American General Finance – “Complacent”

Pros

I think that it is a good place to get exposure to the business, learn about lending, retail finance, credit, underwriting, etc.

Cons

While other reviews bash the company for its rates, etc. What company doesn't take steps to maximize profitability? However, there is absolutely no consistency in charging a given rate based on other parameters. There are rate grids, but there are always exceptions (up and down). It is all in the profitability matrix, we lend to higher risk customers, have a higher probability of default and charge higher rates to compensate for it. We all know no one holds a gun to the customers head and forces the customers to sign.

What I don't like is, as of late, the company (owned by AIG) has experienced numerous operational problems, high rates of default, and there had been a lot of question raised about if the company was going to be able to continue operating. There has been absolutely zero transparency from upper management through to the employees regarding the direction of the company and our ability and chances to survive. The lending guidelines have significantly changed and it is extremely difficult to grow (increase receivables by making new loans at a faster rate than taking liquidations and writing off nonperforming loans). The bonus structure for a branch manager is based on not only low delinquency but also a high net operating profit for the branch as well as the ability to grow a certain amount quarterly. With the recent changes in operations, the bonus is nearly an unattainable goal. Without the bonus available and achievable for the Branch Managers, the $50k (plus or minus) base salary is hardly worth the stress, time, and effort required of the position. Especially now that upper management are reducing the number of employees per branch and requiring expanded hours of work from branch staff to collect delinquent loans on late evening nights and weekend days.

Things have changed a lot and until changes are made to improve the working conditions, I would have to recommend employees to come on board as a sponge, absorb as much as they can to be able to learn, and plan on leaving once they have developed a strong base knowledge of the business. With the trimming down of the company, there is likely little chance of promotion, especially with District Managers and positions above that are experiencing demotions down to lower levels.

Also bear in mind that typically across the board, there is a very aggressive requirement and expectation of sales, sales, sales. Employees are expected to sell loans aggressively and offer credit and non credit products along with the loans. You should not even think about having a problem with the company's philosophies (selling higher interest rates on loans, charging loan origination fees that are on the higher end (up to 5% on all loans, even $250,000 real estate loans), prepay penalties of 3%, along with "offering" (including) insurance onto loans, definitely not always with the full disclosure of the voluntary nature of any (included) insurance coverages on the loan.

Advice to Senior Management

I have no advice for upper management, maybe rather a reference to the golden rule. Honesty is always something that I would have liked to have experienced from my boss. I know that I can go to sleep tonight knowing that I have always been 100% honest with my employees about the future of their jobs.