May 28, 2025 • 25 mins
As the auto finance industry faces mounting regulatory scrutiny and increasingly sophisticated fraud tactics, lenders are working together to navigate risk, improve compliance, and better serve today’s borrowers.
In this episode, recorded at CBA Live 2025 in Orlando, host Matt Snow sits down with Fabien Thierry, Head of Indirect Lending at Bank of America, and Mike Gilbert, Director of Consumer Lending at Associated Bank. Serving as chair and co-chair of the CBA Auto Finance Committee, Fabien and Mike discuss how the committee is helping lenders respond to the most urgent challenges in auto finance—from new CFPB directives to the rising threat of synthetic identity fraud—through collaboration, data-driven strategies, and shared best practices.
Join us as we discuss:
In this episode, recorded at CBA Live 2025 in Orlando, host Matt Snow sits down with Fabien Thierry, Head of Indirect Lending at Bank of America, and Mike Gilbert, Director of Consumer Lending at Associated Bank. Serving as chair and co-chair of the CBA Auto Finance Committee, Fabien and Mike discuss how the committee is helping lenders respond to the most urgent challenges in auto finance—from new CFPB directives to the rising threat of synthetic identity fraud—through collaboration, data-driven strategies, and shared best practices.
Join us as we discuss:
- The impact of evolving federal and state regulations on lender operations and how the committee is driving policy advocacy
- The surge in synthetic identity and first-party fraud, and the tools being deployed to detect and prevent financial losses
- Financing complexities tied to electric vehicles, including rising costs, residual value concerns, and infrastructure limitations
- How digital lending innovations are improving decisioning speed, borrower transparency, and overall loan experience
- Why industry-wide coordination—between lenders, dealers, and tech providers—is essential for managing disruption and delivering value
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Hey everyone, Matt Snow again here from Upstart live from
CBA in Orlando, Florida, with Fabian Terry and Mike gilbert
there from the Auto Committee.
Speaker 2 (00:14):
Thanks for joining me, guys, Thank you for having us.
Speaker 1 (00:16):
Yes, absolutely, Why don't we get started by maybe some
personal introductions. Where you're working today?
Speaker 3 (00:21):
Absolutely so, Fabian Sierry So. I work for Bank of America.
I lead the Auto Consumer and Small Business organization. I've
been with the bank for seventeen years now and various
capacities and specifically for the CBA. I'm the chair of
the Auto Committee, and I'm peaced to be here.
Speaker 1 (00:41):
Great.
Speaker 2 (00:41):
Thank you.
Speaker 1 (00:42):
So.
Speaker 4 (00:42):
Mike Gilberton, co chair with Fabian and the Auto Committee,
currently an associated bank, been there since startup for their
indirect Auto September twenty one. Prior to that, twenty eight
years at Key Bank, and then an illustrious start in
this business at GMAC if you can call that name. Yeah,
So happy to be here.
Speaker 1 (01:01):
Great, Well, thanks guys. I know you know sometimes we've
talked with past gasts about getting into banking. Was that
a childhood dream or like, how did you get into
the banking world?
Speaker 3 (01:09):
Actually, my my background is actually in the auto space,
so as not even working for fold back in Europe, gotcha,
spent ten years with them various capacities, and then I
droned the banking industry when I moved to the US.
That was over seventeen years ago, and then more it was,
say like.
Speaker 2 (01:27):
Four years ago.
Speaker 3 (01:29):
I've been I've been eating but the auto division at
the bank. So it's kind of like full circle of
all my head.
Speaker 2 (01:34):
Exactly nice. How about you, Mike, Yes.
Speaker 4 (01:36):
Right out of college, hired a GMAC So it's all
I've ever known, all I've ever done, and all I've
ever loved.
Speaker 1 (01:42):
So yeah, great, and that's probably what's brought you both
to the committee. So maybe first, you know, describe a
little bit about the committee's role, how you ended up there,
and it's important importance within the CBA.
Speaker 2 (01:53):
Do you want to go?
Speaker 4 (01:55):
So yeah, I mean it's if you're interested and you
want to engage, which obviously the two of us here
we were definitely interested. It's a passion something we love.
And then we're engaged you would like to participate, like
a dig into things like to just be a member
of the committee. And then obviously the more vocal we are,
the more you want to kind of not take charge,
(02:16):
but just take some ownership. You kind of elevate to
these two positions where you've you've got extra responsibilities and duties.
But it's fun. It's not work right, so's it's a joy.
It's a pleasure to work with and partner with twenty
five other auto lenders. We're competitors, but we're respectful, we're friends.
So it's a great group that we're part of.
Speaker 2 (02:39):
It's a great group of PIO.
Speaker 3 (02:40):
What Mike was saying, I think we just had the
opportunity to be working. We've community members that are very
passionate and knowledgeable. We all want the same thing. We
want to serve our customers. We know and understand THEOTWO industry,
and so we have the portunity on a monthly business
to be meeting as a committee cover everything from regulatory
(03:02):
to you know, new industry trends. Obviously, with the involvement
of the the CBA, we're able to get connectivity through
having like different you know, players vendors coming and talking
to us about the challenges, what they're seeing, and more importantly,
how can we keep moving the industry forward. And so
as as the share and the co chair Mike and
(03:24):
I had the opportunity to be you know, interacting with
all the bankers and regardless of the size of the banks,
we we kind of like we have a common agenda
and we're trying to do the.
Speaker 2 (03:34):
Best for our customers. Yeah.
Speaker 1 (03:35):
Great, it must be something you enjoy if you're giving
up four hours of a weekend to come and chat
about these things and meetings together and multiple sessions throughout.
What are some of the common maybe concerns of members
today are addressing.
Speaker 3 (03:48):
Yeah, regulatory has been front end center for the last
couple of years, so we spent a lot of time
talking about you know, regulatory agencies and and and what
it means for the industry from the dealer side as
well as from the consumer impact on the banks. We
talk about just some of the you know, gap refunds,
(04:11):
insurance refund to a lot of the topics that the
CFPB had on their agenda. Those are the type of
topics that we discuss as as you know with the
with the rest of the of the bank partners the
rest will be more centric around fraud. I would say
it has been kind of like maybe a topic that
has been growing. Unfortunately, spent a lot of time talking
(04:34):
about what it means, what we're saying, and how we
can combat fraud and so again leveraging partners and solution.
Speaker 2 (04:43):
Across the industry to try to advise that issue. And
the last one, Mike, I think it's just more like
industry trains what we're saying from like more the topic
that drives the market forward.
Speaker 3 (04:56):
So electric vehicle was was one topic that we spend
a lot of time covering in our committee.
Speaker 2 (05:03):
Anything else that you can think.
Speaker 4 (05:05):
About, yeah, I mean it's all it's front and center,
it's top of mine in real time. So Fabian and
I do a good job. I'll give us both credit.
As soon as something comes out. It's the State of
New York Attorney General came out with, you know, trying
to form a CFPB. That was out to the members
within thirty minutes when that was released. So that's just
one example. As soon as something hits, we put it
out for everyone, and then when we get together either
(05:26):
in person or once a month on our team's call,
we revisit it, We talk about it, try to drill
into more than Okay, anybody can read the article, right,
so what does it really? What's it mean? What's it mean?
And how do we take what it means and put
it in practice? How do we act on it? Not
act on it? I mean decho a little bit about
what Faban mentioned right, regulatory CFPB. You know, we all
(05:47):
know we've dealt with supervisory highlights. It wasn't the rule
of how you should have followed things some people believe.
But nonetheless, you know, where does the CFPB sit now?
What does it mean for us? How are we digesting that?
What will happen? You know, you try to crystal ball it.
If the CFPB isn't in its current state, are the
(06:09):
states going to come out? What would those look like?
If you have a national lender, right, and the national
lender now has to deal with twenty versions of a CFPB,
what's that look like? Is it easier just to deal
with one versus twenty? So these are things we talked about,
Like I said yesterday, Fraudy mentioned, but it's what we
kind of deep dive into. We don't share trade secrets,
(06:32):
but yeah, best practices and it's good to just hear
real time what other folks see around all those topics,
and there's a lot of them.
Speaker 1 (06:40):
Yeah, I was going to say that's probably now more
than ever an important role for the committee with the
pace of change, the uncertainty the state level you mentioned
is another dimension. Just trying to share the awareness, let
alone best practices like just get any information out there
would be important. Absolutely, how do you stay on top
of those things or get the information?
Speaker 3 (07:02):
Yeah, I mean think about so again I will on
the regulatory side, just we obviously stay very close to
to what's happening, not only at the CBA, but we.
Speaker 2 (07:12):
Also leverage other trade organization after.
Speaker 3 (07:16):
NDA to kind of like again just to get get
get the information. In the end of our members, it's
it's that it's about communication and transparency. So regulatory is
definitely one one one topic. But just to answer your question,
also think about just also the all the digital transformation
that is happening in the other space. But that is
(07:37):
also something that that week over I talk about just
the importance of bringing a third party coming to.
Speaker 2 (07:43):
Talk to us.
Speaker 3 (07:44):
Was our experts in the field are trying to kind
of have those digital tools that help solving.
Speaker 2 (07:48):
Some of those issues and gaps. Some Yesterday, the conversation.
Speaker 3 (07:52):
During the the CBA event a committee that we were
we were running, we talk about throw that length and
we talk about you know, all the f NI products
and and and the charges and how to stay on
top of it. There's a lot of activities going to
that space. There's players there, the planes that are trying
to solve it. So bringing was was was players in
(08:14):
front of the committee. Having open conversation where you have
pretty much representation of the entire landing community is extremely helpful.
Speaker 2 (08:22):
So that's that's that's that's that's what the community hope proc.
Speaker 1 (08:26):
Are you seeing innovation in any one specific space? Is
fraud something that people are focused on now? Is it
the experience of the dealership? Is it in the financing?
Like where where are you seeing like the most innovation
bubble up lately?
Speaker 3 (08:39):
So we it's I will say it's crossed the boat,
so we But it happened at different stages.
Speaker 2 (08:47):
So a couple of years back.
Speaker 3 (08:49):
We've seen maybe transformation from a digital standpoint happening at
the application level, so where clients were looking for like
digital ways of kind of like going through the process.
Then econtracting came forward on the indirectly on the direct side.
Then then new tools came through. We're talking about fraud
(09:12):
documentation capabilities where clients or dealership will be providing uploading
the dogs directly to avoid the back and for so
in other words, technology come in our space in different
waves at different time.
Speaker 2 (09:24):
But so some of the.
Speaker 3 (09:26):
Inefficiencies that have been existing for years, and it's been
it's been it's been kind of like actually very very
high opening to for us to kind of like push
push the agenda and see how with all the progress
that we've made as an industry for the last couple
of years, the last piece more more ready to kind
of like the collateral you know, you were talking about financing.
(09:47):
So it's it's very interesting kind of like we've seen
with the entrance of electric vehicles, we've seen also kind
of like the model being challenged. So now we're starting
hearing from like a pure financing of the vehicle. You're
talking about charging station financing, you're talking about.
Speaker 2 (10:03):
Just subscription model.
Speaker 3 (10:04):
Right now, you're talking about manufacturers coming and thinking through
how do I separate the financing of the vehicle or
the financing of the battery. A lot of things how
happening in about space and it's in constant movement, so
we're staying on top of fot those trends as well.
Speaker 1 (10:18):
Gotcha. How about from the end consumer standpoint, like when
you're thinking about you know, customers the bank with associated
what are the things they're thinking about. Do they appreciate
like the level of complexity Fabian's talking about, or how
do they think about, you know, buying a car today
and coming to a bank for financing or that you
know through the dealer.
Speaker 2 (10:36):
Are they are they aware.
Speaker 1 (10:37):
Of the changes at this time?
Speaker 4 (10:39):
Yeah? I think most customers aren't. I mean, they read
what you can find out there in the press, but
they really don't know the intricacies behind the details that
we do. And they just they want to show up
at a car dealership point of sale. They want to
get there, pick out the car the options they want,
and leave with it timely and then make their payments
and move on. They really really don't know kind of
(11:01):
what Fabing had just framed up right, which is kind
of I call it the timeline of Originally somebody went
and applied for a loan, The lender looked at application data,
and you pull the credit report. Then you had a
credit report that had a fight Go score on it,
and you built the custom score, so then you had
a bankruptcy score that you could use. Then you have
a fraud score that you could use. Then you have
(11:23):
artificial intelligence that came in and started to look in
all kinds of this other data that you could layer
in on top of those just kind of core scores
to get to how do you make it? You know,
how do you make your decision? Then he mentioned collateral
you get into Okay, we just financed the car. Then
it was the core four back end, right, tirro and wheel,
prepaid maintenance gap, and a service contract. Now I can
(11:45):
sit here, We'll run out of time and list all
the things you can also add on top of that.
So it just gets more complex. The more complex it gets,
the more folks try to analyze it from a regulatory standpoint,
all the moving parts. It's it's evolved, some of it,
some of it good, some of it may be a
little fuzzy.
Speaker 3 (12:07):
But there's a need in the industry when you think
about this digitalization at different stage, we're realizing that in
order for the industry to provide better client experience and
to be more efficient general speaking, there's vire's a need
to uniform the way we collect data, the way that
data is transmitted from one provider to another. And that's
(12:30):
that's most likely why anticipate kind of like maybe the
next move to be from like going from call it
the paper to the electronic now trying to to to
to find a common.
Speaker 2 (12:39):
Way to pass the data.
Speaker 3 (12:41):
So the data that comes from the dealership will will
will be making our way to us lenders in in
in a similar fashion, I won't have like, you know,
ten different ways of like entering a field and creating
proper issues in the back end. And the same goes
on from like origination to service into collection.
Speaker 1 (13:01):
And do you think that's a reaction to open banking
and that rules are more more on the innovation side
and just trying to.
Speaker 2 (13:06):
More on the innovation side.
Speaker 3 (13:08):
Just simple the cycle of technology going through just again
it's the messy adoption trying to find efficiency in VAT.
Once you get the client going through that, now it's
the entire industry trying to look at the ways to
kind of like you know, better and more efficient ways
to kind of like from you.
Speaker 4 (13:24):
So I'll come in just so one of the fraud
So the fraudsters, they're smart, they're not stupid, right, So
I'd like to say they're smarter than me, so I
got to be I'll think in the room with them.
But yeah, they take the auto automation right, and we
want to be eighty ninety percent automation right, be efficient,
et cetera. And sometimes that comes at a cost because
if you're automating things, you're auto approving things, you're not
stopping things. So the fraudsters prey on that and use
(13:48):
that to their advantage. So you you've kind of always
got away your auto decisioning is an example, but I
want to dial that back a little bit to catch
some of this fraud. But then again, if you're slowing
down good deals to catch the one bad one. So
it's a definite struggle. We talked about that yesterday as well.
Speaker 1 (14:05):
Is there is there a formula to that or how
do people think about that? Generally, for every you know,
ten loans you approve, it's okay to have you know,
one bad one, Like.
Speaker 3 (14:15):
I don't think as a formula specifically. Obviously, depending on
your credit risk appetite and the size of your lending organization.
There's a lot of efficiencies that comes with, you know,
the automation and the tools that we just mentioned here
and that creates you know, literally you know, direct effect
on your bottom line. Now, like Max said, it's a
(14:37):
it's a ratio, it's a formula. But each financial institution
will have to solve for themselves. You know, due to
your size, you might be okay letting one or two
bad loans coming through. If you're a little smaller at
one or two bad loans, you want to catch earlier.
Speaker 2 (14:51):
And so so again, it's just like it's your risk.
Appetites is the way you generate. It will be very
different from one institution to another.
Speaker 4 (14:56):
Yeah, and I won't Yeah, I'll give you one example,
so perfect example. Economies of scale in size. We talked
about this yesterday. So if you apply for a loan,
we auto approve you, so everybody auto approves you. If
you go across the street you're shopping, some places will
not auto prove you. You'll dupe. It's a duplicate app
We look at, okay, is this customer trying to bust
out why they're trying to finance two cars? Well he's
(15:17):
just looking at this camera here and a camera cos yeah,
we'll buy him. We manually approve them. A lot of
folks will just automatically reapprove you again and again and again.
They won't stop that process. So what could happen? You
accept the risk you could finance ten cars eight cars
bust out, and that happens. You can finance eight cars
for you and you're going to put them all on
(15:38):
Turo and lease them out. So the economy of scale
that we would lose by not doing that is we
have to manually stop and say, okay, here's eighty deals
where the customer was trading in the car. They're legit,
but look at the ones we caught through a little fuzzy.
The other side is a lender may say it's acceptable risk.
We're not going to stop that automation for the couple
(15:59):
that we might get burned on. So it's a it's
a trade off as long as you understand that, yeah,
I think that's that's probably the most important thing, and
then you just solve for it and say do it
this way or do it the other way?
Speaker 2 (16:10):
Is it?
Speaker 1 (16:10):
Is it more of that type of fraud or what
are people more worried about? You know, especially with some
of the AI tools, you think about deep fake and
like how do you automate or even if you wanted
to phone call somebody or you know, try to even
manually intervene in a limited way. Are fraudsters more advanced
in some of those or is it just a lot
of you know, more first first party fraud.
Speaker 3 (16:29):
First party fraud, I think is what we're seeing the
most again just for for your audience. Those those are
you know, effect social security numbers behind a real person
and and and that that individual is used to kind
of like you know, go through application of of loans,
(16:52):
and that's what we're seeing. But to your comment, I
think this is the most important. Is that is getting
more and more sophisticated, requiring every one of you know,
the members at CBA to pay and keep.
Speaker 2 (17:04):
On investing invet space.
Speaker 3 (17:05):
So this is where we rely on tools, best practices,
share off information as well, try to combat troat. It's
becoming faster to your point with the if you're totally
aering AI on top of this, yes, it can be
created very fast.
Speaker 1 (17:19):
Yeah. And is it only something that can really be
prevented by every lender, every dealer, like at each point
of entry or is there any centralized way to stop
some of this that everyone can benefit from.
Speaker 4 (17:31):
So you can do a consortium and there's there's third parties.
I won't name them right, there's several that they do
a consortium that as soon as I catch fraud, I
reported the consortium so that if somebody gets an app
the next second, they'll know, so you can go to
the consortium route third party providers. But what unfortunately, or
I guess fortunately for us, Unfortunately for dealers dealers, by
(17:53):
virtue of our dealer agreement, if we catch fraud on
the back end, it's unfortunate. But they kind of a check.
They have tricks and devices through their insurance company. But
really they're really the ones that that identity fraud, the
fake ID, the fake driver's license, the meal somebody hired
somebody to come in. I'm right here in Florida has
I think it's the biggest one so far. Over three
(18:15):
hundred cars through that fraud ring. And of course they
were all delivered through dealers. All the dealers are technically
on the hook, but you know, so they're partners of ours.
We try to catch stuff to at our end, but
ultimately they're as far as red flag rules, you're familiar
with those, you know, they're bounded by those, just like
a bank is.
Speaker 1 (18:34):
Well, maybe enough on the scary topics like what are
the things you guys are excited about in this space,
like what are the things you see innovation again that
maybe benefits consumers, dealers, lenders that are coming up.
Speaker 3 (18:47):
Yeah, I mean one of the best, the biggest challenges
that we had, I will stop you about just to
go on the bright side of innovation. But a BTV
has been like a key concern for the last couple
of years. Obviously, we've seen you know, price plus COVID,
we've seen parts of vehicles on the use on you
going high created some challenges right environment being where it was,
So I think going forward you kind of look look
(19:09):
at that picture and hope for an opportunity for those
clients to refinance. It's been also very lease heavy again
just to address the affordability component. So I think you're
going to see that mix between lee's and purchase kind
of like rebalance itself.
Speaker 2 (19:24):
For lenders.
Speaker 3 (19:25):
It provide opportunities as well to kind of like you know,
keep those clients within within their portfolios, so you know,
you know, you can refinance to lise, buy out, and
and again provide provide the solution for for your clients.
Speaker 2 (19:39):
So I think we have.
Speaker 3 (19:41):
We have a lot of bridays in front of us.
I will just what I get excited about is just
like really kind of like when you think about the
auto experience that Mike was mentioning all the way off
from other as lenders. Either you you you only in
the end direct side and you work for your dealer network,
(20:01):
or you have also what we call client direct where
you provide financing solution for your clients. We were has
a lot of opportunities in the space to kind of
like revisit that client experience, find a pinpoints, address them
through through automation, through new tools that will make that
that experience better altogether. And we want to continue that
(20:24):
partnership with our dealers at the same time as a
find find financial institutions. We are here to provide like
the best client experience whatsoever. So we're here to provide
financing solutions and and and create that seamless integration with
the dealers.
Speaker 4 (20:40):
Mike, Yeah, I mean, I mean we're we've I think
the auto industry everyone's poised well, throw out recession threat,
throw out a terriff. I mean we can't control that stuff.
I think the industry, the auto industry the finance industry.
We've put ourselves in a great position controlling what we
can right CFPB, we responded to them. We're in a
(21:03):
good position. We've worked with them, we partnered with them,
the OCC we partner with them, FTC, you name it right,
We're ready and we can't control other things around us.
But I think that there's good news out there. I mean,
I'll give you one example of Watch the data you
get on you know, write sixty day delinquency. Read the
(21:23):
news it's all time high. Well, it's an all time high,
only only in six twenty or less, only in subprime.
Prime is actually performing better. So first you read it
the sky's falling, No peel it back the space that
a lot of folks play in, and the answer depends
to them what space you play. So if you're playing
(21:43):
in that subprime space, you're not feeling good. Yeah right,
But if you if you play outside of it, you're
in a good position. Portfolio is performing well. Unfortunately, consumer
confidence is slipping a little bit. Unemployment's good, but if
competence isn't there. But once again, these are things we
can't control. We can only control. An app just came
(22:06):
through the door from from a dealer partner of ours, right,
a good dealer, and we try to do the best
we can with that app yeah and go forward.
Speaker 1 (22:14):
Yeah, totally. And it seems in at least American culture,
like the car is such a part of the you know,
the experience of the car. Everyone remembers their first car,
and uh, you know, they just keep getting more expensive,
as you mentioned with evs and the components. So I
think financing, as far as I can see, is going
to be a component of that. But do you see
any of that changing in terms of how people think
(22:34):
of vehicles or use them, or would that change any
different creativity in financing other than again.
Speaker 2 (22:41):
I think I think I mentioned it earlier.
Speaker 3 (22:43):
Just the EV's brought brought a new new way of
kind of flack approaching the v's nice that will be
different than the combustion engine, but we've been we've seen
for many years. So the the the increase in demand
in subscription model which we've seen you know, in other
part of like what consumers are using, will most likely
(23:03):
make its way to to the auto industry at one point.
Speaker 2 (23:07):
And so.
Speaker 3 (23:10):
Flex flex flexible leasing nub of products will also kind
of like be increasing. I think I think we'll see
and you think about just like autonomous vehicles, type of
new type of technology also that most likely will do like.
Speaker 2 (23:29):
Sharing of totally changed the landscape.
Speaker 3 (23:34):
I will say that we're still hears away from from
from that type of trends. But but again, the one
of the positive things that happened with the TV players
the manufacturers that came is that they not only came
came up with new vehicles and we had to address
some of those challenges. But when you go beyond the
charging station and and now it's just bringings like a
(23:57):
new way of like thinking about the financing I mentioned earlier,
like how.
Speaker 2 (24:00):
Do you separate the battery to the vehicle in itself?
And do you like.
Speaker 3 (24:06):
We've seen in other part of in other countries where
literally clients will go to you know, service center, go
and swept the battery on the vehicles and just like
roll out like ten minutes later.
Speaker 2 (24:20):
It's it's it's will come. It's a matter of whene.
Speaker 1 (24:23):
Yeah, well, I think we're probably about out of time.
I could ask you to make predictions on tariffs or regulations,
but maybe we'll say that for another time. Maybe I
don't know what is there a dream car or a favorite
car you've had, like being in a space for a while,
like if you can have any car, is there one
on your list or maybe a favorite car you've owned
(24:44):
in the past.
Speaker 3 (24:48):
I would have to go, I will have to go, Evy,
And I had the opportunity to drive a couple of
times the Lucy the Hair which was you know, was
the car the year back in twenty twenty two. Uh yeah, true, true, truly,
truly a wonderful car. And so that's that's one of
the busy equivalent I rove for the last couple of years.
Speaker 4 (25:07):
So my best one was a seventy nine Corvette and
it was stolen in Westboro, Massachusetts. It paid for my
wedding and down payment on my house. So I I
cried when I lost the car, but it was it
was it was a good return.
Speaker 1 (25:21):
That seems like a good story behind that I'm at
it's a true story too cool.
Speaker 2 (25:27):
Well, thank you both, Thank you so much time. Thank
you for having you. Thank you
Hey everyone, Matt Snow again here from Upstart live from
CBA in Orlando, Florida, with Fabian Terry and Mike gilbert
there from the Auto Committee.
Speaker 2 (00:14):
Thanks for joining me, guys, Thank you for having us.
Speaker 1 (00:16):
Yes, absolutely, Why don't we get started by maybe some
personal introductions. Where you're working today?
Speaker 3 (00:21):
Absolutely so, Fabian Sierry So. I work for Bank of America.
I lead the Auto Consumer and Small Business organization. I've
been with the bank for seventeen years now and various
capacities and specifically for the CBA. I'm the chair of
the Auto Committee, and I'm peaced to be here.
Speaker 1 (00:41):
Great.
Speaker 2 (00:41):
Thank you.
Speaker 1 (00:42):
So.
Speaker 4 (00:42):
Mike Gilberton, co chair with Fabian and the Auto Committee,
currently an associated bank, been there since startup for their
indirect Auto September twenty one. Prior to that, twenty eight
years at Key Bank, and then an illustrious start in
this business at GMAC if you can call that name. Yeah,
So happy to be here.
Speaker 1 (01:01):
Great, Well, thanks guys. I know you know sometimes we've
talked with past gasts about getting into banking. Was that
a childhood dream or like, how did you get into
the banking world?
Speaker 3 (01:09):
Actually, my my background is actually in the auto space,
so as not even working for fold back in Europe, gotcha,
spent ten years with them various capacities, and then I
droned the banking industry when I moved to the US.
That was over seventeen years ago, and then more it was,
say like.
Speaker 2 (01:27):
Four years ago.
Speaker 3 (01:29):
I've been I've been eating but the auto division at
the bank. So it's kind of like full circle of
all my head.
Speaker 2 (01:34):
Exactly nice. How about you, Mike, Yes.
Speaker 4 (01:36):
Right out of college, hired a GMAC So it's all
I've ever known, all I've ever done, and all I've
ever loved.
Speaker 1 (01:42):
So yeah, great, and that's probably what's brought you both
to the committee. So maybe first, you know, describe a
little bit about the committee's role, how you ended up there,
and it's important importance within the CBA.
Speaker 2 (01:53):
Do you want to go?
Speaker 4 (01:55):
So yeah, I mean it's if you're interested and you
want to engage, which obviously the two of us here
we were definitely interested. It's a passion something we love.
And then we're engaged you would like to participate, like
a dig into things like to just be a member
of the committee. And then obviously the more vocal we are,
the more you want to kind of not take charge,
(02:16):
but just take some ownership. You kind of elevate to
these two positions where you've you've got extra responsibilities and duties.
But it's fun. It's not work right, so's it's a joy.
It's a pleasure to work with and partner with twenty
five other auto lenders. We're competitors, but we're respectful, we're friends.
So it's a great group that we're part of.
Speaker 2 (02:39):
It's a great group of PIO.
Speaker 3 (02:40):
What Mike was saying, I think we just had the
opportunity to be working. We've community members that are very
passionate and knowledgeable. We all want the same thing. We
want to serve our customers. We know and understand THEOTWO industry,
and so we have the portunity on a monthly business
to be meeting as a committee cover everything from regulatory
(03:02):
to you know, new industry trends. Obviously, with the involvement
of the the CBA, we're able to get connectivity through
having like different you know, players vendors coming and talking
to us about the challenges, what they're seeing, and more importantly,
how can we keep moving the industry forward. And so
as as the share and the co chair Mike and
(03:24):
I had the opportunity to be you know, interacting with
all the bankers and regardless of the size of the banks,
we we kind of like we have a common agenda
and we're trying to do the.
Speaker 2 (03:34):
Best for our customers. Yeah.
Speaker 1 (03:35):
Great, it must be something you enjoy if you're giving
up four hours of a weekend to come and chat
about these things and meetings together and multiple sessions throughout.
What are some of the common maybe concerns of members
today are addressing.
Speaker 3 (03:48):
Yeah, regulatory has been front end center for the last
couple of years, so we spent a lot of time
talking about you know, regulatory agencies and and and what
it means for the industry from the dealer side as
well as from the consumer impact on the banks. We
talk about just some of the you know, gap refunds,
(04:11):
insurance refund to a lot of the topics that the
CFPB had on their agenda. Those are the type of
topics that we discuss as as you know with the
with the rest of the of the bank partners the
rest will be more centric around fraud. I would say
it has been kind of like maybe a topic that
has been growing. Unfortunately, spent a lot of time talking
(04:34):
about what it means, what we're saying, and how we
can combat fraud and so again leveraging partners and solution.
Speaker 2 (04:43):
Across the industry to try to advise that issue. And
the last one, Mike, I think it's just more like
industry trains what we're saying from like more the topic
that drives the market forward.
Speaker 3 (04:56):
So electric vehicle was was one topic that we spend
a lot of time covering in our committee.
Speaker 2 (05:03):
Anything else that you can think.
Speaker 4 (05:05):
About, yeah, I mean it's all it's front and center,
it's top of mine in real time. So Fabian and
I do a good job. I'll give us both credit.
As soon as something comes out. It's the State of
New York Attorney General came out with, you know, trying
to form a CFPB. That was out to the members
within thirty minutes when that was released. So that's just
one example. As soon as something hits, we put it
out for everyone, and then when we get together either
(05:26):
in person or once a month on our team's call,
we revisit it, We talk about it, try to drill
into more than Okay, anybody can read the article, right,
so what does it really? What's it mean? What's it mean?
And how do we take what it means and put
it in practice? How do we act on it? Not
act on it? I mean decho a little bit about
what Faban mentioned right, regulatory CFPB. You know, we all
(05:47):
know we've dealt with supervisory highlights. It wasn't the rule
of how you should have followed things some people believe.
But nonetheless, you know, where does the CFPB sit now?
What does it mean for us? How are we digesting that?
What will happen? You know, you try to crystal ball it.
If the CFPB isn't in its current state, are the
(06:09):
states going to come out? What would those look like?
If you have a national lender, right, and the national
lender now has to deal with twenty versions of a CFPB,
what's that look like? Is it easier just to deal
with one versus twenty? So these are things we talked about,
Like I said yesterday, Fraudy mentioned, but it's what we
kind of deep dive into. We don't share trade secrets,
(06:32):
but yeah, best practices and it's good to just hear
real time what other folks see around all those topics,
and there's a lot of them.
Speaker 1 (06:40):
Yeah, I was going to say that's probably now more
than ever an important role for the committee with the
pace of change, the uncertainty the state level you mentioned
is another dimension. Just trying to share the awareness, let
alone best practices like just get any information out there
would be important. Absolutely, how do you stay on top
of those things or get the information?
Speaker 3 (07:02):
Yeah, I mean think about so again I will on
the regulatory side, just we obviously stay very close to
to what's happening, not only at the CBA, but we.
Speaker 2 (07:12):
Also leverage other trade organization after.
Speaker 3 (07:16):
NDA to kind of like again just to get get
get the information. In the end of our members, it's
it's that it's about communication and transparency. So regulatory is
definitely one one one topic. But just to answer your question,
also think about just also the all the digital transformation
that is happening in the other space. But that is
(07:37):
also something that that week over I talk about just
the importance of bringing a third party coming to.
Speaker 2 (07:43):
Talk to us.
Speaker 3 (07:44):
Was our experts in the field are trying to kind
of have those digital tools that help solving.
Speaker 2 (07:48):
Some of those issues and gaps. Some Yesterday, the conversation.
Speaker 3 (07:52):
During the the CBA event a committee that we were
we were running, we talk about throw that length and
we talk about you know, all the f NI products
and and and the charges and how to stay on
top of it. There's a lot of activities going to
that space. There's players there, the planes that are trying
to solve it. So bringing was was was players in
(08:14):
front of the committee. Having open conversation where you have
pretty much representation of the entire landing community is extremely helpful.
Speaker 2 (08:22):
So that's that's that's that's that's what the community hope proc.
Speaker 1 (08:26):
Are you seeing innovation in any one specific space? Is
fraud something that people are focused on now? Is it
the experience of the dealership? Is it in the financing?
Like where where are you seeing like the most innovation
bubble up lately?
Speaker 3 (08:39):
So we it's I will say it's crossed the boat,
so we But it happened at different stages.
Speaker 2 (08:47):
So a couple of years back.
Speaker 3 (08:49):
We've seen maybe transformation from a digital standpoint happening at
the application level, so where clients were looking for like
digital ways of kind of like going through the process.
Then econtracting came forward on the indirectly on the direct side.
Then then new tools came through. We're talking about fraud
(09:12):
documentation capabilities where clients or dealership will be providing uploading
the dogs directly to avoid the back and for so
in other words, technology come in our space in different
waves at different time.
Speaker 2 (09:24):
But so some of the.
Speaker 3 (09:26):
Inefficiencies that have been existing for years, and it's been
it's been it's been kind of like actually very very
high opening to for us to kind of like push
push the agenda and see how with all the progress
that we've made as an industry for the last couple
of years, the last piece more more ready to kind
of like the collateral you know, you were talking about financing.
(09:47):
So it's it's very interesting kind of like we've seen
with the entrance of electric vehicles, we've seen also kind
of like the model being challenged. So now we're starting
hearing from like a pure financing of the vehicle. You're
talking about charging station financing, you're talking about.
Speaker 2 (10:03):
Just subscription model.
Speaker 3 (10:04):
Right now, you're talking about manufacturers coming and thinking through
how do I separate the financing of the vehicle or
the financing of the battery. A lot of things how
happening in about space and it's in constant movement, so
we're staying on top of fot those trends as well.
Speaker 1 (10:18):
Gotcha. How about from the end consumer standpoint, like when
you're thinking about you know, customers the bank with associated
what are the things they're thinking about. Do they appreciate
like the level of complexity Fabian's talking about, or how
do they think about, you know, buying a car today
and coming to a bank for financing or that you
know through the dealer.
Speaker 2 (10:36):
Are they are they aware.
Speaker 1 (10:37):
Of the changes at this time?
Speaker 4 (10:39):
Yeah? I think most customers aren't. I mean, they read
what you can find out there in the press, but
they really don't know the intricacies behind the details that
we do. And they just they want to show up
at a car dealership point of sale. They want to
get there, pick out the car the options they want,
and leave with it timely and then make their payments
and move on. They really really don't know kind of
(11:01):
what Fabing had just framed up right, which is kind
of I call it the timeline of Originally somebody went
and applied for a loan, The lender looked at application data,
and you pull the credit report. Then you had a
credit report that had a fight Go score on it,
and you built the custom score, so then you had
a bankruptcy score that you could use. Then you have
a fraud score that you could use. Then you have
(11:23):
artificial intelligence that came in and started to look in
all kinds of this other data that you could layer
in on top of those just kind of core scores
to get to how do you make it? You know,
how do you make your decision? Then he mentioned collateral
you get into Okay, we just financed the car. Then
it was the core four back end, right, tirro and wheel,
prepaid maintenance gap, and a service contract. Now I can
(11:45):
sit here, We'll run out of time and list all
the things you can also add on top of that.
So it just gets more complex. The more complex it gets,
the more folks try to analyze it from a regulatory standpoint,
all the moving parts. It's it's evolved, some of it,
some of it good, some of it may be a
little fuzzy.
Speaker 3 (12:07):
But there's a need in the industry when you think
about this digitalization at different stage, we're realizing that in
order for the industry to provide better client experience and
to be more efficient general speaking, there's vire's a need
to uniform the way we collect data, the way that
data is transmitted from one provider to another. And that's
(12:30):
that's most likely why anticipate kind of like maybe the
next move to be from like going from call it
the paper to the electronic now trying to to to
to find a common.
Speaker 2 (12:39):
Way to pass the data.
Speaker 3 (12:41):
So the data that comes from the dealership will will
will be making our way to us lenders in in
in a similar fashion, I won't have like, you know,
ten different ways of like entering a field and creating
proper issues in the back end. And the same goes
on from like origination to service into collection.
Speaker 1 (13:01):
And do you think that's a reaction to open banking
and that rules are more more on the innovation side
and just trying to.
Speaker 2 (13:06):
More on the innovation side.
Speaker 3 (13:08):
Just simple the cycle of technology going through just again
it's the messy adoption trying to find efficiency in VAT.
Once you get the client going through that, now it's
the entire industry trying to look at the ways to
kind of like you know, better and more efficient ways
to kind of like from you.
Speaker 4 (13:24):
So I'll come in just so one of the fraud
So the fraudsters, they're smart, they're not stupid, right, So
I'd like to say they're smarter than me, so I
got to be I'll think in the room with them.
But yeah, they take the auto automation right, and we
want to be eighty ninety percent automation right, be efficient,
et cetera. And sometimes that comes at a cost because
if you're automating things, you're auto approving things, you're not
stopping things. So the fraudsters prey on that and use
(13:48):
that to their advantage. So you you've kind of always
got away your auto decisioning is an example, but I
want to dial that back a little bit to catch
some of this fraud. But then again, if you're slowing
down good deals to catch the one bad one. So
it's a definite struggle. We talked about that yesterday as well.
Speaker 1 (14:05):
Is there is there a formula to that or how
do people think about that? Generally, for every you know,
ten loans you approve, it's okay to have you know,
one bad one, Like.
Speaker 3 (14:15):
I don't think as a formula specifically. Obviously, depending on
your credit risk appetite and the size of your lending organization.
There's a lot of efficiencies that comes with, you know,
the automation and the tools that we just mentioned here
and that creates you know, literally you know, direct effect
on your bottom line. Now, like Max said, it's a
(14:37):
it's a ratio, it's a formula. But each financial institution
will have to solve for themselves. You know, due to
your size, you might be okay letting one or two
bad loans coming through. If you're a little smaller at
one or two bad loans, you want to catch earlier.
Speaker 2 (14:51):
And so so again, it's just like it's your risk.
Appetites is the way you generate. It will be very
different from one institution to another.
Speaker 4 (14:56):
Yeah, and I won't Yeah, I'll give you one example,
so perfect example. Economies of scale in size. We talked
about this yesterday. So if you apply for a loan,
we auto approve you, so everybody auto approves you. If
you go across the street you're shopping, some places will
not auto prove you. You'll dupe. It's a duplicate app
We look at, okay, is this customer trying to bust
out why they're trying to finance two cars? Well he's
(15:17):
just looking at this camera here and a camera cos yeah,
we'll buy him. We manually approve them. A lot of
folks will just automatically reapprove you again and again and again.
They won't stop that process. So what could happen? You
accept the risk you could finance ten cars eight cars
bust out, and that happens. You can finance eight cars
for you and you're going to put them all on
(15:38):
Turo and lease them out. So the economy of scale
that we would lose by not doing that is we
have to manually stop and say, okay, here's eighty deals
where the customer was trading in the car. They're legit,
but look at the ones we caught through a little fuzzy.
The other side is a lender may say it's acceptable risk.
We're not going to stop that automation for the couple
(15:59):
that we might get burned on. So it's a it's
a trade off as long as you understand that, yeah,
I think that's that's probably the most important thing, and
then you just solve for it and say do it
this way or do it the other way?
Speaker 2 (16:10):
Is it?
Speaker 1 (16:10):
Is it more of that type of fraud or what
are people more worried about? You know, especially with some
of the AI tools, you think about deep fake and
like how do you automate or even if you wanted
to phone call somebody or you know, try to even
manually intervene in a limited way. Are fraudsters more advanced
in some of those or is it just a lot
of you know, more first first party fraud.
Speaker 3 (16:29):
First party fraud, I think is what we're seeing the
most again just for for your audience. Those those are
you know, effect social security numbers behind a real person
and and and that that individual is used to kind
of like you know, go through application of of loans,
(16:52):
and that's what we're seeing. But to your comment, I
think this is the most important. Is that is getting
more and more sophisticated, requiring every one of you know,
the members at CBA to pay and keep.
Speaker 2 (17:04):
On investing invet space.
Speaker 3 (17:05):
So this is where we rely on tools, best practices,
share off information as well, try to combat troat. It's
becoming faster to your point with the if you're totally
aering AI on top of this, yes, it can be
created very fast.
Speaker 1 (17:19):
Yeah. And is it only something that can really be
prevented by every lender, every dealer, like at each point
of entry or is there any centralized way to stop
some of this that everyone can benefit from.
Speaker 4 (17:31):
So you can do a consortium and there's there's third parties.
I won't name them right, there's several that they do
a consortium that as soon as I catch fraud, I
reported the consortium so that if somebody gets an app
the next second, they'll know, so you can go to
the consortium route third party providers. But what unfortunately, or
I guess fortunately for us, Unfortunately for dealers dealers, by
(17:53):
virtue of our dealer agreement, if we catch fraud on
the back end, it's unfortunate. But they kind of a check.
They have tricks and devices through their insurance company. But
really they're really the ones that that identity fraud, the
fake ID, the fake driver's license, the meal somebody hired
somebody to come in. I'm right here in Florida has
I think it's the biggest one so far. Over three
(18:15):
hundred cars through that fraud ring. And of course they
were all delivered through dealers. All the dealers are technically
on the hook, but you know, so they're partners of ours.
We try to catch stuff to at our end, but
ultimately they're as far as red flag rules, you're familiar
with those, you know, they're bounded by those, just like
a bank is.
Speaker 1 (18:34):
Well, maybe enough on the scary topics like what are
the things you guys are excited about in this space,
like what are the things you see innovation again that
maybe benefits consumers, dealers, lenders that are coming up.
Speaker 3 (18:47):
Yeah, I mean one of the best, the biggest challenges
that we had, I will stop you about just to
go on the bright side of innovation. But a BTV
has been like a key concern for the last couple
of years. Obviously, we've seen you know, price plus COVID,
we've seen parts of vehicles on the use on you
going high created some challenges right environment being where it was,
So I think going forward you kind of look look
(19:09):
at that picture and hope for an opportunity for those
clients to refinance. It's been also very lease heavy again
just to address the affordability component. So I think you're
going to see that mix between lee's and purchase kind
of like rebalance itself.
Speaker 2 (19:24):
For lenders.
Speaker 3 (19:25):
It provide opportunities as well to kind of like you know,
keep those clients within within their portfolios, so you know,
you know, you can refinance to lise, buy out, and
and again provide provide the solution for for your clients.
Speaker 2 (19:39):
So I think we have.
Speaker 3 (19:41):
We have a lot of bridays in front of us.
I will just what I get excited about is just
like really kind of like when you think about the
auto experience that Mike was mentioning all the way off
from other as lenders. Either you you you only in
the end direct side and you work for your dealer network,
(20:01):
or you have also what we call client direct where
you provide financing solution for your clients. We were has
a lot of opportunities in the space to kind of
like revisit that client experience, find a pinpoints, address them
through through automation, through new tools that will make that
that experience better altogether. And we want to continue that
(20:24):
partnership with our dealers at the same time as a
find find financial institutions. We are here to provide like
the best client experience whatsoever. So we're here to provide
financing solutions and and and create that seamless integration with
the dealers.
Speaker 4 (20:40):
Mike, Yeah, I mean, I mean we're we've I think
the auto industry everyone's poised well, throw out recession threat,
throw out a terriff. I mean we can't control that stuff.
I think the industry, the auto industry the finance industry.
We've put ourselves in a great position controlling what we
can right CFPB, we responded to them. We're in a
(21:03):
good position. We've worked with them, we partnered with them,
the OCC we partner with them, FTC, you name it right,
We're ready and we can't control other things around us.
But I think that there's good news out there. I mean,
I'll give you one example of Watch the data you
get on you know, write sixty day delinquency. Read the
(21:23):
news it's all time high. Well, it's an all time high,
only only in six twenty or less, only in subprime.
Prime is actually performing better. So first you read it
the sky's falling, No peel it back the space that
a lot of folks play in, and the answer depends
to them what space you play. So if you're playing
(21:43):
in that subprime space, you're not feeling good. Yeah right,
But if you if you play outside of it, you're
in a good position. Portfolio is performing well. Unfortunately, consumer
confidence is slipping a little bit. Unemployment's good, but if
competence isn't there. But once again, these are things we
can't control. We can only control. An app just came
(22:06):
through the door from from a dealer partner of ours, right,
a good dealer, and we try to do the best
we can with that app yeah and go forward.
Speaker 1 (22:14):
Yeah, totally. And it seems in at least American culture,
like the car is such a part of the you know,
the experience of the car. Everyone remembers their first car,
and uh, you know, they just keep getting more expensive,
as you mentioned with evs and the components. So I
think financing, as far as I can see, is going
to be a component of that. But do you see
any of that changing in terms of how people think
(22:34):
of vehicles or use them, or would that change any
different creativity in financing other than again.
Speaker 2 (22:41):
I think I think I mentioned it earlier.
Speaker 3 (22:43):
Just the EV's brought brought a new new way of
kind of flack approaching the v's nice that will be
different than the combustion engine, but we've been we've seen
for many years. So the the the increase in demand
in subscription model which we've seen you know, in other
part of like what consumers are using, will most likely
(23:03):
make its way to to the auto industry at one point.
Speaker 2 (23:07):
And so.
Speaker 3 (23:10):
Flex flex flexible leasing nub of products will also kind
of like be increasing. I think I think we'll see
and you think about just like autonomous vehicles, type of
new type of technology also that most likely will do like.
Speaker 2 (23:29):
Sharing of totally changed the landscape.
Speaker 3 (23:34):
I will say that we're still hears away from from
from that type of trends. But but again, the one
of the positive things that happened with the TV players
the manufacturers that came is that they not only came
came up with new vehicles and we had to address
some of those challenges. But when you go beyond the
charging station and and now it's just bringings like a
(23:57):
new way of like thinking about the financing I mentioned earlier,
like how.
Speaker 2 (24:00):
Do you separate the battery to the vehicle in itself?
And do you like.
Speaker 3 (24:06):
We've seen in other part of in other countries where
literally clients will go to you know, service center, go
and swept the battery on the vehicles and just like
roll out like ten minutes later.
Speaker 2 (24:20):
It's it's it's will come. It's a matter of whene.
Speaker 1 (24:23):
Yeah, well, I think we're probably about out of time.
I could ask you to make predictions on tariffs or regulations,
but maybe we'll say that for another time. Maybe I
don't know what is there a dream car or a favorite
car you've had, like being in a space for a while,
like if you can have any car, is there one
on your list or maybe a favorite car you've owned
(24:44):
in the past.
Speaker 3 (24:48):
I would have to go, I will have to go, Evy,
And I had the opportunity to drive a couple of
times the Lucy the Hair which was you know, was
the car the year back in twenty twenty two. Uh yeah, true, true, truly,
truly a wonderful car. And so that's that's one of
the busy equivalent I rove for the last couple of years.
Speaker 4 (25:07):
So my best one was a seventy nine Corvette and
it was stolen in Westboro, Massachusetts. It paid for my
wedding and down payment on my house. So I I
cried when I lost the car, but it was it
was it was a good return.
Speaker 1 (25:21):
That seems like a good story behind that I'm at
it's a true story too cool.
Speaker 2 (25:27):
Well, thank you both, Thank you so much time. Thank
you for having you. Thank you
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Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies!
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!