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Q&A: Dealer Services Execs Plot Course for New Wells Fargo

March 05, 2010

On March 20, Wachovia Dealer Services will officially become Wells Fargo Dealer Services. Founded as an independent lending company by Westcorp in 1973, the auto finance unit was inherited by Wells Fargo when it purchased Wachovia in December 2008. As it stands on the verge of its fifth name change, few could blame the auto finance unit if it were to suffer from an identity crisis. As it turns out, the opposite is true.

Last year, Wachovia Dealers Services held the highest market share for used-vehicle loan originations. It was listed No. 1 on Experian Automotive’s list of top subprime auto lenders. The company also helped lead the drive to rebuild the floorplan financing market and was instrumental in bringing liquidity to the marketplace by securitizing loan portfolios — even those originated by its competitors.

Company executives will work to add to the record of success for the company that went from an independent lender under Westcorp to Western Consumer Service Corp. in 1988, then to WFS Financial in 1990, and to Wachovia in September 2005. Wells Fargo completed its purchase of the company on Dec. 31, 2008.

Leading the charge for the new Wells Fargo Dealer Services group is Tom Wolfe. He is no stranger to change, having first joined WFS Financial in 1998. He was named chief executive in 2000 and was picked to head the auto finance unit when it was purchased by Wachovia before being named chief executive in 2000.

Joining Wolfe are some familiar faces, including Jerry Bowen, the former exec of Wachovia’s commercial lending business, and Bill Katafias, who served as Wolfe’s national production manager of the indirect lending unit from their days at WFS Financial. The three lending pros sat down with F&I’s Gregory Arroyo at the recent National Automobile Dealers Association Convention & Expo in Orlando to talk about what the name change means.

F&I: It’s obvious by your business unit’s activity last year that not much has changed since it was purchased by Wells Fargo. And I think it was you, Tom, who said at our conference last year that Wells Fargo was adopting the indirect and commercial financing model you headed up at Wachovia. Can you talk about what the combination of Wells Fargo and Wachovia means to dealers?

Wolfe: Just think about it in terms of the different platforms we have. There’s the old WFS platform, then we enhanced our offering with prime lending when we merged with Wachovia. Wachovia also had a commercial book of business that Jerry ran, which has now been combined with Wells Fargo’s commercial book of business. So Jerry now runs a nationwide commercial book of business. We also have GE Warranty – Warranty Services, which we added a couple of years ago to round out our offering. That line of business operates today as Warranty Solutions.

Wells Fargo also has a business called Strategic Auto Investments, where we create private securitizations, which allows us to create liquidity in the marketplace. So, if you look at our commitment to the industry — we support the commercial side, the indirect side, dealers through aftermarket products, and then we buy loans from other lenders to keep liquidity in the marketplace — you can see that we’re probably one of most vested companies in the auto finance industry.

F&I: From what I understand, much of the integration of Wachovia into Wells Fargo has taken place behind the scenes. But with the name change being one of the more visible steps, is there anything you’re doing specifically to commemorate Wachovia’s official integration into Wachovia?

Wolfe: We have been communicating with our dealers to let them know what is coming. A lot of our communications with the dealer community has been handled by our internal sales force. Our dealer is our customer, so between Bill’s more than 200 sales reps and Jerry’s own team of sales reps, we’ve been in constant communication with dealers so they understand what is ahead. As for the end-borrower, since we just went through a name change from WFS Financial to Wachovia, we have a pretty good road map on how to get that done with minimal impact to our borrowers.

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