AI - training computer systems to be able to perform tasks that normally require human intelligence
Ancillary Products - An add-on purchase when buying a product. Guaranteed Asset Protection (GAP) and extended warranties are the most popular ancillary products for car buyers.
Auto lending - Auto Lending is the process of applying for a loan to finance the purchase of a car.
Automated document processing - a machine learning model to extract data from documents.
Business process management (BPM) - the discipline of using various methods to discover, model, analyze, measure, improve, optimize, and automate business processes.
Community Reinvestment Act - The CRA was enacted in 1977. It requires the Federal Reserve and other regulators to encourage lenders to meet the credit needs of their communities. This includes low- and moderate-income (LMI) neighborhoods.
Compliance - conforming to a rule, such as a specification, policy, standard or law.
Consumer Financial Protection Bureau (CFPB) - The CFPB is a U.S. government agency that makes sure you're treated fairly by banks, lenders and financial institutions.
Consumer Lending - A category of financing centered on individual and household consumers. It includes home and auto loans, as well as personal loans.
Contract in Transit - a receivable from the auto lender that contracted the sale of the car; however the cash has not yet been received by the dealer.
Digital Transformation - the adoption of digital technology as part of change management in an organization. Common reasons to undertake an initiative are to improve efficiency, value or innovation.
Disparate Impact - an adverse effect of practice or standard that is neutral and non-discriminatory in its intention. But, it disproportionately affects individuals having a disability or in particular groups based on age, ethnicity, race or gender.
Dodd Frank Act Section 1033 - Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act states the following, subject to the CFPB. A lender must make available to consumers, information concerning the product or service the consumer obtained from the provider.
E-Contracting - loan contracts generated digitally, which typically speeds the financing process.
Employment verification - the process of verifying a consumer's employment status using documents including W2s, paystubs, Military LES and SSI award letters.
Equipment financing - Loans that finance equipment which can be vehicles, factory machines, farming vehicles or any other equipment.
Financial statement fraud - deliberate misrepresentation of finances to deceive a lender, to access more credit and/or better terms than they actually qualify for.
Funding Process - Also known as the Loan Origination process usually (but not always) consists of six steps. The steps are: Pre-Qualification, Loan Application, Application Processing, Underwriting,Credit Decisioning, Loan Funding.
Guaranteed Asset Protection Contract (GAP Contract or Waiver) - A gap contract is a debt cancellation agreement which absolves you from paying the difference between what you owe on the vehicle and what it's worth if the vehicle is declared a total loss. A GAP Waiver is an "add on" or ancillary product you can purchase with your auto loan or lease.
HELOC - A Home Equity Line of Credit is also known as a HELOC. It's a line of credit secured by your home, giving you a revolving credit line. HELOCs are used for large expenses or consolidation of higher-interest rate debt on other loans such as credit cards. A HELOC often has a lower interest rate than some other common types of loans, and the interest may be tax deductible.
Human error - natural mistakes made by people undertaking repetitive tasks
Human-in-the-Loop - Using humans to double check and validate results of OCR and/or machine learning models.This adds cost and time to the data collection process.
Identity fraud - when an individual presents themselves as someone else using stolen, fraudulent or forged documents.
Income Verification - Proving your income to demonstrate eligibility for a loan. Generally this is accomplished by providing a paystub, W2, bank statement, military LES, or SSI award letter.
Loan origination system (LOS) - software that automates and manages the entire loan process. Beginning with the application, to underwriting, approval, pricing and funding.
Loan stacking - the process if of getting approved for multiple loans or lines of credit at the same time in order to reach some financial goal.
Machine learning - a type of artificial intelligence allowing software to become more accurate at predicting outcomes without being explicitly programmed to. Machine learning algorithms use historical data as input to predict new output values.
Optical character recognition (OCR) - a technology enabling computers to “read” text off of documents and turn it into into machine-readable data.It is usually priced per page and can be riddled with mistakes.
Origination - the process of a borrower applying for a loan and a lender processing the application. Origination totals can be either a dollar value or the number of loan contracts.
Regulatory Compliance - Regulatory compliance is an organization's adherence to laws, regulations, guidelines and specifications relevant to its business processes.
Robotic process automation (RPA) - the process of designing software to do human tasks. This helps lenders accelerate the lending process and significantly increase revenue.
Underwriting - the process by which an institution assesses the riskiness of a potential applicant before extending credit.
Underwriting process - in the lending process the lender verifies the individuals income, assets, debt, credit and property to determine their eligibility.