TD Auto Finance CEO Marc Womack and DiversityInc CEO Carolynn Johnson sat down together recently in an interview over Zoom to discuss how Womack’s company (part of TD Bank, No. 18 on the DiversityInc Top 50 Companies for Diversity List in 2020) had been impacted over the last year by COVID-19, the efforts the company is taking to promote diversity and inclusion within its workforce and the importance of mentorships and talent readiness in building a company that’s primed for success.
This conversation that follows is a look back at their powerful and impactful talk, edited lightly for length and clarity.
Carolynn Johnson: Hello everyone. My name is Carolynn Johnson. I am the CEO of DiversityInc. And today I have the pleasure of interviewing Marc Womack, who is the CEO of TD Auto Finance. Marc, how are you doing today?
Marc Womack: I’m doing great. Pleased to be here today.
Johnson: Wonderful. To get started, for those who don’t know, can you walk us through how TD Auto Finance operates within the TD Bank organization as a whole?
Womack: Sure. TD Auto Finance operates predominantly in the indirect auto finance market, which is how most people engage in the auto finance process. The customer goes into a dealership, the dealer takes a credit application and then the dealer sends that application out to a number of banks. We’re one of those banks that the dealer sends those applications out to. That’s about nine-tenths of our business. For that remaining 10%, we also offer loans to dealers for commercial products and services, real estate loans, working capital loans and other products and services that support the dealers’ operations.
Johnson: Can you tell everyone where are you based?
Womack: We operate in all 50 States, which is a bit unique for TD Bank. Their retail footprint is predominantly up and down the East Coast from Maine to Florida, but we are the only business inside of TD Bank that actually is headquartered outside of the retail footprint. We’re headquartered in the suburban Detroit area.
Johnson: What are the unique challenges or struggles your branch experiences on a daily basis compared to other aspects of banking?
Womack: One of the big challenges in the auto finance space is that the banks don’t actually control the channel — the dealerships do, which is why we call it indirect lending. It’s really us going through the dealer to reach the end consumer. We rely on our partners to support those originations and application processes. And we try to both serve the dealership as a customer, as well as the end consumer as a customer. So that’s a bit more complicated than in the traditional direct-to-consumer type banking model.
Johnson: COVID-19 has obviously impacted all parts of our daily lives. We are doing this interview via Zoom, as opposed to how we would normally do it, which is sitting across from each other with high chairs chopping it up, right? What has been the impact of COVID on the auto market and auto loans in particular?
Womack: We could spend a long time on that topic. If I start at the most macro — if you think about the auto manufacturer and auto sales — back in the depths of the pandemic, auto manufacturers in the U.S. basically stopped producing cars for about two months. That obviously impacted dealerships in terms of a shortage of inventories that were available to sell. Plus, in many states, auto dealerships were considered non-essential businesses and weren’t allowed to operate. From a small business lens, that really impacted those dealerships and our business across the industry.
Manufacturing a car also isn’t like switching on a light switch. When you stop it, the lights go off. But when you turn it back on, it’s more like a hose than a light switch in the sense that, when you turn the water back on, it takes the water a little bit of time to get to the end of the hose. It typically takes about six to eight weeks from the start of manufacturing to a finished car railing off of the end of the assembly line.
If you combine those two things, dealers weren’t getting cars from manufacturers for the better part of four to five months. They were really forced to sell through the inventory that they had — and that was quite a challenge from an auto sales perspective at the most macro level.
The other piece that was interesting from a pandemic perspective is that a big component of auto sales is what we call “fleet sales” — sales to rental car companies like Hertz and Avis and Enterprise. And given that no one was traveling, those companies weren’t buying cars from the manufacturers either. Auto sales were therefore down pretty substantially over the course of the year, so our volumes from an auto financing perspective were impacted as well.
From a TD Auto Finance perspective, we also had to go very quickly from being a largely in-office-based operator to a virtual operator. And we were able to do that in just a little over a month — to go from 100% in the office to 100% out of the office. The impact was vast, broad and long-standing. I think we’ve started to see ourselves digging out of it at this point and I think things are getting back to some semblance of a new normal — but it’s definitely not the same as it was.
Johnson: On top of this, the auto market has also been greatly impacted by technology in the past few years. No one could have imagined it a decade ago, but people are buying cars online now, right? They’re picking up their cell phone and using an app. How has this new technology changed the way TD Auto Finance operates?
Womack: Twenty years ago, customers would go visit multiple dealerships and test drive multiple cars to really make that final purchase decision. Now people are going to 11 websites and doing their research online before they visit one dealership to buy their car. It’s truly changing all the dynamics of car buying in terms of price negotiation and dealer engagement and that whole purchasing process.
Now customers want to start that buying process before they get it to the dealership. Applying for credit is now happening much more online. Now there’s a tremendous push towards engaging customers digitally well before they get into the dealership. The “test drive” process is also becoming completely different. As you said, people are now buying cars sight unseen. Dealers are saying, “We’ll sell you the car and if you drive it for a week and you don’t like it, we’ll take it back.”
And all of these changes are happening in real-time. We’re all trying to figure out the implications of this new digital engagement model and the digitization of auto buying and auto financing, and where it’s going to take us.
Johnson: Definitely! When I bought my first car, I have to tell you, I think I was in the dealership for around five hours — no joke. This change is so monumental. Now you’re not just saving time, you’re gleaning more info about the process before you go in to make a purchase. There’s an increased fairness in pricing. It all puts the consumer back in control again and gives the consumer their power back, which I love.
Switching gears a bit, can you walk us through a typical workday? What kinds of challenges do you see on a daily basis and what kinds of successes are you able to achieve?
Womack: The thing that makes my job fun is that there isn’t a typical day. Every day is different. I might be looking at a forecast process or a strategy roadmap for the business or delivering a town hall over Zoom to 300 people. So, no two days are alike. We’re all so busy. Gravity tries to pull you in a million different directions at one time. But my brain doesn’t work that way. I have to keep things in twos and threes so my focus is always on one of those critical two or three things that I need to be focused on during a given day at a given time. And the majority of that time, when I’m doing my job right, I’m also engaging with people because that’s our strongest asset and our biggest enabler of success. Those are the days that I enjoy the most. So, there isn’t a typical day for me — but I kind of like it that way.
Johnson: I agree! I love the number of partners that we get to work with daily at DiversityInc, whether they are participants in our survey, as you all are, or nonprofit partners, or one of the boards that I sit on — INROADS or the Center for Women in Business at Rutgers. If I had to do the same thing day in, day out, I don’t know what I would do. [Laughs]
So now I want to pivot and talk about diversity and inclusion, equity and belonging. Are there any D&I programs being used under your leadership currently at TD?
Womack: Yes, definitely. And I appreciate the question. This is a labor of love for me. And I think that TD has always been about diversity and inclusion and bringing your whole self to work. I think it is a part of the secret “sauce” of our culture. You can see that no more clearly than through our recent commitment to deliver a billion dollars between now and 2030 on making the world a better and more inclusive place. It starts from the top of the house and specifically with me. Back in July , we began working to create an enterprise alignment; the bank decided to really focus on race, and we got all of the employee resource groups across the entire bank for all the different diverse categories, whether it be veterans, LGBTQ+, visible minorities, Blacks or women. We worked to centralize the focus within all these groups on our Black colleagues and what everyone was going through at the time.
I was also asked to co-chair the Black employee steering committee with my friend Scott Belton, who resides in Canada and leads our Metro Toronto consumer banking business. This helped to focus our strategies on both sides of the border. After all, TD is a Canadian bank, so we wanted to make sure that we had enterprise behind all of our efforts going on within both countries.
I was also asked to co-chair the U.S. Black Employee Network with my friend Senta Taylor, who runs credit card operations for our U.S. business. We started with a couple of very core commitments from a representation standpoint. The first was to double the amount of senior Black executive talent by the end of 2022. It’s a very aggressive goal that we’re looking to double the number of senior executives within the organization. And then on a longer-term basis, over the next five years, we’re also looking to increase visible minority executives by 50% with a focus on Black, Indigenous or Native colleagues.
From a colleague perspective, we really felt that those were very, very strong points that, at an enterprise level, we wanted to make from a public commitment perspective. Then as we dug into the work, we also wanted to come up with a strategy that we felt aligned with our overall corporate strategy, as well as our overall diversity and inclusion strategy, which is focused on three pillars: colleagues, customers and communities. We’ve mirrored our strategies around the Black employee network to focus on specific tactics and strategies that are aligning relative to those three pillars.
I continue to be incredibly excited about the progress that we’re making. We’ve got lots more to do, but we’re off to a pretty good start from my perspective.
Johnson: You spoke about doubling the number of senior African American executives by 2022. How are you making sure that you keep everyone in the know of your progress — if you’re on track to meet that commitment — and how are you making sure that it is not just an initiative that is important to you, a person who is Black, but that it is embraced by all leaders within the organization? Because that is the question that everybody has right now. How do we make sure that everyone is engaged in this particular initiative?
Womack: Absolutely. It’s got to be impactful when the rubber hits the road. You don’t want it just to be a marketing slogan. So, there are a few things that we’ve got going on from a centralized, structural perspective. We meet with our CEO, Bharat Masrani, on a quarterly basis. We’re updating him on progress relative to where we’re going from a strategy perspective — this is something that he’s asked for.
In the U.S. specifically, in addition to monthly updates with Stan Grayson, a member of our U.S. Board of Directors, we also meet with U.S. CEO Greg Braca on a monthly basis. And this is something that he is keenly aware of. He’s been focused on it and put resources and time and his personal imprint on the initiative as well.
We also have a team of executives within the U.S. that are kind of leading each of these initiatives. As we start talking about those three pillars, we have team leads focused on each of them. And we meet regularly to talk through exactly what we’re doing, exactly what folks need in terms of resources — both in terms of dollars and in terms of people — to make sure that we’re executing against our plans.
The Black employee steering committee also meets monthly on an enterprise basis to look across the enterprise. Because as I’ve mentioned, TD is a Canadian bank, and we’re making sure that we all are staying connected and we’re all moving initiatives forward, both from a planning and from an execution standpoint.
And personally, one of the biggest accomplishments that I think we’ve done — it may sound a bit limited, but it was just an incredible initiative — was finally coordinating our Black History Month celebration at an enterprise level. Historically, each business had done their own thing but this year, we did it on a virtual basis and we had well over 50 hours of content. We had hundreds of speakers, both internally and externally, and really focused the entire initiative around the pillars of Black thought, Black health, Black wealth and Black joy. And it was just an incredible achievement. We had great results and lots of engagement, and thousands of colleagues attended these numerous events, which was just an incredible achievement organizationally. And it’s also kicked off a new initiative that we’ve called Black 365. Because even when Black History Month ends, this isn’t the end — this is just the end of the beginning. We continue to have Black-focused content and engagement from all of our Black colleagues to the rest of the organization. Because Carolynn as you know, it’s not just about Black folks doing things. It’s about allies and other groups supporting what’s right across the enterprise. And we feel like we’re getting traction in a big way now.
Johnson: There’s been a lot of alarm over potential racism in the auto market as a whole with Black and Brown individuals, sometimes paying higher purchase prices, higher insurance rates and even higher loan rates based solely on the color of their skin or the zip code they live in. Various government administrations have put protections in place to try to fight the issue. But these requirements have also been eased in recent years. What’s your take on this subject as a whole?
Womack: We have zero tolerance for racism in any form in terms of practices and policies, and we’re taking one step further. It’s not just the policy on its face, but it’s the impact of the policy potentially negatively impacting any particular group. We do a very thorough review constantly of our processes to make sure that no group is negatively impacted by anything that we’re doing. I mentioned before that we operate largely in the indirect auto space so our dealer partners also play a role in this. And we engage with our partners on a very frequent basis whenever we see or hear about anything because the complaints come to us.
We’re also working very diligently with our partners on the dealer side to make sure that once we’re providing the decision back, the process all the way through that customer being boarded is fair, reasonable and equitable to all people.
On the more macro level, we already spoke a bit about the kinds of changes going on in auto buying and the financing process. And I think that the digitization of the process is creating greater transparency, which I think will positively affect this issue as well.
Johnson: That’s great. For other companies that aren’t working as hard to address the issue as TD is, what kind of reform would you like to see within the industry as a whole to fight these kinds of issues involving race and the auto market?
Womack: One of the things that we’re focused on at TD is financial education. I think that is a key indicator that shows that financial institutions really can do better. The more that we educate consumers on the cost of credit and the implications for credit and maintaining a strong credit rating and all of the things associated with those things, the more informed and empowered the consumer will be. And given the amount of information that exists out there, if you don’t understand how to use it all, then it’s just rubbish, right? It’s quantity, not quality. And I think the other bookend of that is around financial education and empowering customers not only to be aware of but to understand exactly what the terms and conditions of all of the things that they’re signing are and how that process ultimately results in their payment and their indebtedness. I think that’s an area that we can really lean into much more than we have.
Johnson: One more question on this topic: Delinquencies on auto loans are also a huge problem for Black and Brown individuals dating back even before we understood the global impact of COVID-19. Are there things being done in this area as well, to try and ensure everybody who wants and needs a car can get one — and is also able to pay for it?
Womack: I’ll say something here that to me is not particularly novel or interesting, but I think it’s something that needs to be said. The last thing that an auto lender or a bank of any kind wants to do is repossess a car. You want to make sure that the customer is not only able to afford that vehicle but as their time and circumstances change, continue to pay their bills. The last year taught us a lot about changing circumstances within the auto finance space and the auto loan category, developing tools that help that customer deal with those changing circumstances, whether that’s changing a due date or extending the duration of the loan, but there are a lot of tools that we are proactively offering out to customers when they get into trouble.
To address that, we have even changed the name of our organization that deals with customers that are delinquent from Collections to Customer Assistance — because that’s the focus that we want to put on what we’re doing. It’s not about going out and getting missing payments. It’s really saying, “Look, help me understand your circumstances so that I can give you the best tools and the best solution that I can give to keep you in this car so that you have mobility. You have the ability to potentially change your circumstances and move forward.” You don’t want to get somebody overextended in credit from the very beginning. Dealers try to have a variety of options for customers to be able to meet their needs, but also their wallets. And again, as I said before, if their circumstances change, we want to be able to help them. During the pandemic, we initiated a program called TD Cares, and we worked with a large number of our auto customers to be able to support their changing circumstances as a result of COVID-19. We were able to extend a great deal with those customers so they could stay in their loans — just the letters and calls of appreciation that we’ve gotten from customers saying, “You really helped me in my time of need,” makes us feel good as an organization because mobility is a key success factor for people.
If they can’t get to their jobs, they can’t earn money to be able to pay for any of their bills — not just their auto bills, but buying groceries or paying for their mortgage or what have you — so nobody wins. We understand that an auto loan is a key enabling tool for customers to be able to live their lives.
Johnson: Throughout your career, you’ve worked at GE Capital, HSBC, Capital One, Hyundai, and JPMorgan Chase. Now you’re home at TD Auto Finance. Over the course of your career, what are you most proud of achieving?
Womack: This may be unusual, but honestly, the thing that makes me feel the best about what I’ve done in my career is when people that I’ve worked with previously, call me back five, 10 years later and say, “That thing you told me back then, that I didn’t understand? Now I get it. And I’m thankful that you told me.” That’s the thing that motivates me, having people be able to do that. Yeah, I’m happy about the things that I can write on a piece of paper that I was able to accomplish, but the things that are the most important to me are those calls or those emails, or those letters that you get from people that say, “Hey, you don’t know, but that thing you told me helped me out later on.” That’s the thing I’m most proud of, for sure.
Johnson: It’s the impact that you can’t see, but you can feel? I like that.
Johnson: So, both good and bad, how has banking and auto finance changed over this particular period in your life? Going from GE Capital and HSPC, what has changed from the time that you started to where you are today?
Womack: I think the process has become a lot more efficient. I think that there’s still a lot more to do because as much as it’s changed there’s a lot of the underpinnings that have largely stayed the same. We’ve also spoken a little bit today about the focus on the customer and how customers engage the process now, and that’s been a definite change I’ve seen take effect. I think what’s happening is that all of the major participants in the marketplace are really beginning to understand that the consumer experience has to improve. All of those things are changing as a function of consumer demand and consumer desire to make that consumer process better. And that’s something we’re also still continuously working on.
Johnson: That’s great to hear! Last question — and I’m sad that this interview is almost over because I’m having a good time — what do you hope for the future? What changes would you most like to see coming down the pipeline? And what do you hope to achieve personally over the next few years as well?
Womack: I’ll start with the last one which is also the easiest one. I just want to see a continuation of what I’ve done before. We didn’t talk specifically about this, but mentors and sponsors have played a huge role in my career and in a lot of ways they were superchargers to my career. And I think a lot of it is sometimes being able to tell me what I wasn’t doing right as much as it was to say, “Hey, keep doing what you’re doing.” What I want to be able to do is leverage the platform that I have now — and as that platform expands — to be able to engage people in that way and have a greater impact on the development of the next Black executives, as well as the non-mixed non-Black executives.
Leaning in and focusing on the talent in our organization is really important to me, so that’s going to be a focus area for me going forward. The platform that I have as co-chair of the Black experience committee and here at TD as the CEO of auto finance gives me a great opportunity to fulfill a promise that I made to a lot of the mentors that came to me. The cost for me helping you is that you’ve then got to help somebody else. That’s an important responsibility that I happily take on.
In terms of change, I think one of the biggest things that I see is a gap in a lot of organizations that I’ve worked in. It’s not as intentional as I think a lot of folks would have you believe, but I think people have to be more aware of the talent that exists in the organization. I think one of the limitations of any talent process, and not just unique to TD, is the fact that I only know the people that I know. When I have a project that I need some assistance with, I always think of the same six people that I always go to. That’s why I think organizations have to be intentional about broadening their lens around talent and looking across the organization and saying, “Where are the talented individuals across the organization?” — even if they’re not subject matter experts in what I’m doing.
This is one of the things that I think is important in bringing in diverse talent, not just from an ethnicity standpoint, but diversity from a thought perspective as well. Maybe the best person to be that next person on the team is somebody who doesn’t know anything about what you’re doing but is really smart and very talented and can learn. I think that’s one of the things that I’m hopeful to see more of in the future.
From a customer community standpoint, I think there are some great opportunities for us to be more intentional about how we engage communities. TD is not the largest bank in the world, but I think we punch above our weight in a lot of areas. And I think that we have the opportunity to do that in this space as well.
Johnson: Marc, thank you so much for taking the time to speak with us. It’s been an incredible and very informative conversation. I appreciate your time today.
Womack: Thank you. I’ve enjoyed this as well, and I sincerely appreciate the work that you and the team at DiversityInc do. Thank you for the work that you and your team do in that space. I’ve really enjoyed chatting with you as well today. Bye.