Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 1563

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 9A
Chunk 1563
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 to the yield over the estimated
life of the Contract using the interest method. However, for receivables measured at fair value, we do not record acquisition fees as
an amortizing asset related to the receivables, nor do we capitalize costs of acquiring the receivables. Rather we recognize the costs
of acquisition as expenses in the period incurred.

Repossessed and Other Assets

If a Contract obligor fails
to make or keep promises for payments, or if the obligor is uncooperative or attempts to evade contact or hide the vehicle, a supervisor
will review the collection activity relating to the account to determine if repossession of the vehicle is warranted. Generally, such
a decision is made between the 60th and 90th day past the obligor’s payment due date, but could occur sooner or later, depending
on the specific circumstances. At the time the vehicle is repossessed we stop accruing interest on the Contract, and reclassify the remaining
Contract balance to the line item "Other Assets" on our Consolidated Balance Sheet at its estimated fair value less costs to
sell.

Treatment of Securitizations

Our term securitization structure has generally
been as follows:

We sell contracts we acquire
to a wholly-owned SPS, which has been established for the limited purpose of buying and reselling our contracts. The SPS then transfers
the same contracts to another entity, typically a statutory trust ("Trust").
The Trust issues interest-bearing asset-backed securities (“Notes”),
in a principal amount equal to or less than the aggregate principal balance of the contracts. We typically sell these contracts to the
Trust at face value and without recourse, except representations and warranties that we make to the Trust that are similar to those provided
to us by the Dealer. One or more investors (the “Noteholders”) purchase
the Notes issued by the Trust; the proceeds from the sale of the Notes are then used to purchase the contracts from us. We may retain
or sell subordinated Notes issued by the Trust. In addition, we have provided "Credit Enhancement" for the benefit of the Noteholders
in three forms: (1) an initial cash deposit to a bank account (a "Spread Account") held by the Trust, (2) overcollateralization
of the Notes, where the principal balance of the Notes issued is less than the principal balance of the contracts, and (3) in the form
of subordinated Notes. The agreements governing the secur