Legal Seminar

Extensions, Deferrals, Other Accommodations • Voluntary implementation of accommodations is widespread, including with those who may refuse contact: – Programs are designed with an eye toward maintaining status quo • Auto: Keep the customer in the vehicle where possible and avoid acceleration or repossession • Unsecured Consumer: Allow customers time to get back to work – Permitted fees are typically waived • Deferrals and extensions also used to help bring the customer current, having positive credit reporting implications • Continued mandates should be considered with care as they may have unintended consequences

Leasing Considerations in Auto Finance • Vehicle lease costs are based on the lease term and expected depreciation • Lease return process – Leases may be subject to holdover (i.e., extension) at the consumer’s option – Traditional lease return occurs through the dealer sales process • COVID created some unique challenges – Dealer sales operations were largely closed, affecting returns and consumers’ ability to obtain a new vehicle – Many in the industry offered automatic extensions, subject to consumer decline – Some implemented at-home pickup • Post-lease sales were impacted, affecting ability to sell and sale values • Implications of inability to repossess on disclosure requirements