Consumer Finance Organization Structure

Consumer Finance Organizational Structure Outline

  • Consumer Finance

    Consumer Finance companies offer services also typically offered by banks, including mortgages, consumer loans (car, personal and student loans) and credit cards. Consumer Finance has also grown to include payment processing services, such as PayPal and Square.
    Who is in charge? Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief Financial Officer (CFO)
  • Lines of Business
    Lines of Business (LOB) refers to specific products and services offered by the financial institution (usually a bank) to an individual. Major LOBs typically including Consumer Lending, Mortgage Lending, Credit Cards, Payments & Transfers and Merchant Services. Employees working within these front office areas are responsible for developing and pricing these products/services, generating new business and managing client relationships. LOBs are supported by back office staff members, who work to perform non-customer-facing tasks such as loan processing, transaction processing (deposits, withdrawals, etc.), fraud prevention and credit review.
    Common Lines of Business job titles: Loan Officer, Investment Specialist, Financial Advisor

    Lines of Business / Consumer Lending

    The Consumer Lending Group is responsible for originating consumer loans (not including mortgages). Borrower applications must be inspected and reviewed thoroughly in order to make sure that risk is managed properly. Consumer loan officers and sales representatives consult perspective borrowers on loan solutions and collect applications and related information. The Consumer Loan Operations function receives information from borrowers and loan officers and processes the loan (underwriting, closing, etc.) in accordance with the financial institution's (usually a bank) standards. After a loan is closed, loan servicing and customer relationship managers work with borrowers to process loan payments, change loan information and answer any questions related to their loan. Consumer loans typically include auto loans, personal loans and student loans.
    Common Consumer Lending job titles: Consumer Loan Officer, Personal Loan Consultant, Consumer Lending Sales Representative, Personal Banker

    Lines of Business / Credit Cards

    The Credit Cards line of business encompasses all products related to both retail and commercial credit cards. They develop, design, issue and service credit card-related products. In most cases, financial institutions (usually banks) use a third-party to process and perform credit card transactions (VISA, American Express, Discover, MasterCard, etc.) - these companies act as a middle man between the buyer and seller. Banks and other financial institutions generate revenue through issuing credit cards and collecting interest, monthly/yearly service fees and payment processing fees. In the United States, the Automated Clearing House (ACH) network enables all electronic financial transactions.
    Common Credit Cards job titles: Processing Specialist, Credit Card Risk Analyst, Teller, Card Services Operations Advisor

    Lines of Business / Merchant Services

    The Merchant Services function offers business customers a secure (encrypted) channel through which to process credit and debit card payments. Banks and other financial institutions allow businesses to deposit these payments directly into their accounts in a timely fashion and take a small processing fee out of each transaction. Other complementary products/services offered by the Merchant Services function include gift card/rewards program management, point-of-sale (POS) equipment purchasing, online/mobile payment systems, fraud monitoring and online sales analytics.
    Common Merchant Services job titles: Merchant Services Sales Representative, Merchant Services Client Representative, Merchant Retention Specialist, Transaction Analyst

    Lines of Business / Mortgage Lending

    The Mortgage Lending Group is responsible for originating mortgage loans for retail (i.e., individuals or families) clients. Mortgage lending sales staff members work with borrowers to assess their eligibility and collect any personal information required to process the mortgage application (W-2 forms, tax returns, account statements, etc.). After the application is submitted, appraisals, credit reports and other inspections are performed so that the Underwriting Group can make a decision on the application (approve/deny/counter). If the mortgage application is approved by underwriting and closed, mortgage loan servicing and account managers work with borrowers to process mortgage payments, change account information and answer any questions related to their mortgage. Mortgage lending groups may also work with correspondent lenders to source applications and/or sell mortgages on the secondary market.
    Common Mortgage Lending job titles: Mortgage Loan Officer, Mortgage Lender, Mortgage Loan Servicing Specialist, Mortgage Analyst, Underwriter

    Lines of Business / Payments and Transfers

    The Payments and Transfers function manages consumer payments and money transfers through physical (in-person or mail) and online platforms (wires, bill pay, etc.). Usually originating from an individual, this function allows consumers to safely send bills (one time bills or recurring payments), receive payments and transfer funds to accounts at other financial institutions. Though banks and financial institutions still offer physical methods to transfer funds and make payments, this function has moved towards greater dominance in online services through the use of Bill Pay and other related platforms.
    Common Payments and Transfers job titles: Teller, Account Service Operations Analyst, Wire Transfer Specialist, Cash Management Specialist
  • Back Office Operations
    Back office operations refers to a set of essential non-customer-facing administrative and support services. The back office is responsible for managing several activities such as credit operations, loan operations, loan servicing and fraud prevention and management.
    Common Back Office Operations job titles: Operations Specialist/Analyst, Customer Service Representative, Banking Service Representative, Deposit Operations Associate

    Back Office Operations / Credit Operations

    The Credit Operations function is responsible for reviewing all credit-related relationships (consumer loans, credit cards, mortgages, commercial loans, construction loans, etc.), establishing controls to mitigate the organization's (usually a bank) risk and monitoring the organization's portfolio of loans (and other credit-related products). Credit Operations staff members support loan underwriters, originators and processors in making credit decisions, providing tools and documentation to assist in the review of loan documents and documentation. They also put in place controls to ensure that the proper documentation is collected, reviewed and stored in the company’s loan servicing system for future review and maintenance (i.e., quality control). After the closure of a loan, Credit Operations staff members will review the organization's loan portfolio to determine credit risk and produce reports to management detailing portfolio performance and health - many times, these reports determine future underwriting requirements and guidelines.
    Common Credit Operations job titles: Credit Analyst, Credit Compliance Specialist, Credit Specialist, Credit Operations Specialist, Loan Documentation Specialist

    Back Office Operations / Fraud Prevention & Management

    The Fraud Prevention & Management Group is responsible for ensuring all organizations within the bank or financial institution are abiding by all standards, rules and regulations set by industry governing bodies, providing support and advice for business units throughout the company. Common tasks performed by the Consumer Finance Fraud Prevention & Management Group include know your customer (KYC) analysis, anti-money laundering (AML) activities and financial crime monitoring/investigation.
    Common Fraud Prevention & Management job titles: Compliance Officer, Compliance Specialist/Analyst, Fraud Prevention Specialist

    Back Office Operations / Loan Operations

    The Loan Operations function is responsible for all tasks between the submission of a loan application and the final funding (pending approval) of a loan. The steps between include application processing, underwriting (approval or denial of loan application), closing and post-closing. The main purpose of this step is to evaluate the prospective borrower's credit-worthiness (i.e., risk level) to determine if the financial institution (usually a bank) should lend to them, and if so, what the terms of the loan should be. After the loan has been processed, approved and funded, the borrowers work with the loan servicing function to process payments, update account information and answer any questions related to the terms of the mortgage. This group may be split up based on loan type - mortgages, consumer loans (auto, personal, home equity, etc.) and commercial loans.
    Common Loan Operations job titles: Loan Originator, Loan Operations Specialist, Loan Closing Specialist, Loan Processor, Underwriter, Loan Support Specialist

    Back Office Operations / Loan Servicing

    The Loan Servicing Group deals with all communication between the borrower and the lender after the approval and initial loan fund dispersal (after closing). They collect payments, help the borrower with repayment plans or loan consolidation and assist with other customer service-related tasks (address change, billing questions, payment statements, etc.) during the life of a loan. Mortgage servicers are compensated with servicing fees, generally a small percentage (less than 1%) of the remaining principal balance on the loan each month. When loans move into default, Loan Servicing employees may work with the borrower to adjust payment schedules and avoid foreclosure or further action.
    Common Loan Servicing job titles: Mortgage Servicing Specialist, Consumer Loan Servicing Specialist, Commercial Loan Administrator, Escrow Loan Servicing Analyst

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