We are working on adding CIP provisions to our auto dealers indirect lending agreements. What do most banks require of the dealer with regards to CIP besides gathering the minimum required information and documantation (ie name, DOB, address, ID number).

In my own personal opinion CIP is not efficiently done once we have the loan in our hands because we are not the ones who dealt with the customer and had the customer personnaly in front of us...the dealer did and I feel they should do the IDV checks and resolve any discrepancies.

I know it is ultimately up to us what we want the dealer to do as long as it is spelled out in the agreement but I just wanted to get a feel as to what the industry standared is.

One step is to provide the CIP notice. You can incorporate into the forms or make it the first page they hand to the prospective client.

Since a bank rep is not present, the forms should walk through the documentation process and the forms should be completely filled out prior to submission. As you stated, the expectations should be in your contract with the dealer. You should periodically test to ensure compliance.

The CIP notice has been used by the dealer for some time now and all of the proper info has been gathered at application but actually verifying that info is not done until we get the loan to book. After we get it there are address discrepancies and ssn discrepancies, etc and we have to go back to the dealer to get with the customer to obtain further documentation to verify the information originally gathered.

I know this has nothing to do with CIP but, to make things even worse the dealer just seems to ignore any alerts or red flags on the credit report that they pull...so we need to incorporate the red flag rules into their agreement as well.

I would really appreciate a model agreement or some sort of verbiage as guidance for these type of indirect lenders that includes CIP and Red Flags.

What a nightmare...