sop channel management dealer review - redacted 1.12.16 (2).pdf

8/16/2019 SOP Channel Management Dealer Review - Redacted 1.12.16 (2).pdf

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Subject:

Channel Management DealerReviews

Original Approval Date:06/16/2014

Current Effective Date:06/22/2015

Procedure No.200-14

Policy Owner: Senior Risk Executive Page 1 of 18Policy Contact: Operating Risk Leader

Channel Management Dealer Reviews SOP

Issued by:

Approval Date: 06/19/2015

Approved by: Senior Risk Executive (SRE)


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Subject:




Procedure No.200-14


TABLE OF CONTENTS

Page Number

1. Scope 3

1.1 Applicability 3

1.2 Effective Date 3

2. Overview and Purpose 3

3. Process Steps

3.1 Requirements 3-12

3.1.a New Dealers 3-9

3.1.b Process Steps for AML/Compliance Screening 9-10

3.1.c On-going Dealer 10-11

3.1.d Process Steps for New Payee Onboarding 11

3.2 OI Product Reviews 11-13

3.3 Banking Information Verification 13-14

3.4 System of Record 14

4. Roles and Responsibilities 14

5. Governance 14

5.1 Review, Renewal and Approval

5.2 Exceptions

6. Revision History 15

7. Appendices 15-18

Appendix 1 – Key Terms & Definitions 16

Appendix 2 – Bank Verification Options Grid 17

Appendix 3 – Bank Info Form Authorized Signer Requirements grid 18


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Procedure No.200-14


1. Scope

1.1 ApplicabilityThis Standard Operating Procedure applies to excluding Wholesale.

1.2 Effective Date

This Procedure shall be effective as of June 22, 2015.

2. Overview and Purpose

The purpose of this Procedure is to set forthguidelines for Channel Management (“CM”)’s processing requirements for Initial and On-going DealerReviews and Office Imaging (“OI”) Product Reviews.

3. Process Steps

3.1 Requirements

3.1.a New Dealers

All new Dealers applying to do business through an approved program must go through an initial reviewprocess conducted by the Channel Management team. This is referred to as a Dealer onboardscreening.

The following attributes are evaluated during the screening:

•

OR (obligor rating) Score – a methodology that accesses the probability of default of

someone seeking credit and assigns a representative number

• Corporate Standing – status of an organization with respect to being current on statutory dues

and the filing of required reports within a state

•

Address & Site Verification – validation of the dealers address to ensure it is an accuratereporting of the dealer’s location, and that the location is non-residential and appears equippedto conduct sales in their industry. Acceptable sources for Address Verification are Lexis Nexis,Google, or Google Maps search by address. Acceptable sources for Site Verification are GoogleMaps Aerial View, and Employee visit.

• Tenure – the length of time a dealer has been in business

• Standard industrial classification (SIC) Code – a numerical code that indicates an organizations

industry segment affiliation within the economy

• AML/Compliance Screening: a review using the Bridger Enterprise (Bridger) system to check for

Irregular Business Practice (IBP), Adverse Media, Office of Foreign Asset Control (OFAC) andWatchlist, where applicable. Please refer to: AML/KYC Policy for further guidance.


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Procedure No.200-14


• Original Equipment Manufacturer (OEM) Authorization – an agreement between a dealer and

an OEM to sell the OEM’s equipment

• Strategic Alliance Agreement (SAA) – a legal agreement between and the dealer that

contains, among other things, Terms & Conditions and Reps & Warranties

The below, Dealer Onboarding/Reactivation Criteria Matrix (Matrix A), provides guidance onscreening decisions for a variety of Dealer programs.

OI

Diversified

Programs

(F ormerl y CS) APPLE OTHER IT

DOOSAN/

BOBCAT NACCO

OR Score 16 13* 15 15

Per Wholesal e

Decis ion 16

TENURE 1 Yr 2/4 Yrs 3 Yrs 2 Yrs

Per Wholesal e

Decis ion 2 Yrs

OEM AUTHORIZATION Required Required Required N/A

Per Wholesal e

Decis ion Required

NEW VENDOR

AGREEMENT

DOCUMENTATION

1) Required for > $1MM

LVO

2) Required for any add'l

product approvals N/A N/A N/A Required Required

* OR14 & OR15 can be approved if beneficial owners are identified and are clear on Bridger and adverse media searches


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The Dealer Onboarding/Reactivation Exceptions Matrix (Matrix B) further outlines exceptioncriteria and approval authority levels:

Attributes Channel Management Analyst Channel Management Leader

OR Score 2 OR Score variance above requirement

stated on Matrix, maximum of OR16 based

on expert judgment.

3 OR Score variance above requirement

stated on Matrix, maximum of OR16 based

on expert judgment.

Corporate Standing Exception can be made i f dealer i s

registered in one s tate w/condition that

within 60 days they register in state they

are doing business .

May approve s uspende d or ina ctive any

formerly regis tered entity. Canno t

approve terminated or revoked.

Address Verification May approve bas ed on:

1) Utili ty bil l (other than phone)

2) Manta

3) Deale r website(if onl y for a new branch

of an otherwise previously established

dealer)

4) New facility lea se a greement

5) employee vis it

May approve ba sed on:

1) Utili ty bil l (other than phone)

2) Manta

3) Deale r website(if onl y for a new branch

of an otherwise previously established

dealer)

4) New facility lea se a greement

5) employee vis it

Si te Vis i t No authori ty to waive requirement Using d is cretion a nd e xpert judgment,

may wai ve s ite visi t requi rement (except

for Transportation Programs in which a site

visit is required on all)

Tenure No authori ty to waive requirement Using di scretion a nd expert judgement,

may waive tenure requirements or set

al ternative criteria

SIC Code (Strike Zone) Proper SIC code

for program

No authority to wai ve requirement May wai ve this requirement with revie w

of alternative evidencing

AML/Compliance Screening See Page 7

& 8 Process Steps for AML/Compliance

Screening

No authority to wai ve requirement FOR IBP's ONLY - May overturn a "true

hit"/"do not proceed" upon res earch and

discussions with compliance team. Will

provide documentation of joint decisi on

in the a ppropria te system.

OEM - Authori ze d by Ma nf. No a uthori ty to wa ive re qui re me nt No a uthori ty to wa ive re qui re me nt

New Vendor Agreement

Documentation

No auth ori ty to wa i ve req ui rement No auth ori ty to wa i ve requ i rement

Examples include:

Strategic Alliance Agreement (SAA),

Resellers Agreement, Dealer Reserve

agreement, etc…

Approval Authority Levels


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MATRIX C – SIC Code Strike Zone Guidance

Process Steps for new Dealer Onboarding (excluding TFS):

1. The sales team creates a Partner record in SalesForce and creates a Siebel Activity.

• Activity Type = CM-Dealer Review

• Activity Purpose = VR-New Vendor App or VR-New Vendor with Deal

• The activity resides in the CM queue (visible to and CM Analysts)

2. In addition to the items in #1 above, an auto-Submittal is sent to Siebel with “Dealer Review”Submittal Type and entered into the Siebel Touchless Flow process, where the Dealer is enteredas a customer. A Submittal number is generated with the results of the credit review whichincludes an OR rating, SIC code, Adverse Media and KYC/IBP screening results. verifieslegal name, corporate standing and tenure using the individual SOS (secretary of state) websites.Info from this verification is entered as a record in Siebel. Results of the Adverse Media check,along with Dealer owner name check in Bridger (if applicable), are entered in Siebel. A PaynetReport is also pulled.

3.

assigns the Activity to the CM Analyst queue. The CM Analyst performs additionalreview confirmations including Paynet Report, address, OEM and site visit verifications. The CMAnalyst will then decision the Dealer using the program guidelines. Siebel is updated to showthe decision and the Activity is assigned back to the CM Analyst queue.

SIC Code

CategoryDescription

OI

Diversified

Programs

(Formerly CS)

APPLE &

OTHER IT NACCO

2500 Furniture And Fixtures X

3500 Industrial And Commercial Machinery And Computer Equipment X X

3600 Electrical and Electronic Equipment Except Computers X X

3700 Transportation Equipment

3800 Instruments and Related Products X

3900 Miscellaneous Manufacturing Industries X X

5000 Wholesale Trade-durable Goods X X X

5100 Wholesale Trade-nondurable Goods X

5200 Building Materials, Hardware, Garden Supply, And Mobile Home Dealers X X

5300 General Merchandise Stores X X X

5500 Automotive Dealers And Gasoline Service Stations X

5700 Home Furniture, Furnishings, And Equipment Stores X

5900 Miscellaneous Retail X X X X

7300 Business Services X X X

7519 Truck Rental/Leasing, without Drivers X


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updates the Activity Comments with the decision, and proceeds with creating theVVLOC.

4. The VVLOC is created in Siebel and this information is fed to both Cheetah and SalesForce withthe below classifications.

• If declined, the activity is marked DONE and the Dealer is in REJ (rejected) status. Thesales team is notified that the Activity is done and the Dealer is unapproved. Theymay appeal the decision - See step 7 below. If not, this ends the Dealer onboardingprocess for rejected Dealer.

• If approved but program requires an SAA, the activity is marked DONE but the Dealeris in PND (pending) status. The sales team is notified and the Dealer is pending untilexecuted SAA is returned and approved.

• If approved but program does NOT require an SAA, the activity is marked DONE andthe VVLOC is placed in appropriate approval status. The sales team is notified that theactivity is done and the Dealer is approved to start submitting deals. This ends theDealer onboarding process for approved Dealer.

5. If the Dealer is in PND status:

a. The sales team will, at their discretion, create another Activity thru SalesForce toinitiate the SAA document creation.

• Activity Type = CM -Vendor Program Agreement

• Activity Purpose = VPA–Create SAA

• Approved templates for SAAs are stored in HotDocs

b.

The Activity is assigned by to the CM Analyst Queue. The CM Analystcustomizes the SAA for the specific Dealer ensuring the legal name is correctlystated, and other blanks are properly filled. The Activity is marked DONE and acopy of the Dealer specific SAA is stored in the Documents tab under the SiebelPartner. The sales team is notified that the SAA is ready to be presented to theDealer for signature.

c. Upon execution of the SAA by the dealer, the sales team will create anotherActivity for the executed SAA.

• Activity Type = CM-Vendor Program Agreement

• Activity Purpose = VPA–Execute SAA

d.

The Activity is assigned by to the CM Team. The Analyst will verify thatthe returned document matches the original (unaltered) and confirms thesignature is that of an authorized signer. Verification can be completed via LexisNexis query or review of a Certificate of Authority provided by the dealer.


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e.

The Analyst will assign the activity back to the CM Queue. will changethe VVLOC from PND (pending) to the appropriate approval status in Siebel. The

status is fed to both Cheetah and SalesForce and the Activity is marked DONE.The executed SAA is uploaded in P8. This ends the Dealer onboarding process forpending Dealer awaiting signed SAA.

6. If the Dealer is in REJ (reject) status:

a.

The sales team may request a decision appeal by creating a new activity.

o

Activity Type = CM-Vendor Review

o Activity Purpose = VR-Vendor Decision Appeal

b. Upon further research, based on additional information provided, the CM teammay or may not uphold the original decision. The final decision is noted in the

Siebel Activity Comments. Additionally, the team notes the decision inCheetah Comments.


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3.1.b Process Steps for AML/Compliance Screening:

1. The team will run the Bridger checks according to the AML/KYC Policyguidelines, via a Siebel Touchless Submittal.

a. If the Dealer is decisioned by the system as a Bridger “PASS”, this is documented in the Siebelrecord and the Dealer continues through the remainder of the onboarding approval process.

b. If the Dealer is decisioned by the system with a Bridger “FAIL” an auto-Activity is opened tothe AML COE.

•

If the AML COE team deems the hit to be a “FALSE POSITIVE”, the AML Activity &CM Submittal are noted and the AML Activity is closed. The Dealer then continues

through the remainder of the onboarding review process.•

If the AM COE team deems the hit to be a “TRUE HIT” or if they are not able tomake the decision for FALSE POSITIVE based on the info provided, the AML Activity isassigned to the AML Screening COE Flow team for further review.

2. The AML Screening COE-Flow team will do additional research.

a.

If the AML team deems the hit to be a “FALSE POSITIVE”, the AML Activity and CM Submittalare noted and the AML Activity is closed. The Dealer then continues through the remainderof the onboarding approval process.

b.

If the AML team deems the hit to be a “TRUE HIT”, or if they are not able to make the decisionfor FALSE POSITIVE based on the info provided, the AML Activity is assigned to the AML

Compliance team.3.

The AML Compliance team will do additional research and make a final decision on the statusof the Bridger hit.


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a.

IF the AML team deems the hit to be a “FALSE POSITIVE”, the AML Activity & CM Submittalare noted and the AML activity is closed. The Dealer then continues through the remainder

of the onboarding review process.

b.

If the AML team deems the hit to be a “TRUE HIT”, they may give further direction of “DoNot Proceed” based on the info provided, existing Compliance issues related to the hit, orfurther discussion with the Risk Leader for the related program. The AML Activity and CMSubmittal are noted with “TRUE HIT” and further direction of “Do Not Proceed”, then the AMLActivity is closed. The CM Analyst will reject the CM Activity and CM Submittal. This ends theonboarding process for rejected Dealer.

c. If the AML team deems the hit to be a “TRUE HIT” with further direction of “OK to Proceed”,the business is allowed to proceed at their discretion, however the CM Analyst will reject orapprove the CM Activity and CM Submittal based on discussion with the CM Leader.

•

If rejected, this will end the Dealer onboarding process.• If approved, the Dealer then continues through the remainder of the onboarding

review process.

4. IBP Exception: Direction from the AML team of “TRUE HIT - Do Not Proceed” on a potential IBPcan be appealed for further review. The CM manager and the Platform AML manager will jointlydecision whether to proceed with onboarding, or not, based upon the facts of the case.Documented evidence of the joint decision will be recapped in an email between the CMManager and the Platform AML Manager. This email will be attached in the Documents tabunder the Siebel Partner. The Siebel Touchless status will remain “TRUE HIT – Do Not Proceed”regardless of the decision to proceed with onboarding or not.

There are times when moving forward with onboarding is acceptable for a system “TRUE HIT”. Forexample, a Dealer review that detects a required IRS 8300 form (Report of Cash Payments over$10,000 Received in a Trade or Business) has not been completed would be raised as a potential IBP.However, this IRS reporting issue would not necessarily prohibit transacting business with that Dealer in

3.1.c On-going Dealer

On-going Dealer reviews are conducted based on the following requested situations:

• Dealer Reactivation: A previously active Dealer has been inactivated and is requesting

reactivation. A full review will be conducted by the CM team. See 3.1 (above) for new Dealerscreening guidance.

• Additional VVLOC for new Dealer Location: An active Dealer desires a new VVLOC to be

established for a new location. An address verification of the new location will need to beperformed by the CM team.


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• Additional VVLOC for new/different program: An active Dealer is seeking approval to

participate in an additional/new program.

o If the Dealer has been active and not subject to a full review for more than 24months, the CM team will conduct a full review. See 3.1 (above) for new Dealerscreening guidance.

o If the Dealer has been active and reviewed within the last 24 months, the CMteam will conduct an OEM authorization check of the new program only.

3.1.d Process Steps for new Payee Onboarding

The process steps for onboarding a new Payee replicate the steps for onboarding a new Dealer with theexception of the site visit, OR Score & SIC Code consideration, and tenure, which are not required.

3.2 OI Product Reviews

OI Product reviews –An OI Dealer may request to participate in various product offerings. Upon request,in addition to the onboarding criteria listed above, the Dealer may be evaluated based on the followingcriteria for participation in the product program:

• Sales volume – dollar amount of annual sales revenue generated by the Dealer

• Financial Statements – income and balance sheet statements provided by the Dealer

• History/Portfolio Performance – a review of prior business with and the related

portfolio performance


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The below, OI Product Review Criteria Matrix (Matrix D), provides guidance on screening decisionsfor a variety of OI Products.

Criteria FOF

Points in Rate

(6-10)** CPC

Private Label w/

Immediate

Notification

Standard Private

Label

Waive Phone

Audit (WPA)*

Dealer Return of

Equipment

(ROE)*

Tenure in Business 1 year 2 years 2 years 2 years 5 years 2 years 2 years

Tenure with GE 1 year 1 year

Sales Volume $1MM $5MM

OR Score 16 16 16 13 13

2 Years Fiscal Year End Financials (and interim) No Yes

No Material Derogs Yes Yes Yes Yes Yes Yes YesNo Prior History of Problems w/ GE Yes Yes Yes Yes Yes Yes Yes

SAA Required Yes Yes Yes Yes Yes

Individual Deal Size


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The OI Product Review Exceptions Matrix (Matrix E) further outlines acceptance criteria andapproval authority levels for dealer product approvals:

Approval Authority Levels

Attributes Channel Management Analyst Channel Management Leader

Sales Volume for Private Label No authority to waive requirement May waive sales volume or set alternative

criteria (i.e. approval subject to 6 month

review, etc…).

Financial Statements for Standard

Private Label

May waive with OR13 or better with 10 years

tenure

May waive with OR14 based on Expert

Judgment

Financial Statements for Private Label

with Immediate Assignment

No authority to waive requirement when

guidelines not met

May waive with OR14 based on Expert

Judgment

History/Portfolio Performance May disregard portfolio performance more

than 5 years old in their analysis

May approve up to LTD Loss/OEC of 5.0%

Transactional request not included in

executed SAA

CPC & FOF transaction can be approved.

No authorization to approve Private Label

transaction.

CPC & FOF transaction can be approved.

No authorization to approve Private Label

transaction.

Tenure - CPC and Points in Rate (6-10) May reduce to 1 year based on Expert

Judgment

May reduce to 1 year based on Expert

Judgment

Waive Bank Verification May waive verbal verification or copy of a

canceled check for non-financial institutions

or non-publicly traded companies with bank

letterhead listing names on the account and

account number.

May waive verbal verification or copy of a

canceled check for non-financial institutions

or publicly traded companies with bank

letterhead listing names on the account and

account number.

Dealer Status - FOF May approve for Fund of Fax WITH return of

originals for APUW status

May approve for Fund of Fax WITH return o

originals for APUW status

3.3 Banking Information Verification

• CM receives a request to update bank information, and is provided a completed and signed

Recurring ACH-Wire Bank Info Form or other acceptable documentation (see Appendix 2).

• CM confirms completeness of form and authorization of signer on Bank Info form (see Appendix 3)

• CM contacts the bank to confirm the Dealer is owner of account provided, the account # is correct

and ABA Routing # provided is correct for payment method requested (ACH or Wire). If a copy of avoided check was provided, it can be used for account name & account # verification, but theRouting # must still be verified.

o

If the bank requires authorization from customer to confirm bank info, CM will fax oremail the Recurring ACH-Wire Bank Info Form to bank. A follow-up call will be made tomake confirmation or arrangements made for return fax or email.


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o

If the bank cannot make confirmation with 3rd party under any of the circumstancesdescribed above, CM will advise Sales. Sales will contact the Dealer to request them to

contact their bank for an exception.

•

CM inputs the verified bank info in Siebel, which will feed to Cheetah.

• CM notifies the Treasury Operations team of the bank info update, when Wire information has

been added to the system, providing the required screen shot for their record.

3.4 System of Record

The CM team uses a variety of programs while conducting the reviews described above, includingSiebel, Lexis Nexis, Secretary of State (SOS) websites, etc. However, the system of record for verifiedDealer data is Cheetah.

4. Roles and Responsibilities

• Senior Risk Executive (SRE) is (“Owner”) and is responsible for ensuring that Risk

Classifications are being assigned according to requirements.

•

Operating Risk Leader maintains this SOP and ensures the current version is properlydocumented and retained. The Operating Risk Leader also interprets and communicatesupdates to the appropriate Risk personnel.

•

Credit Executives and Portfolio Management Executive provide oversight ofthe Portfolio and Credit teams and serves as a point of escalation to ensure processescomply with the SOP as outlined above.

5. Policy Governance

5.1 Review, Renewal and Approval

The Operating Risk Leader shall review this SOP at least annually and it must be updated the earlierof when changes in processes occur or three years from the last approval date. The

SRE is responsible for renewing the SOP and approving all material changes to thisProcedure, and its appendices, at least every 36 months.

5.2 Exceptions

Exceptions to the requirements contained herein should be approved in writing by the SRE

and retained with the relevant system of record which corresponds to the request.


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6. Revision History

7. Appendices

Version Approval Date1.0 06/16/2014 Original2.0 06/22/2015 Refreshed to new Procedure format. Added sections 3.1.a. & 3.3


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Appendix 1

Key Terms & Definitions

Cost Per Copy (CPC) – OI product that allows for bundling of service & equipment payment, andmay include charges for per copy usage. This is also referred to as Usage Based Billing (UBB).

Dealer – Company that sells retail equipment to to lease or loan to end users. In regard to thisSOP, the terms /Dealer/partner/resellers are used interchangeably.

Fund Off Fax (FOF) – OI product whereby remits funds to a Dealer with electronic copies of thelease contract being deemed acceptable documentation.

Payee – any person or entity receiving proceeds from the Portfolio Management System (PMS)

receivable module.

Points in Rate – OI product that allows Dealers to add additional points to the standard rate card rate,when calculating the rate charged to the customer.

Standard Private Label – OI product where the Dealer is Lessor on the lease and billing andcollection is in the name of the Dealer (without reference to

Private Label with Immediate Notification – an OI product where the Dealer is Lessor on thelease, but notifies the customer immediately of assignment, with billing and collection in GE’sname.

Strike Zone – A targeted group of SIC codes in which a program are expected to operate. Anapproved Dealer should be affiliated with a SIC code that falls within the Strike Zone of theirprogram. See Matrix C for Strike Zones by program.

VVLOC (Dealer/Dealer LOCation) – a two part code representing the Dealer Record. A dealer canhave multiple Dealer LOCations under one Dealer as each is a separate location (address). The firstpart of the code – Dealer Code - (up to 6 characters) represents the Dealer Program within theCheetah/PMS hierarchy. The second part of the code – Dealer LOCation – (up to 6 characters)represents the dealer branch locations. For example, the vvloc for Joe’s Equipment Inc in Wichita,KS is 123456.123456 signifies the branch location for the dealer.


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Appendix 2

Bank Verification Options Grid

Financial Institutions/

Publicly Traded CompanyCompleted Bank Info Form signed by Authorized

Signer (see bank info form)*

Completed Bank Info Form signed by Authorized

Signer (see bank info form)*

Payment Instructions on LetterheadCopy of Voided Check / Pre-printed Deposit Slip

with completed Bank Info Form

Payment Instructions on Buyout Letter/Invoice Bank Info Loaded on Existing Payee Code

Payment Instructions on Website Confirmed Match for Wholesale Setup

Bank Info Verification Options

Dealers/Payees

* Verbal or written confirmation will be made with the bank

Verification of Routing # will be needed for all options requiring a Bank Info Form


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Appendix 3

Bank Info Form Authorized Signer Requirements Grid