASIS ONLY. This is rare and is typically only when the dealer is awaiting delivery of more devices. Advise the dealer to ensure he has the appropriate inventory ahead of time. What if the dealer partner wants to be funded but the activation is incomplete? Ensure the GPS SID indicator is removed in ACS. What do I do if the maker and/or co maker’s name is missing or inaccurate on the GPS SID disclosure form? If the maker and/or co maker’s name is missing on the GPS SID disclosure form we need a copy of the form with the maker and/or co maker’s name listed. If the maker and/or co maker’s name is misspelled but the signature on the GPS SID disclosure form matches the signature on all of the other documents in the account package we can accept the form. If the maker and/or co maker’s name is inaccurate (a completely different name) then we need a copy of the form with the maker and/or co maker’s name listed correctly. Common Pitfalls Not holding the deal for accurate information on the GPS SID disclosure form. Holding for GPS SID disclosure form even when already included in deal package (or received by fax). Funding before installation is verified or complete. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 10.1.2013/v.2 CAPS Funding Guidelines Related Documents Page 83 GPS SID Overview GPS SID Timeline Policy GPS SID Offset Policy THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 10.1.2013/v.2 CAPS Funding Guidelines Page 84 OFAC (OFFICE OF FOREIGN ASSETS CONTROL) POLICY Policy OFAC is the Office of Foreign Assets Control, a division of the U.S. Treasury Department that administers and enforces economic sanctions against targeted foreign countries and individuals. Reason Required It is illegal for any U.S. person, including finance companies, to do business with a person or entity listed on OFAC’s list of Specialty Designated Nationals and Blocked Persons (“SDN List”). If a person named on the SDN list is identified when a contract is submitted, the finance company cannot engage in any business with that person. POLICY REQUIREMENTS Validate the buyer/co-buyer’s name against the OFAC list at: www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf Follow the steps below if the buyer’s name on the contract matches a name on the OFAC list: DO NOT FUND the deal. Reach out to Corporate Legal to see if our customer matches the customer on the OFAC list when: the buyer/co-buyer’s name, address, and date of birth match the OFAC list or the buyer/co-buyer’s name and address match the OFAC list or the buyer/co-buyer’s name and date of birth match the OFAC list Process the contract as normal when: the buyer/co-buyer’s name matches the OFAC list, but the address and date of birth are different . THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 10.1.2013/v.2 CAPS Funding Guidelines Page 85 EMPLOYMENT VERIFICATION POLICY Policy The Dealer Service Center attempts to contact the employer to verify accuracy of information input into CAPS from the original application. Reason Required Accuracy of customer information is critical to collection efforts. Verified information can affect the advance and adjust the risk associated with the deal. POLICY REQUIREMENTS A verification attempt on the driver’s (maker’s) primary employment is required on every contract package. Verification can be performed via phone or fax. A verification attempt on the 2 signer’s (co-maker’s) primary employment is required when: nd The 2 signer’s income is needed to qualify the deal, nd During contract review we determine the 2 signer is driving the vehicle, or nd Questions arise during 2 signer’s income calculation. A Right Party Contact (‘RPC’) consists of talking to someone who can verify the customer’s exact hire date. Cash Income requires the following: Right Party Contact (‘RPC’) with the employer Verification of employer existence Verification of required job letter information (hire date, average weekly pay and hours) Verification of employment type and occupation (waitress, taxi driver, etc.) The relevant systems (CAPS and Artiva) are updated to reflect the information obtained during and after verification: Verification outcome flags are properly updated (RPC, No RPC – No Issues, Not Fundable, No Attempt) When the original employer contact number is bad (disconnected or does not belong to the employer), hold funding until both a valid number and Right Party Contact at this number are obtained. nd ADDITIONAL INFORMATION Frequently Asked Questions The customer is now unemployed. What do I do if the customer was employed at the contract signing? What do I do if the customer was unemployed at the contract signing? If the customer was employed at contract signing, change the employment type to ‘unemployed’, enter the proven income amount and the employer information should remain in the system. Notify the dealer that the customer is no longer employed and a request should be made to get good employment information (the deal should not be held). If the customer was unemployed at the contract signing, the analyst should encourage the dealer to take the deal back. If the dealer still wants the deal in their pool, we will hold the deal for new employment information and rescore the deal at the job time and income when provided. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 10.1.2013/v.2 CAPS Funding Guidelines Page 86 Can I complete employment verification with the customer? No. Employment verification must be completed with the employer. Can I attempt employment verification even if there is not a Right Party Contact (‘RPC’)? Attempt to verify the following employer information even if there is not a Right Party Contact (‘RPC’): employer name, verification phone number, physical address, and phone number to the physical location. Common Pitfalls Not changing job time. Related Documents Phone Policy Customer Verification Policy THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 10.1.2013/v.2 CAPS Funding Guidelines Page 87 CUSTOMER VERIFICATION POLICY Policy The Dealer Service Center attempts to contact the customer to verify the accuracy of information entered into CAPS from the original application. Reason Required Accuracy of customer information is critical to collection efforts. Verified information can affect the risk of the deal which can impact the advance paid. POLICY REQUIREMENTS A verification attempt on the driver and 2 signer’s primary residence phone number is required on every contract unless CAPS automatically closes the stipulation. When all originally provided phone numbers are bad (disconnected or do not belong to the customer), hold funding until both a valid number and a Right Party Contact at the new number are obtained. A Right Party Contact (RPC) consists of talking to the customer and verifying his/her Date of Birth. nd Related Policies Phone Policy THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 88 ADVANCE POLICY Policy Dealers expect to be paid an advance based on information submitted through CAPS. If the information provided differs, the advance adjusts accordingly. Reason Required Ensures the dealer is advanced according to the risk associated with the deal structure. Helps to protect the dealer’s rating and contributes to the success of the BHAG. POLICY REQUIREMENTS Actual advance paid should reflect the following data points and processes: customer application information, contract review, and input from the verification process. If the account for a new dealer (with 5 deals or less) is placed “On Hold,” call the dealer and apply the skills described in the CLEAR Call Model. Where the application advance is within $100 (higher or lower) of the contract advance, then: 1. Match the application advance (amount dealer expects from initial CAPS submission) 2. Input correct adjustment amount (positive or negative) within the ‘Adv/Adj’ screen of CAPS 3. Ensure account is noted accordingly If the advance is lower than the submitted advance by an amount greater than $100, obtain dealer approval of the reduction prior to funding. Account must be current for funding. If the account has not been resolved in 45 days since being placed “On Hold,” the dealer has three options: 1. Re-assignment of the account back to the dealer 2. Pay the account with a zero ($0) dollar advance. If there has been no contact with the dealer in 45 days, pay the account with a zero ($0) dollar advance 3. Change the program to Collection Only THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 89 BANKRUPTCY POLICY (FILED PRIOR TO ORIGINATION) nd Policy When an open bankruptcy is detected for the driver/2 signer, documentation verifying the bankruptcy type (Ch. 7 or Ch. 13) and current status of the bankruptcy is required. Reason Required Ensures any CA payment obligations will not be impacted by the open bankruptcy. Separates CA customer payments from the bankruptcy plan. POLICY REQUIREMENTS Identify an open bankruptcy – A stipulation will populate in CAPS/ACS: When this stipulation appears, the dealer is required to obtain official bankruptcy court documentation identifying the bankruptcy case number. Confirm that the documentation received is for the appropriate petitioned case number. We need documents/verification for the most recent bankruptcy disclosed on the bureau. If open bankruptcy is ‘Chapter 7’: Nothing needed. If open bankruptcy is ‘Chapter 13’, our requirements are: Filed less than 5 years ago (and bureau doesn’t indicate discharge/dismissal) 1. Need proof of discharge/dismissal or 2. Need letter from the bankruptcy trustee or judge stating the customer can incur the additional debt and that repayment can be made directly to CA outside of the plan. Filed more than 5 years ago – Nothing needed. Proof of discharge is not necessary. ADDITIONAL INFORMATION Frequently Asked Questions If two bankruptcies are listed on the bureau, how do you determine which is current? Always refer to the most recently filed bankruptcy (based on the file date listed on the bureau). A person can only have one bankruptcy at a time, so a more recent bankruptcy will replace any that were previously filed. Do letters from the attorney qualify in lieu of a trustee letter? No. The attorney cannot grant permission for the customer to incur new debt. This can only be done through the bankruptcy trustee or judge. What other ways can the status of a bankruptcy be verified? This information can be confirmed through the bankruptcy court’s voice-case system or through the Pacer internet site. What is the difference between a bankruptcy discharge and dismissal? Discharge means that all debt listed in the bankruptcy plan is eliminated. Dismissal means the customer failed to complete the bankruptcy. Dismissals are treated as if the bankruptcy was never filed. What should I do if the court district the customer lives in does not grant trustee letters? Some court districts (e.g., Birmingham, AL) will not issue trustee letters. In these cases, a letter stating the court does not approve of or deny additional debt must be provided. Common Pitfalls Not verifying the bankruptcy case number on documentation provided. Accepting letters from the customer’s attorney. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 90 BANKRUPTCY POLICY (FILED AFTER ORIGINATION) Policy When a customer files bankruptcy after origination but prior to funding, CA must ensure that the rights to the vehicle are protected prior to funding the dealer. Reason Required Ensures CA is protected as a secured creditor in the bankruptcy filing. Failure to perfect the lien within 30 days of origination could cause the lien to be voided in the bankruptcy. POLICY REQUIREMENTS Confirm that the lien or title documents are checked in for the account. The lien must be perfected (proof showing the placement of lien was completed) within 30 days of origination in order to fund the deal. If lien is not perfected within 30 days of origination then fund the deal with $0 advance. ADDITIONAL INFORMATION Frequently How can I identify a new bankruptcy filing? Asked A bankruptcy alert e-mail will be sent to the DPSC Leadership Team mail box. Questions Can the dealer cancel the deal following the bankruptcy filing? No. Since Credit Acceptance is listed as the creditor in the bankruptcy we are liable for any collection actions that the dealer may pursue and the resulting litigation. If the dealer perfects the lien 31 days after origination is it OK to fund the deal? If the lien is perfected 31 days after the contract date the deal must be funded with a $0 advance. In a Chapter 13, if the lien is not perfected within 30 days of origination, the trustee can file an adversary to avoid our lien. When this happens, Credit Acceptance will be considered an unsecured creditor and will be unable to collect or repossess the vehicle. In a Chapter 7, if the lien is not perfected in 30 days the trustee can take possession of the vehicle, Credit Acceptance would be required to release the lien and the trustee can liquidate the vehicle and disburse the proceeds to all creditors. Additionally, perfecting the lien after the 30 days is considered a violation of the automatic stay. Since the bankruptcy was filed so shortly after origination, can CA be excluded as a bad faith filing? Credit Acceptance can file a motion to avoid discharge of the loan due to a bad faith filing. However, this requires that Credit Acceptance prove that the debtor intentionally misrepresented their credit worthiness prior to filing. Since the debtor’s credit is most likely sub-prime, Credit Acceptance will have a difficult time winning this argument. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 91 ITIN CUSTOMER POLICY Policy An ITIN (Individual Taxpayer Identification Number) is issued by the IRS to those who do not qualify for a Social Security Number. These customers are treated as self-employed or “cash income” customers because those who do not qualify for a Social Security Number may not be authorized to work in the U.S. As such, their employment status may be less stable. POLICY REQUIREMENTS Ensure an ITIN customer is properly recognized: Customer does not have a SSN but instead has an ITIN issued by IRS ITIN is a nine-digit number beginning with ‘9’ and lists a ‘7’ or ‘8’ in the fourth digit Ensure we have a copy of the ITIN card or IRS letter (unless bureau history exists for the ITIN) ADDITIONAL INFORMATION Frequently Asked Questions What if my customer doesn’t have either a SSN or valid proof of an ITIN? The deal will be processed as Collection Only. Why do we seem to treat ITIN customers as a higher risk? Even though ITIN customers can file taxes (W7), an ITIN does not authorize one to work. Since an ITIN customer may not be authorized to work, there may not be a consistent source of income, which creates additional risk. Common Pitfalls Not correctly recognizing an ITIN customer. Related Documents Income Policy- Proofs Income Policy- Employment Type THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 10.7.2013/v.2 CAPS Funding Guidelines Page 92 CONSUMER IDENTIFICATION FUNDING STANDARD The following information describes what is necessary to clear the stipulation in CAPS. Consumer Identification Funding Standard The Company requires a CAPS generated credit application signed by the consumer that includes the following information: What needs to be completed for an acceptable credit application? SSN/ITIN Date of birth First and last name Address Consumer must be at least 18 years old (19 in Alabama) Consumer must be a US resident If the consumer report in CAPS does not belong to the consumer, ensure that the name, address, DOB, and social security / ITIN number were entered correctly in CAPS. If there was an error, correct the information and pull the consumer report again. The following is a list of stipulations that may arise due to discrepancies between the information the consumer provides and that which appears on a consumer report, and the action required to close the stipulation: What if there is a bureau discrepancy in CAPS? Stipulation Action Required ALERT - CONSUMER DOB OR AGE DOES NOT MATCH BUREAU Verify that date of birth was entered correctly in CAPS and provide a U.S. issued government ID to prove date of birth. ALERT - CONSUMER SSN DOES NOT MATCH BUREAU Provide social security card or letter from Social Security Administration proving SSN is correct. ALERT - CONSUMER SSN HAS NEVER BEEN ISSUED Provide a letter from Social Security Administration confirming SSN. ALERT - CONSUMER IS ON ACTIVE DUTY Follow instructions provided by the consumer report. A valid power of attorney or full verification with consumer may be required. ALERT - FRAUD VICTIM ALERT EXISTS ON CONSUMER BUREAU Follow instructions provided by the consumer report. Full verification with consumer is required. ALERT - CONSUMER SSN WAS ISSUED TO A DECEASED PERSON Provide a letter from Social Security Administration confirming SSN. ALERT - CONSUMER BUREAU HAS BEEN RE-PULLED Please review the credit bureau to verify the date of birth, the SSN, the status of any open bankruptcies, and review fraud or other alerts. ALERT - CHECK CONSUMER DOB: APPLICANT MAY BE TOO YOUNG TO FINANCE A VEHICLE Review bureau and identification to confirm date of birth. CONSUMER FRAUD ALERT: SSN has been associated with altered funding documents. Call DSC at 1-800-729-7633 before proceeding. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 8.2.2013/v.2 CAPS Funding Guidelines Page 93 What if multiple credit applications are received? If multiple credit applications are received with conflicting information, funding may be delayed while the DSC determines the correct consumer information. Handwritten information provided on a signed credit application will supersede electronically printed credit application information. What documents are unacceptable? Credit applications not generated from CAPS. Related Documents Policy Directly Associated with Standard Consumer Identification Policy OFAC Policy Job Aids Directly Associated with Standard Other Related Documents Version History Version 1 Date Description Author 6/16/15 This Consumer Identification Standard documents preexisting processes consolidated from the Applicant Policy. The prior policy will be retired in the Published Documents Library. Additional information has been captured within the document to incorporate requirements for obtaining accurate consumer identity information to match the correct person seeking credit approval. J Lum THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 8.2.2013/v.2 CAPS Funding Guidelines Page 94 FRAUD DETECTION POLICY Policy If fraud is suspected, the document should be reviewed with a supervisor. If verified, dealer should be called (by supervisor) and the deal should be sent back. Reason Required Fraudulent documents raise obvious concerns about deal integrity and future ability to collect. Such documents can indicate potential concerns with the customer or with dealer staff. POLICY REQUIREMENTS If fraud is suspected Analyst reviews documentation with supervisor or risk team to confirm Analyst verifies the document is fraud depending on the type of fraud suspected. (If regarding income, call the Place of Employment.) Supervisor notifies dealer of potential fraud and requests new qualifying doc if suspected in: 1. Proof of Income, 3. Proof of Bank, 5. Insurance Information, 2. Proof of Residence, 4. Reference Information, 6. Proof of Lien. If fraud is confirmed through verification send the deal back to the dealer. If the fraud is not confirmed the Dealer has the opportunity to provide qualifying document(s) Update account with correct information (ensuring rescore). Supervisor completes stipulation. If Dealer is unable to provide qualifying document send the deal back. Analyst notes account documenting the suspected fraud and naming the supervisor you notified (and the dealer contact they spoke with). Supervisor updates Fraud Tracking Database. If the Fraud Alert Stipulation appears refer to the Fraud Alert Stipulation tool on SharePoint. ADDITIONAL INFORMATION Frequently Asked Questions Is employment verification adequate when Proof of Income is suspected to be fraudulent? Not in most cases since following the verification call script does not always uncover fraud. The questions we ask should be tailored to the documents in question (e.g., why taxes, YTD figure, or pay dates are off, etc). Refer to Fraud Identification Questions for examples of questions to ask if you suspect fraud. Cancelled checks or bank deposits supporting the income are required. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 95 Where can I receive additional information about how to identify fraudulent documents? The Fraud Identification Tips, your supervisor, or the audit group can offer guidance in the event you are unclear what to do. What should be done if the fraudulent document was pre-approved? If we receive contradicting information during the funding process that results in the identification of fraud, we can still change our original decision. Identify training needs with the original pre-approver, call the dealer, update Fraud Tracking Database, and proceed as if it was not preapproved. What if a dealer keeps sending a doc for pre-approval that was rejected earlier as fraud? In this case we have grounds to go back on the pre-approval decision. The behavior should be escalated to a supervisor and addressed with the dealer and the MAM. Also, notify audit team. Common Pitfalls Not analyzing proofs thoroughly enough to detect fraud. Analyst completing a fraud-related stipulation (can only be completed by a supervisor). THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 96 PRIOR CUSTOMER POLICY Policy Reason Required The system will automatically consider the customer’s performance from the prior account in the calculation of the new account’s total advance. nd nd If driver (maker) or 2 signer (co-maker) on new account was prior customer (driver or 2 signer on prior account) evaluate ‘standing’ of prior account before funding new deal. Helps Collections by requiring one-time payment from customers with delinquent accounts. POLICY REQUIREMENTS Determine the task type and status of the prior account. If the account is in a BNKR task type you can determine the bankruptcy chapter in the BNKR Customer Info Screen in Artiva. If the account is in a BNKR task type you can determine if the bankruptcy is dismissed (DM or DISM) in the BNKR Customer Info Screen in Artiva. If the account is in a BNKR task type you can determine if the bankruptcy is discharged (DS) in the BNKR Customer Info Screen in Artiva. If the prior account is closed there is no requirement for proceeding with a new loan. Evaluate (using below guide) prior account ‘standing’ in order to determine the requirements for proceeding with a new loan. Ensure prior account requirements are met or offer Collection Only if requirements cannot be met. If necessary contact Dealer Support through the following means: 1- Call for any required payoff quote or 2- Email for any required attorney balance. Ensure customer has no more than 2 open accounts; customer can only be a driver (maker) on one account. If the driver and 2 signer are married and the dealer wants one of the customers to be the maker on more than one loan please refer the account to a DPSC Supervisor. nd THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 97 OPEN ACCOUNTS – Verify in Artiva New Account Maker or Co-Maker Maker or Co-Maker Maker Prior Account Task Type Status Maker or Co-Maker Maker or Co-Maker Maker All Task Types SSA INS Any Status All Other Task Types Co-Maker Co-Maker All Other Task Types Maker Co-Maker All Other Task Types Co-Maker Maker All Other Task Types Maker or Co-Maker Maker or Co-Maker SRCT, LGL, S98 All Other Statuses All Other Statuses All Other Statuses All Other Statuses Any Status Maker or Co-Maker Maker or Co-Maker Maker or Co-Maker Maker or Co-Maker Maker or Co-Maker Maker or Co-Maker Maker or Co-Maker Maker or Co-Maker BNKR (Ch.7 - Discharged) BNKR (Ch13 -Discharged) BNKR (Chapter 7) BNKR (Chapter 13) Requirement to Proceed with New Account Account must be current (past due amount of $0). Account must be paid in full. Account must be paid in full. Any Status Account must be current (past due amount of $0). Account must be current (past due amount of $0). Account must be current (past due amount of $0). 50% of prior account balance. (Paid to Credit Acceptance) There is no requirement. Any Status There is no requirement. All Other Statuses Any Status Collection Only Collection Only THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 98 ORIGINATIONS: COLLECTION ONLY PROGRAM POLICY Policy The Collection Only Program provides no advance (except on ancillary products) but gives dealer’s access to the Credit Acceptance collections team to service their loans. The dealer receives the same 80/20 share of collections on a monthly basis as in the Portfolio Program. POLICY REQUIREMENTS Ensure all Legal Compliance Documents are executed properly and within the applicable state compliance limits: Retail Installment Contract Credit Application Vehicle Service Contract, if applicable GAP Addendum and GAP Acceptance of Coverage, if applicable Consent & Authorization Form Credit Report Authorization Form Disclosure Form Head of Family Garnishment form (FL), if applicable Notice to Co-signer Form, if applicable CAPS Automatic Payment Authorization Form (Auto Pay), if applicable Buyer Agreement for Installation of a Vehicle Starter Interruption Device and GPS System (GPS /SID) Form, if applicable Illinois ERT (Electronic and Titling) Fee Disclosure Form, if applicable Vermont Disclosure – Form B-28 (VT), if applicable New York GAP Waiver Form, if applicable Truth In Lending Disclosure Acknowledgement, if applicable Nevada Agreement to Arbitrate Form, if applicable Ensure all of the inputs on the Retail Installment Contract are within the applicable state compliance limits. Note: This includes compliance for all fees and charges, including compliance with the state specific maximum finance charge, and also the Company maximum finance charge policy limiting the interest rate to 28.99%. When the following situations arise in the funding process the deal must be processed Collection Only: If the customer(s) cannot be reached by phone on at least 1 phone number each, If no income can be proven, If the payment exceeds 25% of the proven monthly income, or If the standard payment is less than $200. ADDITIONAL INFORMATION Frequently Asked Questions What are the benefits of the Collection Only Program? The Collection Only Program is beneficial because the dealer: Is not required to provide proofs or stipulations, Is not required to meet minimum/maximum requirements on down payments and loan term, Receives 80% of the customer’s monthly payments from the beginning unless advances were paid on ancillary products, which must be paid back first, THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2014 Credit Acceptance Corporation. All Rights Reserved. 3.13.2014/v.1 CAPS Funding Guidelines Page 99 Controls financing and structure of the contract for their customer, and Assigns the contract to Credit Acceptance for collection versus buy here pay here. What are the features of the Collection Only Program? The Collection Only Program has the following features: Advance paid on ancillary products, Separate pool of business, Portfolio profit beginning upon collections the month following the loan origination, and Does not impact the dealer’s rating. Common Pitfalls Not paying the Service Contract commissions. Not paying GAP commissions. Related Documents Legal – Retail Installment Contract Policy Legal – Credit Application Policy Legal – Vehicle Service Contract Policy Legal - GAP (Guaranteed Asset Protection) Policy Legal – Consent and Authorization Form Policy Legal – Credit Report Authorization Form Policy Legal – Disclosure Form Policy Legal – Head of Family Garnishment Form (FL) Legal – Notice to Co Signer Form Policy Originations – Originations AutoPay Policy Originations – GPS SID Policy Legal – Illinois ERT (Electronic and Titling Fee Disclosure Form Policy Legal – Vermont Disclosure – Form B-28 (VT) Policy Legal – New York GAP Addendum Form Policy Legal – Truth In Lending Act (TILA) Contract Disclosures Policy Legal – Nevada Agreement to Arbitrate Form Policy THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2014 Credit Acceptance Corporation. All Rights Reserved. 3.13.2014/v.1 CAPS Funding Guidelines Page 100 VEHICLE FUNDING STANDARD The Company will allow all automobiles and light trucks (“Vehicles”) to be eligible for financing under all Funding Programs, except those Vehicles having any one of the following characteristics: Vehicles without a valid Vehicle Identification Number (“VIN”) Vehicles that require a title, but are not able to be titled in the state in which they are intended to be used Vehicles that are subject to a current security interest in favor of the Company on an open account and the Company does not intend to release that security interest Vehicles used for a purpose other than personal, family, or household purposes Vehicles that have a Negative Event, included but not limited to Flood Damage, as defined from time to time by the Company, reflected in its history Vehicle Ensure that the following vehicle information is entered properly: What vehicle information should be entered in CAPS? What options are available for disputing vehicles with negative event history? Year VIN Odometer Mileage Make Color Vehicle Condition (new or used) Model Body style Dispute Negative Events by contacting AutoCheck (by Experian) directly: E-mail: [email protected] Phone: 888-409-2204 To determine if the vehicle has a Negative Eevent before it is submitted in CAPS select the “Check Vehicle Compliance” option on the “Add Vehicle / Update Vehicle” screen. Note: The vehicle will be checked for Negative Events again at the time of submission. THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines 1. Page 101 Vehicles without a valid VIN. The following error messages will appear in CAPS when vehicles with an invalid VIN are entered: ”VIN not found by AutoCheck” o ”VIN not found in value guide. Please correct the VIN to proceed” o 2. 3. Which vehicles are unacceptable? 4. 5. The VIN could not be decoded by AutoCheck. Only vehicles with a valid VIN can be submitted in CAPS. This message indicates that BlackBook cannot value the vehicle. In order for a vehicle to be sold under any Credit Acceptance Funding Program it will need to have a value Vehicles that require a title, but are not able to be titled in the state in which they are intended to be used Vehicles that are subject to a current security interest in favor of the Company on an open account and the Company does not intend to release that security interest Vehicles used for a purpose other than personal, family, or household purposes Vehicles that have a Negative Event, included but not limited to Flood Damage, as defined from time to time by the Company, reflected in its history The Company does not accept vehicles with the following Negative Event history: Abandoned Odometer Problem Junk Assembled Rollback Lemon Crash Test Vehicle Police Use Auction Lemon Commercial Use Rebuilt / Rebuildable Hawaii Lemon Fire Damage Recycled Major Damage Incident Salvage Auction Salvage Flood / Water Damage Hail Damage Frame Damage Title Damage Insurance Loss Taxi Use Prior Taxi Fleet Taxi Grey Market Related Documents Policy Directly Associated with Standard Vehicle Policy Job Aids Directly Associated with Standard Other Related Documents THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 102 Version History Version 1 Date Description Author 6/3/15 The Dealer Funding Standard – Vehicle documents preexisting processes consolidated from the Vehicle Policy and the Vehicle Information Policy. The prior policies are being retired from the Published Documents Library. J Lum THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 103 TITLE TRANSFER POLICY Policy The Title Transfer Policy (commonly referred to as “TTP”) describes a dealer’s obligation to transfer title to the customer and perfect Credit Acceptance’s security interest in the vehicle by filing a lien on the title. POLICY REQUIREMENTS Dealers must take all steps required by laws and regulations to (1) enable the maker and/or co-maker of a financed vehicle to register and title the financed vehicle; and (2) ensure Credit Acceptance has a first and prior perfected security interest in the financed vehicle. Dealers must timely transfer title to the maker and/or co-maker. Dealers must register Credit Acceptance’s lien within 30 days of delivery of the financed vehicle. Credit Acceptance will monitor compliance with this policy by utilizing the process and procedures set forth in the Title Transfer Timeline and Title Transfer BPM. CONSEQUENCES FOR NON-COMPLIANCE If a dealer violates this policy, and title has not been issued in the purchaser and/or co-purchaser’s name, Credit Acceptance will not knowingly engage in collection activity on the account. If the dealer has not transferred title within a reasonable time after funding (as defined in the Title Transfer Timeline), Credit Acceptance will cancel the contract, the dealer must return the advance, and collections activity will permanently cease. Credit Acceptance will seek return of the advance if: (1) the Dealer has not started the lien registration process with the state within 30 days of delivery and our ability to collect has been adversely impacted; or (2) a title has not been issued reflecting Credit Acceptance as the lienholder within 30 days of State Average. Credit Acceptance may stop doing business with dealers who habitually create or fail to timely resolve title issues. In Missouri, if a dealer were to fail to deliver a title on more than three occasions during a six month period and refuse to cooperate with Credit Acceptance or government entities to resolve the issue or take prompt remedial action to prevent a violation of this policy, Credit Acceptance will stop doing business with the dealer and notify the Missouri Attorney General’s office. ADDITIONAL INFORMATION THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Frequently Asked Questions Page 104 Before Credit Acceptance accepts assignment of a contract (“lists the deal”), what must the dealer provide to the DSC to reflect that the purchaser and/or copurchaser will be able to register and title the vehicle? For contracts originated in Missouri, the dealer must provide the Declaration of Delivery & Receipt of Title Form. In all other states, there is nothing that the dealer must provide before Credit Acceptance lists the deal. Prior to funding, what must the dealer provide to the DSC to reflect that the purchaser and/or co-purchaser will be able to register and title the vehicle? Prior to funding, the dealer must provide to the DSC a title or title application: Issued by the state or contained in a form approved by the state or county; Reflecting the year, make, model, VIN of the vehicle exactly as listed in CAPS; Identifying the maker and/or co-maker as the owner and no other third parties; Containing the address of the maker and/or co-maker; and Signed by the maker and/or co-maker (except where the dealer provides a Power of Attorney). Prior to funding, what must the dealer provide to the DSC to reflect that Credit Acceptance has a first and prior perfected security interest in the financed vehicle? Prior to funding, the dealer must provide to the DSC a lien or lien registration: Listing Credit Acceptance as the sole lienholder (no other lienholders may be on the title); Listing Credit Acceptance’s address as: P.O. Box 513 Southfield, MI 48037; or 25505 W. Twelve Mile Rd., Southfield, MI 48034 Containing state-specific ID numbers where applicable. Are the title application and lien registration separate documents? Most often, no. In most states, the title application and lien registration are part of the same document. Will Credit Acceptance fund a deal where the dealer did not sign the title application/lien registration? Yes. Often times, the dealer will send to Credit Acceptance a copy of the title application/lien registration before it is signed, but the dealer will sign it before going to the DMV. If the dealer does fail to sign the title application/lien registration prior to providing it to the DMV, the Titles Department has a process in place to handle the issue. If a dealer does not transfer title in accordance with applicable state law, what is the consequence? Credit Acceptance will cancel the contract, the dealer must return the advance, and collections must permanently cease. If Credit Acceptance does not receive evidence that title actually transferred to the maker and/or co-maker within 30 days of State Average, what is the consequence? Credit Acceptance will cancel the contract, the dealer must return the advance, and collections must permanently cease. If a dealer does not timely register a lien, what is the consequence? Credit Acceptance will seek return of the advance if: (1) the Dealer has not started the THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1 CAPS Funding Guidelines Page 105 lien registration process with the state within 30 days of delivery and our ability to collect has been adversely impacted; or (2) a title has not been issued reflecting Credit Acceptance as the lienholder within 30 days of State Average. Why is it necessary for a dealer to lawfully transfer title? It is necessary because if a dealer fails to comply with titling laws and regulations, the following may occur: o Customer may not be able to register and lawfully operate the vehicle; o Contract may be void as a matter of law (e.g., Missouri and Kansas); and/or o Collection activity by Credit Acceptance must cease. Why must a title be in the purchaser and/or co-purchaser’s name? If the title is not in the name of the purchaser and/or co-purchaser, we run the following risk: o The contract may not be enforceable; o The vehicle may have been sold without authorization; and/or o The prior owner may still have a right to the vehicle. Why must the dealer register Credit Acceptance’s lien? If a dealer fails to register Credit Acceptance’s lien within 30 days of delivery: o Lien may be discharged in bankruptcy; o Credit Acceptance has no right to exercise self-help repossession; and/or o Credit Acceptance may lose right to receive insurance proceeds. What constitutes “collection activity”? Collection activity includes, but is not limited to, demanding payment, assessing late fees and other penalties for payments that are not timely made or not made at all, reporting credit information relating to such payments or non-payments, sending notices of default, accelerating loan amounts, filing collection lawsuits, obtaining judgments, and pursuing garnishments. Related Documents Title Transfer Timeline Title Transfer BPM Title Rules By State Declaration of Delivery & Receipt of Title Form Title Application Only Policy Manual THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO CREDIT ACCEPTANCE CORPORATION. ANY USE OR REPRODUCTION IN ANY FORM, WITHOUT WRITTEN PERMISSION OF CREDIT ACCEPTANCE IS PROHIBITED. ©2013 Credit Acceptance Corporation. All Rights Reserved. 5.13.2013/v.1
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