Here's the scenario: Customer buys a car at dealership and uses Ford financing to get the big rebate. Deal is done at a higher rate but the dealership tells the customer to come back in a month and "refinance" the loan through the dealership who will run it through their indirect lender (the bank) for a lower rate. The bank is paying a fee to the dealership for sending the refinance their way. We're being approached by dealerships through our indirect department to do this. Their claim is that other banks are doing it. (We're one of the bigger indirect programs in our market). We would pay the dealer a fee and it would not be passed to the borrower.

What compliance concerns or issues would there be with something like this?

Ford finds out and they will figure it out eventually, then these guys risk losing their dealerships. Not sure why you are involved in an indirect vehicle refinance program however and spiffing the dealerships - that is a little bit of an unusual indirect program. If there is criminality involved, are you culpable since you are a willing and knowing participant? Might want to run it by your legal counsel as it sounds like fraud to me.

"Might want to run it by your legal counsel as it sounds like fraud to me."

Not only your legal council but also your state's Dept. of Finance. How can you do "indirect" financing through a dealer on vehicles the dealer does not own?