compliance fair lending • markup • documentation • controls
Compliance notes for indirect auto lending (dealer-facing)
Indirect lending can introduce fair lending and compliance risk, especially around pricing discretion, documentation standards, and exceptions. This is a high-level operational checklist (not legal advice).
If you do discretionary markups or dealer participation, you need clear policies, consistent application, and monitoring.
Work with counsel/compliance to align your process to your lenders and state rules.
Key themes
- Consistency beats creativity in pricing and exceptions.
- Document your reasons when you deviate from standard policies.
- Train your team and audit the output—not just the intent.
Operational controls dealers should consider
- Written pricing/participation policy: define caps, when exceptions are allowed, and who approves them.
- Exception log: capture the rationale, approval, and supporting documents.
- Uniform stip checklist: reduce “selective documentation” risk and funding delays.
- QA review: sample deals weekly to catch drift early.
- Training: refresh on disclosures, product presentation, and documentation standards.
Reference (regulatory background)
Background materials exist on how indirect lending structures work and how pricing discretion can create risk. These references are informational only.