CHICAGO -- Finance professionals discussed e-contracting, legal developments, auto loan securitizations, dealer participation fees, new employment laws and more at the National Automotive Finance Association's 8th annual conference on nonprime financing. Held June 16-18 in Chicago, over 300 dealership and finance company representatives attended the meeting.

A main purpose of the conference is to inform the industry of trends and changes, said Jack Tracey, the Association's executive director.

Peter Brandow, a veteran dealer with several stores in the Northeast, offered a dealer's perspective on special finance. When finding new dealer-customers, nonprime companies should look for dealers who don't see subprime as "premium-priced financing for desperate dealers and lenders," said Brandow. A good dealer will have lower-than-expected employee turnover, process management that involves outside resources (such as associations and consultants) and auditing "with teeth" -- in other words, auditors who aren't linked to sales. A quality dealer has accounting and pay plans that reflect solid philosophies, not desperate profit goals.

In another session, Mark Floyd, chief operating officer of AmeriCredit, told the story of how the second largest subprime lender recovered from near financial ruin in just one year. The company faced a serious cash flow crisis. So, in January 2003, it dramatically reduced loan volume and tightened operations to preserve capital and liquidity and to improve credit. It went from a loan volume of $2.4 billion quarterly to $750 million, closed many offices and tightened credit standards. The plan worked; today AmeriCredit has a healthy cash flow and is again growing its business.

A few sessions covered the many legal developments that affect both lenders and dealers. A session on the future of electronic contracting discussed the importance integration with dealer management systems.

"Without DMS integration, I think e-contracting will be much further off than it would be with it," said Mike Jurecki, president and chief executive officer of RouteOne.

Vince Passione, chief operating officer of DealerTrack, said e-contracting system providers will "find success if you emulate the paper process as much as possible."

The conference closed with sessions on remarketing repo vehicles and identity theft.