The bank auto financing business

Prevention of operational risk and legal risk

(Chen Jian: copyright)

In recent years, with the rapid increase of China's national income level and living standards of the people, buy a house to buy a car has become the biggest bright spot Chinese emerging middle class and affluent consumer spending, with the speeding up of urban and rural areas and city road of our country urbanization traffic further perfect the construction of our country, enterprise and household car popularity rate year by year improve the entry of foreign capital, the automobile financial company, the automobile financial service has become a hot topic in China's commercial banking business competition.

Throughout China's commercial banks to launch all kinds of auto finance business, in addition to the traditional personal automobile consumption loans, corporate commercial mortgage loans, most varieties of business is all kinds of bank for automobile dealers launched the car license pledge financing business, including liquidity loans, bank acceptance and various forms of silver and three party vendors trade financing business.

The operation pattern and the present situation of China's commercial banks, a car license pledge financing business:

Analysis of automobile of our country commercial bank certificate financing mode of operation, can be summed up the design of automobile banks certificate financing reckon without one's host only so:

Because the car certificate is one of the most important legal documents car license, but is a vehicle permit, no it will not handle motor vehicle license, pledged to obtain bank credit, automobile dealers must first repayment to redeem the pledge to the bank car qualified certificate in sales of motor vehicles, handed over to purchase a car makers handle the licensing procedures therefore, the Auto Certificate by the bank control can supervise the sales of cars, car dealers are generally not the transfer of vehicle license; if the car dealer repayment is not due, as the bank control automobile certificate will be through the manufacturers buy back a car, balance refund and other so-called "manufacturers of Silver" mode to recover loans, risk control.

The Auto Certificate pawns financing into the car sales industry "unspoken rule" already in our country, the majority of dealers are taking the Auto Certificate pawns the loan as invigorated funds chain "chips", as the pledge to the bank loans, car sales out after repayment redemption certificate, and then delivered to the owner. So business launch, has been widely popular market, not only solve the car dealer's cash flow difficulties, create more sales and profits, but also bring interest income large deposit settlement, substantial and comprehensive income for the bank, for the parties seems very low risk, high return, so gain ten thousand percent a good business!

But the key issue is: the car certificate is legitimate car vouchers? The Auto Certificate pawns really in accordance with the law to protect banks pledge priority and credit funds safety?

The true meaning and its standard format two, automobile certificate:

To answer these two questions, we first have a look to management departments of the state on the car certificate of

The definition of:

The car certificate, namely "motor vehicle factory certification" (hereinafter referred to as "the car certificate"), Department of motor vehicle production enterprises and vehicle allotment of printed indicate the company name, corporate logo and anti-counterfeiting information documents.

Definition: the car that certificate is proof of vehicle equipment technical parameters, vehicle factory quality qualified, approved by the state licensed manufacturers, and can be used for vehicle security only documents.

The national automobile certificate of standard and sample are as follows:

Three, the relevant state provisions for the management of car qualified file:

At present about the effective government document auto certificate management is mainly: the joint national development and Reform Commission and the Ministry of Public Security (hair change industry Document No. [2004]2881) "the national development and Reform Commission, the Ministry of public security on regulating the motor vehicle factory certification management notice", expressly notify: "motor vehicle factory certification (hereinafter referred to as qualified C) is for the domestic motor vehicle registration must be one of the legal evidence submitted, and motor vehicle production enterprise product consistency management assessment of the important content."

"The supervision and management of the national development and Reform Commission is responsible for the production, vehicle production enterprises certificate and the use of information transmission. Not transfer certificate of motor vehicle production enterprises according to the requirements of the allotment certificate, certificate and "bulletin" published product inconsistent, not according to the prescribed transfer certificate information or send a false certificate information, reselling or, the national development and Reform Commission will be in accordance with the relevant provisions of the motor vehicle production enterprises and products access management to revoke the relevant products, stop product declaration until revoked vehicle products production license. "

"The traffic control department of the public security organ in motor vehicle registration, certification and verification with the car dispensed, information about reading and writing certificate. Not on the provisions issued certificate, certificate does not comply with the prescribed style, the contents of certificates (including "technical parameter table") and "announcement" motor vehicle products released products inconsistent, not register. "

Another important files and: "the national development and Reform Commission on motor vehicle factory notice certificate and upload information management".

The notification requirement: "vehicle production enterprise shall provide certificate data center software system or interface upload in accordance with the provisions of the certificate information. All not in accordance with the provisions of the allotment certificate, "vehicle production enterprise and product announcement" inner product certificate and "bulletin" published product inconsistent, not according to the prescribed transfer certificate information or send a false certificate information, sell or transfer the certificate of motor vehicle production enterprises, the national development and Reform Commission will be in accordance with the relevant provisions of the motor vehicle production enterprises and access management of revocation of its related products, production enterprises production license shall be ordered to stop illegal product recall, product returns until revoked vehicle products."

There are four car license, bank financing legal risk and operational vulnerabilities:

From the above provisions defined standards and documents, "motor vehicle factory certification" (referred to as "the car certificate"), motor vehicle factory is a legal certificate of qualified, it is the vehicle to the local Che Kwun departments registration must submit the proof of one of the legal. That is to say, like other certificate of product or commodity inspection certificate, whether from its definition, or from its record of the content, vehicle certificate is only a motor vehicle certificate, which can be registered, That's it. There was no any motor vehicle certificate of property title description, identification and approval of the content, thus proving:Vehicle certificate is only a motor vehicle factory certification, not motor vehicle certificates of property rights.

Then from the civil law perspective, no matter how "guarantee law", or the "property law", the car certificate does not belong to a kind of property right, also is not a property right certificate, possession of automobile certificate does not belong to the guarantee law of the property or property rights of mortgage, pledge or lien. Therefore, any form of secured car certificate does not belong to the guarantee law sense of property rights or. The following case is an example of:

"The court held that, although the banks and car sales company signed a pledge contract, but the car sales company did not transfer the vehicle property to the bank, the bank's share of the car certificate but said the vehicle quality a format that is not a vehicle, the vehicle or ownership certificate, certificate is not a car property, more non property rights, there is no market value of exchange, transfer of vehicle ownership is not to transfer certificate as a condition, therefore, the auto certificate can not become the right of pledge of the subject matter, the bank can not be disposed of on the car certificate corresponding to the car. Accordingly, the court judgement, confirm the car sales company claims, but the pledge is not established, the bank does not have the priority right to be repaid. "

Since it is not the car property documents, then the bank pledge to control vehicle certificate to still have what meaning? From the actual effect, the bank Shouzhi Auto Certificate, can prevent the car to the registration, no permit can not be on the card, but that didn't stop the record car sales, has not set the legal transfer restriction in auto sales, more loopholes in the law is more than serious: court decision has already proved that the Auto Certificate pawns is invalid, the law did not pledge priority, is not against the third person, once the dealers debt dispute, all kinds of cases and even bankruptcy, third court ready for motor vehicles seized, disposal and auction permits, sale price to dispose of distribution, creditor banks not only to hand over the car certificate, must undertake no ordinary creditor's rights pledge guarantee loss!

On the Auto Certificate pawns financing, also easily lead to car dealer, purchase a car consumers and charge card bank three of the contract dispute. The certificate is the commodity Zhunshengzheng, no certification of goods can not enter the sales link, after delivery in the consumer car case, the certificate must be delivered to the consumer goods. In this sense, the Auto Certificate pawns the loan is the lack of legal basis. Step back and say, consumers pay, leave the car dealers, both sides has actually been formed in a contract for the sale, if the dealer not to the bank repayment for card because of the difficulties in the capital turnover, delivery vehicles not only delivery vehicle certificate, causes the consumer to the vehicles can not be on the card, is a not fully perform the contract responsibility, serious violations of consumer behaviour, violation of the "contract law" the relevant provisions of, can easily lead to long-term cannot get on the purchase a car consumers sued the car dealers and charge card bank to compensate for the losses, ruling bank returned the car certificate, bank loss caused actual control of automobile certificate, face great credit risk.

Since it is not a document of title, the auto certificate is of little value, the bank will not according to the motor vehicle prices or sales price approved Auto Certificate value, a no show, property value extremely rights can not limit the property transfer document, how can be used as collateral for credit and payment in accordance with the law of priority?

Do not apply for vehicle delivery of movables pledge procedures or chattel mortgage registration, only receives the car certificate, is completely have the order reversed the risky behaviors, we cannot control the car certificate issuing loans to auto dealers not many outstanding problems and bad loans, can easily relax the management and control of the vehicle pledge, not under the guise of the Auto Certificate pawns the guarantee, and firms repurchase balance repayment terms as the guarantee of bank credit security the final straw, guard against the risk of hope lies in a free license and car manufacturers to repurchase the refund guarantee; loan recovery, can only prove that you choose the dealers have the strength, credit, but does not prove that your operation is legitimate and effective, no risk, no control car, just a piece of paper, if no car is a waste, is hard to prevent the legal risk and operational risk.

No matter from the substantive content, or from the perspective of legal provisions, the Auto Certificate pawns is a pseudo proposition and invalid pledge, no wind control security and legal protection! The design of the car license pledge financing business, the beginning of natural legal loopholes and operational risk, once the car dealer business risk, security and benefit will seriously jeopardize the bank credit funds. In recent years, the media to expose the Auto Certificate pawns the invalid, car card is not fake, purchase a car theft, or not timely issuing registration caused by triangular disputes, many cases caused by a large bank of overdue loans is evidenced by the!

Five, effective prevention of auto financing business legal risk and operational risk:

With the rapid development of our national economy, people's living standards gradually improved and further perfect the construction of urban road traffic, China's automobile industry and car market a good momentum of development, opened the broad market space and market opportunity for commercial banks to engage in auto financing business, auto finance in China have a brilliant future, but to do auto financing business of commercial bank, still need long-term and unremitting adhere to the following principles of risk control:

(a) preferred the approved domestic and international famous brands of automobile products and certification dealership:

Since China adopted the "vehicle production enterprise and product announcement", the national development and Reform Commission "vehicle production enterprises and product announcement" enterprise to produce the announcement approval of automotive products, therefore, chattel mortgage, mortgage banks can receive motor vehicle, should be limited to the notice China approved vehicle production enterprises of vehicle products, as well as the motor vehicle imports Chinese customs lawful goods import certificate, import customs inspection procedures and have to pay customs duties.

The auto dealers or agents of customers, it is best to choose those at the local car market has strength, good credit, excellent service at home and abroad well-known Dachang automobile brand 4S shops, distributors or agents. For those not in the "national vehicle production enterprises and product announcement" list of small nameless factory, vehicle safety quality does not have the national certification and security of unlicensed small factory, assembly, or suspected of smuggling, selling motor vehicles unscrupulous vendors, strict credit access system, prevent bad manufacturers in the Auto Certificate pawns financing way malicious fraud, obtain bank credit funds.

(two) strict compliance operation, ensure that the automobile product pledge foot, lawful, effective value;

The bank receives the Auto Certificate pawns the auto dealers issued credit, the purpose is to through Shouzhi car certificate to control corresponding motor vehicle property value to guarantee credit funds security; and machinery and transportation tools such as collateral, which in fact is a kind of auto chattel mortgage business.

The valid conditions for producing a pledge, pledge of movables is property rights according to law shall be delivered and the bank has, since it is so, banks must for auto financing, according to the law should require the auto dealers will be used for motor vehicles in the garage or warehouse pledge, pledge contract delivery bank chartered by the bank custody, possession and appoint third party logistics supervision company in the market supervision, in accordance with the law to ensure that the bank can pledge the vehicle priority right of pledge.

Of course, if the transfer cost is too high, can not afford the car dealers, banks can also adopted the on-site supervision according to law and to the Administration for Industry and commerce to handle the registration procedures to ensure their legal mortgage rights in accordance with the law, and according to the "property law" the relevant judicial interpretation, prior to the mortgage right, for the chattel mortgage registration than mere chattel pledge more priority of compensation according to law.

Therefore, the key vehicle risk control secured financing business, banks should handle car pledge procedures in accordance with the law, in addition to the collection of car license, but also to ensure delivery of the pledged or pledge automobile shall handle the registration.

(three) to strengthen the collateral value of monitoring and market analysis of automobile, automobile dealers and grasp the dynamic risk management, timely adjustment and optimization of automobile financing portfolio and customer structure, strengthen post loan management and security supervision, and effectively prevent the auto market risk and credit risk;

The car is expensive high-grade consumer durable goods, it is difficult to maintain a large amount of consumption goods, a higher value, widely used in automobile, demand for larger, easier to sell, but on the other hand, due to the accelerated reduction, upgrading, technological progress fast, very fast car pledge depreciation, loss is large, it is difficult to maintain, not suitable for long-term mortgage bank credit, therefore, should strictly control the auto financing pledge rate, adhere to the "Duanpingkuai" auto finance business principles, to speed up the new for old, equivalent replacement, remain flexible mortgage vehicle market, at the same time to strengthen the daily management after loan, follow the local car market situation, timely grasp of the car price information, manufacturers and dealers operating conditions, strengthen supervision and check sales outstanding account, establishing a rapid, rapid response, timely response to reflect the collateral sale mechanism of automotive products, effective control and prevention of collateral automobile product disposal and market risks.

(revised October 20, 2010, October 25th)