UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

WASHINGTON, D.C. 20549

________________

FORM 10-K/A Amendment No. 1



☒ ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December
31, 2019



Commission file number: 001-14116



CONSUMER PORTFOLIO SERVICES, INC.

(Exact name of registrant as specified
in its charter)



|California                                                     | 33-0459135                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)
|                                                               |                                     
|3800 Howard Hughes Pkwy, Las Vegas, NV                         | 89169                               
|(Address of principal executive offices)                       | (Zip Code)                          



Registrant’s telephone number,
including area code: (949) 753-6800

Securities registered pursuant to
Section 12(b) of the Act:

|Title of each class        | Trading Symbol(s) | Name of each exchange on which registered  
|-------------------------- | ----------------- | -------------------------------------------
|Common Stock, no par value | CPSS              | The Nasdaq Stock Market LLC (Global Market)



Securities registered pursuant to Section
12(g) of the Act: None



Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.  Yes ☐    No ☒



Indicate by check mark if the registrant is not required to
file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.  Yes ☐    No ☒



Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒    No ☐



Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files). Yes ☒    No ☐



Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”,
and “emerging growth company” in Rule 12b-2 of the Exchange Act.



|Large accelerated filer ☐ |                             | Accelerated filer ☒
|------------------------- | --------------------------- | -------------------
|Non-accelerated filer ☐   | Smaller reporting company ☒
|                          | Emerging Growth Company ☐  



If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐





Indicate by check mark whether the registrant is
a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☒





As of the close of business on April 27, 2020, there were
22,728,109 common shares of the registrant outstanding. The aggregate market value of the 17,931,572 shares of the registrant’s
common stock held by non-affiliates as of the date of filing of this report, based upon the closing price of the registrant’s
common stock of $3.80 per share reported by Nasdaq as of June 28, 2019, was approximately $68,139,974. For purposes of this computation,
a registrant sponsored pension plan and all directors are deemed to be affiliates. Such determination is not an admission that
such plan and directors are in fact affiliates of the registrant.

















EXPLANATORY
NOTE



On March 16, 2020, Consumer
Portfolio Services, Inc. (the “Company” or “CPS”) filed its Annual Report on Form 10-K for
the fiscal year ended December 31, 2019 (the “2019 Form 10-K”). This Amendment No. 1 (the
“Amendment”) amends Part III, Items 10 through 14, of the 2019 Form 10-K to include information
previously omitted from the 2019 Form 10-K in reliance on General Instruction G(3) to Form 10-K. That
instruction provides that registrants may incorporate by reference certain information from a definitive proxy statement, or,
if such statement is not filed by 120 days after the end of the fiscal year, then by amendment of the annual report.
Accordingly, Part III of the 2019 Form 10-K is hereby amended to add the information set forth below.





In addition, as required by Rule 12b-15 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), certifications by the Company’s principal
executive officer and principal financial officer are filed as exhibits to this Amendment under Item 15 of Part IV. The certifications
are filed with this Amendment as Exhibits 31.1 and 31.2.  Because no financial statements are included in this Amendment and
this Amendment does not contain or amend any disclosures with respect to Items 307 or 308 of Regulation S-K, paragraphs
3, 4 and 5 of the certifications have been omitted. This Amendment does not include the certifications under Section 906
of the Sarbanes-Oxley Act of 2002 because no financial statements are included in this Amendment.



Except as stated herein, this Amendment
does not reflect events occurring after the filing of the 2019 Form 10-K with the SEC on March 16, 2020 and no attempt
has been made in this Amendment to modify or update other disclosures contained in the 2019 Form 10-K.









1







PART III



Item 10. Directors, Executive Officers
and Corporate Governance.



Directors



The names of the Company’s directors,
their principal occupations, and certain other information regarding them are set forth below. None of the Company’s directors
currently serves on the board of directors of any other publicly-traded companies.



Charles E. Bradley, Jr., 60, has
been the President and a director of the Company since its formation in March 1991, and was elected Chairman of the Board of
Directors in July 2001. Mr. Bradley has been the Company's Chief Executive Officer since January
1992. From April 1989 to November 1990, he served as Chief Operating Officer of Barnard and Company, a private
investment firm. From September 1987 to March 1989, Mr. Bradley, Jr. was an associate of The Harding Group, a
private investment banking firm. Having been with the Company since its inception, Mr. Bradley brings
comprehensive knowledge of the Company’s business, structure, history and culture to the Board and the Chairman
position.



Chris A. Adams, 71, has been a director
of the Company since August 2007. Since 1982 he has been the owner and chief executive of Latrobe Pattern Company and K Castings
Inc., which are firms engaged in the business of fabricating metal parts. With his experience as chief executive of manufacturing
companies, Mr. Adams contributes to the Company’s Board significant organizational and operational management skills.



Brian J. Rayhill, 57, has been a director
of the Company since August 2006. Mr. Rayhill has been a practicing attorney in New York State since 1988. As an experienced
advocate, counselor and litigator, Mr. Rayhill brings legal knowledge and perspective to the Company’s Board.



William B. Roberts, 82, has been a
director of the Company since its formation in March 1991.  Since 1981, he has been the President of Monmouth Capital
Corp., an investment firm that specializes in management buyouts. Having spent decades in the business of finance, Mr. Roberts
brings to the Company’s Board his perspective and judgment regarding means of financing its business.



Gregory S. Washer, 58, has been a director of the Company
since June 2007. He was the president and owner of Clean Fun Promotional Marketing, a promotional marketing company, from its
founding in 1986 through its sale in September 2014. He continued to act as president of Clean Fun through August 2017, and is
now retired. With his experience in promotions and marketing, Mr. Washer contributes to the Board significant organizational and
operational management skills, combined with a wealth of experience in promotion and marketing of services.



Daniel S. Wood, 61, has been a director
of the Company since July 2001. Mr. Wood was president of Carclo Technical Plastics, a manufacturer of custom injection
moldings, from September 2000 until his retirement in April 2007. Previously, from 1988 to September 2000, he was the
chief operating officer and co-owner of Carrera Corporation, the predecessor to the business of Carclo Technical Plastics. As president
of Carclo, Mr. Wood was responsible for the overall operation of that company and for the quality and integrity of its financial
statements. He brings to the Board the knowledge and perspective useful in evaluating the Company’s financial statements,
and broad organizational and management skills.



Executive Officers



The information regarding the Company’s executive officers
set forth in Part I of this report under the caption “Executive Officers of the Registrant” is incorporated herein
by reference.



Section
16(a) Beneficial Ownership Reporting Compliance



Directors, executive officers and holders of in excess of
10% of the Company's common stock are required to file reports concerning their transactions in and holdings of equity
securities of the Company. Based on a review of reports filed by each such person, and inquiry of each regarding holdings and
transactions, the Company believes that all reports required with respect to the year 2019 were timely filed, except that the
initial report of our newly-elected director, Mr. Grasso, which reported holdings of zero, was filed late.









2







Code of Ethics



The Company has adopted a Code of Ethics for Senior Financial
Officers, which applies to the Company's chief executive officer, chief financial officer, controller and others. A
copy of the Code of Ethics may be obtained at no charge by written request to the Corporate Secretary at the Company's principal
executive offices.



Audit and Other Committees



The Board of Directors has established an
Audit Committee, a Compensation Committee, and a Nominating Committee. Each of these three committees operates under
a written charter, adopted by the Board of Directors. The charters are available on the Company’s website, www.consumerportfolio.com/charters.html.
The Board of Directors has concluded that each member of these three committees (every director other than Mr. Bradley, the Company's
chief executive officer), is independent in accordance with the director independence standards prescribed by Nasdaq, and has determined
that none of them have a material relationship with the Company that would impair their independence from management or otherwise
compromise the ability to act as an independent director.



The members of the Audit Committee are Mr.
Wood (chairman), Mr. Rayhill and Mr. Washer.



The Audit Committee is empowered by the Board
of Directors to review the financial books and records of the Company in consultation with the Company's accounting and auditing
staff and its independent auditors and to review with the accounting staff and independent auditors any questions that may arise
with respect to accounting and auditing policy and procedure.



The Board of Directors has further
determined that Mr. Wood has the qualifications and experience necessary to serve as an "audit committee financial
expert" as such term is defined in Item 407 of Regulation S-K promulgated by the SEC. Mr. Wood, as
president of Carclo Technical Plastics, was responsible for the preparation and evaluation of the audited financial
statements of that company.



Item 11. Executive Compensation.



Compensation Committee Interlocks
and Insider Participation



The Compensation
Committee comprises non-employee directors Chris Adams (chairman), William Roberts and Daniel Wood. From December 2007 through
January 2019, Mr. Roberts held $4,000,000 of subordinated notes issued by the Company. The board of directors considered whether
such holdings would reasonably be expected to impair Mr. Roberts’ exercise of independent judgment, and concluded that his
independence was not impaired. In coming to that conclusion, the board noted that the Company’s repayment obligation was
subordinated to all other debt of the Company, creating a near-alignment of interest with the holders of common stock, and also
noted Mr. Roberts’ substantial beneficial ownership of Company common stock.



Compensation Committee Report



The Compensation Committee has reviewed and discussed with management
the Compensation Discussion and Analysis contained in this report. Based on such review and discussions and relying
thereon, we have recommended to the Company's Board of Directors that the Compensation Discussion and Analysis set forth below
be included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.



THE COMPENSATION COMMITTEE



Chris
A. Adams (chairman)           William B. Roberts          Daniel S. Wood



Compensation Discussion and Analysis



2019 Say-on-Pay Advisory Vote
Outcome



The Compensation
Committee annually considers the results of the most recent advisory vote by shareholders to approve executive officer compensation.
In the 2019 advisory vote, a majority of the voted shares (56%) approved the compensation of our named executive officers. The
Compensation Committee has noted the substantial negative vote, but has determined to retain the existing design, purposes and
structure of our executive compensation programs. The Compensation Committee will continue to consider the results from future
shareholder advisory votes regarding executive officer compensation in its future administration of executive compensation.









3







Compensation Objectives



The Company's
objectives with respect to compensation are several. The significant objectives are to cause compensation (i) to be
sufficient in total amount to provide reasonable assurance of retaining key executives, (ii) to include a significant contingent
component, so as to provide strong incentives to meet designated Company objectives, and (iii) to include a significant component
tied to the price of the Common Stock, so as to align management's incentives with shareholder interests. The compensation
committee ("Committee") of the Company's Board of Directors is charged with administering the Company’s compensation
plans to meet those objectives. To the extent that elements of compensation would not advance such objectives, or would
do so less effectively than would other elements, the Committee seeks to avoid paying compensation in those forms.



Role of the Compensation Committee
and the chief executive officer



Our Board of Directors
has authorized the Compensation Committee, which is composed solely of independent directors, to make all decisions regarding executive
compensation, including administration of our compensation plans. In that regard, the Compensation Committee:



| | · | Reviews and discusses with management the factors underlying our compensation policies and decisions, including overall compensation
objectives;                                                                               
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | Reviews and approves all company goals and objectives (both financial and non-financial) relevant to the compensation of the
chief executive officer;                                                                          
| | · | Evaluates, together with the other independent directors, the performance of the chief executive officer in light of these
goals and objectives and that individual’s overall effectiveness;                                   
| | · | Fixes and approves directors each element of the compensation of the chief executive officer;                                                                                                                                  
| | · | Reviews the performance evaluations of all other members of executive management (the chief executive officer prepares and
presents to the Compensation Committee the performance evaluations of the other executive officers);
| | · | Reviews and approves each element of compensation, as well as the terms and conditions of employment, of those other executive
officers;                                                                                       
| | · | Grants awards under our equity compensation plans and oversees the administration of those plans; and                                                                                                                          
| | · | Reviews the costs and structure of our key employee benefit and fringe-benefit plans and programs.                                                                                                                             



The Compensation Committee is authorized to form subcommittee(s) and to retain experts and consultants to assist in the discharge
of its responsibilities. To date it has not done so.



The chief executive
officer, who attends meetings of the Compensation Committee by invitation of the Committee’s chairman, assists the Committee
in determining the compensation of our other executive officers by, among other things:



| | · | Proposing annual merit increases to the base salaries of the other executive officers;                                                                                                                    
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | Establishing annual individual performance objectives for the other executive officers and evaluating their performance against
such objectives (the Committee reviews these performance evaluations); and
| | · | Making recommendations, from time to time, for special stock option and restricted stock grants (e.g., for motivational
or retention purposes) to other executive officers.                               



The other executive
officers do not have a role in determining their own compensation, other than to discuss their annual individual performance objectives
and results achieved with the chief executive officer.



Our Overall Approach



The Committee
has put into place a compensation system consisting of three key components: base salary, an annual cash bonus pursuant to an incentive
plan, and long-term equity incentives in the form of stock options.









4







The table below
provides comparative information regarding the components of our year 2019 executive compensation program. We are applying the
same elements in our executive compensation program for the year 2020.



|Element                | Form    |   | Objectives and Basis                                                                                                                                                              
|---------------------- | ------- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Base Salary            | Cash    | · | Attract
and retain high quality personnel                                                                                                                                         
|                       |         | · | Targeted to be superior to compensation offered by our competitors                                                                                                                
|Annual Incentive Bonus | Cash    | · | Achieve
objectives set annually                                                                                                                                                   
|                       |         | · | Annual
bonus amount is set and computed as a percentage of base salary                                                                                                            
|                       |         | · | Actual
payout determined by Company and individual performance                                                                                                                    
|                       |         | · | Target total cash (base salary + target bonus) designed to be superior to compensation offered by our competitors                                                                 
|Long-Term Incentive    | Stock   | · | Align
interests of executives with those of shareholders;                                                                                                                         
|Compensation           | options | · | Target long-term incentive award size designed to retain executives through long-term vesting and the potential for wealth
accumulation, contingent on benefit to the shareholders



The Committee
has from time to time considered providing additional elements of executive compensation.  It has considered elements
such as restricted stock awards, restricted stock units, compensation contingent on a change in control, defined benefit pension
plans, deferred cash compensation, and supplemental retirement plans (supplemental in the sense that they exceed the limits for
tax advantaged treatment).  To date, the Committee has elected not to pay compensation in such forms, having determined
that the Company's objectives are better met by one or more of the elements of compensation that it does pay.



Regarding restricted
stock and restricted stock units, the Committee has noted that any form of equity equivalent to or closely tied to common stock
does serve to meet the objective of aligning officers' personal interest with that of the shareholders generally. The
Committee believes, however, that the objective is better met by grants of stock options than by grants of share equivalents, because
recipients of the grants will face the same degree of variance in results at a lesser cost to the Company, when option grants are
compared to grants of restricted stock units. Further, unlike restricted stock, option grants will not provide a reward to
the holder absent an improvement over time in the Company’s stock price.  The committee has elected not to provide material
perquisites as compensation, having determined that cash is a better medium of exchange.



Regarding compensation
that would be payable contingent on a change in control of the Company, the Committee believes that there are certain legitimate
objectives to be met by such contingent compensation. As of the date of this proxy statement, however, no such contingent
compensation plans are in place. Regarding defined benefit pension plans, deferred cash compensation and supplemental
retirement plans, the Committee believes that the Company's retention objective is better met by straight cash payments, whether
in the form of base salary or in the form of bonus compensation. In particular with respect to plans for deferred compensation,
the Committee believes those make sense for the Company and for the recipient only on the basis of assumptions regarding future
tax rates payable by each. Having no assurance that such assumptions would be correct, the Committee has chosen not to put into
place any special deferred compensation programs for the company’s executive officers. Those officers do participate in a
company-sponsored tax-deferred savings plan, commonly known as a 401(k) plan, on the same terms available to company employees
generally.



The Committee
may in the future revisit its conclusions as to any of the components discussed above, or may consider other forms of compensation.



The Base Salary
Element



With respect
to the retention objective, the Committee considers an executive's base salary to be the most critical component.  Acting
primarily on the basis of recommendations of the chief executive officer, the Committee determines whether to adjust other officers'
base salaries annually, with typical adjustments ranging from zero (applicable to most of the Company’s executive officers
from 2017 to the present) to as much as a 10% increase from the prior year's rate.  Where exceptional circumstances
apply, such as recruitment of a new executive officer, a promotion to executive officer status or a special need to retain an
individual officer, the chief executive officer may recommend, and the Committee may approve, a larger increase.









5









The Company's
general approach in setting the annual compensation of its named executive officers is to set those officers’ base compensation
by reference to their base rates for the preceding year. During the year ended December 2019, the Company's chief executive officer,
Charles E. Bradley, Jr., received $995,000 in base salary. In setting that rate in the first quarter of 2019, the Committee considered
the base salary rate that the Company had paid in the prior year ($995,000), the desirability of ensuring retention of the services
of the Company's incumbent chief executive officer, the Company’s financial performance, and the levels of chief executive
officer compensation prevailing among other financial services companies. The Committee considered whether to adjust officers’
base compensation for 2019, and determined not to increase the base rate for the chief executive officer or the other named executive
officers.



The Annual
Incentive Bonus (EMB) element



To encourage executive
officers and key management personnel to exercise their best efforts and management skills toward causing the Company to meet its
overall objective, and toward achieving designated specific individual objectives, the Company has implemented an Executive Management
Bonus Plan, with annual payouts. Under the Company's bonus plan as applied to the year ended December 2019, the Company’s
two executive vice presidents (each of whom is among the named executive officers) were eligible to receive a cash bonus of up
to 160% of their base salaries, and the Company’s senior vice presidents (two of whom is among the named executive officers)
were eligible to receive a cash bonus of up to 120% of their base salaries. The chief executive officer was eligible
to receive a cash bonus of up to 600% of his base salary. The implementation of this element for the year 2019 is discussed below.





The Long-Term
Incentive Compensation Element



The
Committee also awards incentive and non-qualified stock options under the Company's stock option plans. Such awards are
designed to assist in the retention of key executives and management personnel and to create an incentive to create
shareholder value over a sustained period of time. The Company believes that stock options are a valuable tool in
compensating and retaining employees. During the year ended December 31, 2019, the Committee granted stock options
to the Company's executive officers. All such grants were awarded in August 2019, and all carry exercise prices equal to the
market price for the Company's common stock at the date of grant. The terms of such options are described below,
under the caption "Grants of Plan-Based Awards in Last Fiscal Year." The numbers of shares made subject to each of
the option grants were based on various factors relating to the responsibilities of the individual officers and to the extent
of previous grants to such individuals.



Because the
exercise price of all options granted is equal to or above the fair market value of the Company's common stock on the date of
grant, the option holders may realize value only if the stock price appreciates from the price on the date the options were
granted. This design is intended to focus executives on the enhancement of shareholder value over the long term.



Other Elements



The Company also
maintains certain broad-based employee benefit plans, such as medical and dental insurance, and a qualified defined contribution
retirement savings plan (401(k) plan), in which executive officers are permitted to participate. Such officers participate
on the same terms as non-executive personnel who meet applicable eligibility criteria, and are subject to any legal limitations
on the amounts that may be contributed or the benefits that may be payable under the plans. The Company does not maintain
any form of defined benefit pension or retirement plan in which executive officers may participate, nor does it maintain any form
of supplemental retirement savings or supplemental deferred compensation plan.



Exercise of
Discretion



In
exercising its discretion as to the level of executive compensation and its components, the Committee considers a number of
factors. Members of the Committee conduct informal surveys of compensation paid to comparable executives within and without
the consumer finance industry. The Committee finds these data useful primarily in evaluating the overall level of
compensation paid or to be paid to the Company's executive officers. The Committee noted that the Company met and
exceeded its budget objectives for the year. Operational factors considered included individual and group management goals;
indicators of the performance and credit quality of the Company's servicing portfolio, including levels of delinquencies and
charge-offs; and indicators of successful management of personnel, including employee stability. All of such factors are
assessed with reference to the judgment of the Committee as to the degree of difficulty of achieving desired
outcomes. With respect to payment of annual bonuses and grants of stock options, the Committee also takes note of
factors relating to the degree of the Company's success over the most recent year.









6







Specific
Objectives and Evaluation



In the first quarter
of 2019 the compensation committee designated specific objectives with respect to the chief executive officer to be accomplished
within the year 2019, and fixed weights to be associated with each such objective. The chief executive officer proposed to the
committee specific annual objectives with respect to each other executive officer of the company, which the committee, after making
certain modifications, approved. These objectives and the Committee’s administration of the annual incentive bonus
element of compensation are discussed in detail below, under the heading “ - Grants of Plan-Based Awards in Last Fiscal Year
- Executive Management Bonus Plan.”



Grants of Options



The Committee's
award of stock options to the Company's officers in August 2019 included option grants to the chief executive officer and the other
named executive officers. In determining the appropriate level of such grant, the Committee considered the long-term
performance of the chief executive officer and the desirability of providing significant incentive for future performance, as well
as the desirability of ensuring that officer's continued retention by the Company, and the various factors noted above with respect
to option grants generally. These grants and the Committee’s administration of the long-term incentive element of compensation
are discussed in detail below, under the heading “-Grants of Plan-Based Awards in Last Fiscal Year – Equity Incentives.”



Stock Ownership,
Hedging and Pledging. Our board of directors and compensation committee have considered whether to establish a minimum
stock ownership goal for members of our senior management. We have elected not to do so, considering that such a policy would either
be strict and mandatory, in which case it would undermine the compensatory objectives of our equity compensation plans, or would
be merely hortatory, in which case it could be expected to have little effect. We’ve also noted that the multiyear vesting
terms of the equity incentives granted under our plans have the effect of aligning our executives’ individual personal financial
incentives with the future price performance of the Company’s stock.



As part of our
comprehensive compliance policy, we remind all company executive officers of the mandatory legal prohibition on selling short company
shares. We also prohibit company executive officers from entering into transactions that would have the effect of causing those
individuals to benefit from a decline in the price of the company stock, such as the purchase of “put” options. We
prohibit such “hedging” transactions but we do not find it appropriate to prohibit our executive officers from pledging
their shares of company stock as security for a loan. We believe that the beneficial incentives of owning company stock remain
substantially the same with or without such a pledge.



Summary of Compensation



The following table summarizes all compensation earned during
the three fiscal years ended December 31, 2019 by the Company's chief executive officer, its chief financial officer, and the other
three most highly compensated individuals (such five individuals, the "named executive officers") who were serving in
such position or as executive officers at any time in 2019. It lists their names, the principal positions in which they served
in those years, and each component of compensation paid with respect to those years.









7







Summary Compensation
Table



|Name and Principal Position |  | Year |  |  | Salary |         |  | Non-Equity Incentive Plan Compensation |   | Option Awards (1 |  |  | All Other Compensation (2) |         |  | Total |  
|--------------------------- |  | ---- |  |  | ------ | ------- |  | -------------------------------------- | - | ---------------- |  |  | -------------------------- | ------- |  | ----- | -
|Charles E. Bradley, Jr.     |  | 2019 |  |  | $      | 995,000 |  |                                        | $ | 2,600,000        |  |  | $                          | 334,290 |  |       | $
|President & Chief           |  | 2018 |  |  |        | 995,000 |  |                                        |   | 2,700,000        |  |  |                            | 327,000 |  |       |  
|Executive Officer           |  | 2017 |  |  |        | 995,000 |  |                                        |   | 2,850,000        |  |  |                            | 402,000 |  |       |  
|Jeffrey P Fritz             |  | 2019 |  |  |        | 411,000 |  |                                        |   | 233,000          |  |  |                            | 100,287 |  |       |  
|Executive Vice President    |  | 2018 |  |  |        | 411,000 |  |                                        |   | 452,000          |  |  |                            | 98,100  |  |       |  
|& Chief Financial Officer   |  | 2017 |  |  |        | 411,000 |  |                                        |   | 417,000          |  |  |                            | 120,600 |  |       |  
|Michael T. Lavin            |  | 2019 |  |  |        | 411,000 |  |                                        |   | 461,000          |  |  |                            | 100,287 |  |       |  
|Executive Vice President    |  | 2018 |  |  |        | 411,000 |  |                                        |   | 506,000          |  |  |                            | 98,100  |  |       |  
|& Chief Operating Officer   |  | 2017 |  |  |        | 411,000 |  |                                        |   | 496,000          |  |  |                            | 120,600 |  |       |  
|Teri L. Robinson            |  | 2019 |  |  |        | 368,000 |  |                                        |   | 328,000          |  |  |                            | 66,858  |  |       |  
|Senior Vice President       |  | 2018 |  |  |        | 368,000 |  |                                        |   | 354,000          |  |  |                            | 65,400  |  |       |  
|- Originations              |  | 2017 |  |  |        | 368,000 |  |                                        |   | 341,000          |  |  |                            | 80,400  |  |       |  
|Laurie A. Straten           |  | 2019 |  |  |        | 362,000 |  |                                        |   | 328,000          |  |  |                            | 66,858  |  |       |  
|Senior Vice President       |  | 2018 |  |  |        | 362,000 |  |                                        |   | 340,000          |  |  |                            | 65,400  |  |       |  
|- Servicing                 |  | 2017 |  |  |        | 362,000 |  |                                        |   | 339,375          |  |  |                            | 80,400  |  |       |  



| | (1) | Represents the dollar value of accrued for financial accounting purposes in connection with the grant of such options,
                                                               computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 and SFAS 123R.
                                                               Value was estimated using a Black-Scholes model for the year 2019, and using a binomial option pricing model for 2018 and
                                                               2017. For the year 2019 the weighted average fair value per option was $1.11, based on assumptions of 4.11 years expected
                                                               life, expected volatility of 37.13%, and a risk-free rate of 1.53%. For the year 2018 the weighted average fair
                                                               value per option was $1.09, based on assumptions of 4.11 years expected life, expected volatility of 33.93%, and a risk-free
                                                               rate of 2.75%. For the year 2017 the weighted average fair value per option was $1.40, based on assumptions of 4.11
                                                               years expected life, expected volatility of 51.23%, and a risk-free rate of 1.10%. In all cases, we assumed a dividend yield
                                                               of 0.0%.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Amounts in this column represent premiums paid by the Company for group life insurance.
| | --- | ---------------------------------------------------------------------------------------



Grants of Plan-Based Awards in Last Fiscal Year



Equity Incentives



In the year ended December 31, 2019, we did not grant any stock
awards or stock appreciation rights to any of our named executive officers. We granted options to substantially all
of our management level employees on August 8, 2019. The option grants noted in the tables above and below were awarded to the
named executive officers as part of those grants. We also granted awards under our Executive Management Bonus Plan, which were
evaluated after the end of the year. The amounts paid are shown in the table above (Summary Compensation Table) as “Non-Equity
Incentive Plan Compensation.”



In the August 2019 grant, the chief executive officer received
an option to purchase 300,000 shares of the Company's common stock at the market closing price ($3.53 per share) on the date of
grant, with such right to purchase to become exercisable in increments of 25% on each of the first through fourth anniversaries
of the grant date, and to expire on the seventh anniversary. Each of the other executive officers of the Company received a grant
at that time on the same terms. Mr. Fritz and Mr. Lavin received such a grant with respect to 90,000 shares, and the other executive
officers of the Company each received such a grant with respect to 60,000 shares.









8







The table below provides information regarding the awards granted
to the named executive officers in 2019.



Grants
of Plan-Based Awards



|Name         |  | Estimated future payouts under non-equity incentive plan awards Threshold Target Maximum |   |  | Grant Date |   |           | Number of
 Shares
 Underlying
 Options |  |   | Exercise
 Price |  |  | Grant Date
 Fair Value |          
|------------ |  | ---------------------------------------------------------------------------------------- | - |  | ---------- | - | --------- | -------------------------------------- |  | - | --------------- |  |  | ---------------------- | ---------
|             |  |                                                                                          |   |  |            |   |           |                                        |  |   |                 |  |  |                        |          
|Mr. Bradley  |  |                                                                                          | – |  |            |   | –         |                                        |  |   | –               |  |  |                        | 8/08/2019
|             |  | $                                                                                        | – |  |            | $ | 5,970,000 |                                        |  | $ | 5,970,000       |  |  |                        | –        
|Mr. Fritz    |  |                                                                                          | – |  |            |   | –         |                                        |  |   | –               |  |  |                        | 8/08/2019
|             |  | $                                                                                        | – |  |            |   | 657,600   |                                        |  |   | 657,600         |  |  |                        | –        
|Mr. Lavin    |  |                                                                                          | – |  |            |   | –         |                                        |  |   | –               |  |  |                        | 8/08/2019
|             |  | $                                                                                        | – |  |            |   | 657,600   |                                        |  |   | 657,600         |  |  |                        | –        
|Ms. Robinson |  |                                                                                          | – |  |            |   | –         |                                        |  |   | –               |  |  |                        | 8/08/2019
|             |  | $                                                                                        | – |  |            |   | 441,600   |                                        |  |   | 441,600         |  |  |                        | –        
|Ms. Straten  |  |                                                                                          | – |  |            |   | –         |                                        |  |   | –               |  |  |                        | 8/08/2019
|             |  | $                                                                                        | – |  |            |   | 434,400   |                                        |  |   | 434,400         |  |  |                        | –        



The “target” and “maximum” figures appearing
in the table above represent the maximum cash payout under the individual executives’ Executive Management Bonus Plan
awards as of the date the incentive was fixed. The actual payout to each individual named in the table above has been determined
and paid prior to the date of this proxy statement. That amount was in each case materially less than the maximum (approximately
44% of the maximum, in the case of the chief executive). The respective actual payments are described below, and appear above in
the Summary Compensation Table under the heading “Non-Equity Plan Compensation.” Because each non-equity incentive
plan award has been settled and paid, the future payout under such awards as of the date of this report is in each case zero. The
“grant date fair value” figures appearing in the table above, which are the computed fair values of stock option awards,
are computed as described in note 1 to the Summary Compensation Table.



Executive Management Bonus Plan





The Executive Management Bonus Plan award granted to the chief
executive officer, Mr. Bradley, called for him to meet as many as possible of seven separate operational and financial objectives
within the year 2019. The Compensation Committee assigned to each of those objectives a value as a percentage of base salary. The
objectives and their weightings were as follows: to meet the Company’s quarterly budgeted earnings (25% each quarter, total
of 100%), to raise $70 million or more of new capital (50%), to renew or replace each of two designated existing warehouse credit
facilities on terms equal to or better than those pre-renewal (50%), to acquire a material new servicing portfolio (100%), to execute
three rated securitization transactions after the first quarter of 2019 (40% each, 120% total), to achieve annual originations
of receivables exceeding each of five targets (100% in the aggregate, creditable in increments of 20% for reaching aggregate amounts
of $800 million, $850 million, $900 million, $950 million, and $1.0 billion), and to cause the Company’s common stock to
trade in excess of each of four targets (80% in the aggregate, creditable in increments of 20% for reaching prices of $5.00, $5.50,
$6.00 and $6.50 per share).



The total of the seven weightings is 600%; accordingly, the
target and maximum possible value to that officer of the award was 600% of his base salary for 2019.



In a series of meetings, the committee evaluated the chief executive’s
performance in comparison to the goals. The Compensation Committee determined that the budget objective was met in one of the four
quarters of 2019, and credited the chief executive with one increment, or 25%. The Company was not successful in raising new capital
during the year, and no credit was given.



The Committee noted the successful renewal of both of the two
designated warehouse lines, in February and December, and determined that each renewal was on terms that met the stated objective.
The Committee therefore credited the chief executive with the full 50% possible. No new portfolio was acquired in 2019, and the
Committee found no credit was earned in that respect.



The Committee noted that the Company had executed four rated
securitizations during the year, three of them after the objective was set, representing creditable performance of 120%. It determined
that our originations volume exceeded $1.0 billion for the year while maintaining credit quality, representing creditable performance
in the amount of 100%. None of the stock price objectives were fulfilled.



The aggregate valuation of all creditable performance for the
chief executive officer was thus 295%, which would imply a bonus payment under our Executive Management Bonus Plan of $2,935,000.
The committee elected to pay a bonus of somewhat less than the maximum creditable percentage, in the amount of $2,600,000, representing
261% of our chief executive’s base salary.









9







The Executive Management Bonus Plan awards granted to the named
executive officers other than the chief executive officer are evaluated on a more subjective basis, and were set by the Compensation
Committee in consultation with and on the recommendation of the chief executive officer. Factors used in determining the amount
of bonus for the two named executive officers who are executive vice presidents of the Company are these: (I) an evaluation of
the executive’s skills and performance, 26.7%, (II) whether the executive has met three individual objectives approved by
the compensation committee, 32% in aggregate, (III) whether the Company as a whole has met or exceeded budget targets, 13.3%,
(IV) a subjective evaluation of the officer's performance, 53.3%, and (V) a discretionary allocation recommended by the chief
executive officer and approved by the compensation committee, 34.7%.



Numerical scores are assigned to each of these factors, up to
the maximum percentages stated above, and can result in a maximum bonus of 160% of base compensation.



Similar factors are applied in determining the amount of annual
bonus for executive officers who are senior vice presidents of the Company: (I) skills and performance, 20%, (II) three individual
objectives, 24%, (III) Company budget, 10%, (IV) subjective evaluation of that executive’s department, 40%, and (V) discretionary
allocation, 26%, resulting in a maximum bonus of 120% of base compensation.



Following the end of the year 2019, our compensation committee
evaluated each named executive officer’s performance in relation to these standards and goals. In two quarters out of four,
the Company met its overall budget target, and each officer accordingly received 50% credit with respect to that target.



With respect to the individual factors, the compensation committee,
acting in part on the advice of our chief executive officer, determined that creditable performance for 2019 for each named executive
officer other than the chief executive officer was as set forth below:



|             |  | Maximum percentage |     | Creditable percentage |  | Base Salary |       |   | Result (rounded to nearest $1000) |  
|------------ |  | ------------------ | --- | --------------------- |  | ----------- | ----- | - | --------------------------------- | -
|Mr. Fritz    |  |                    | 160 | %                     |  |             | 56.6  | % |                                   | $
|Mr. Lavin    |  |                    | 160 |                       |  |             | 112.1 |   |                                   |  
|Ms. Robinson |  |                    | 120 |                       |  |             | 86.1  |   |                                   |  
|Ms. Straten  |  |                    | 120 |                       |  |             | 90.8  |   |                                   |  



On that basis, the Compensation Committee approved payments
to these named executive officers in the amounts shown in the rightmost column.



Outstanding Equity Awards at Fiscal Year-end



The following table sets forth as of December 31, 2019 the number
of unexercised options held by each of the named executive officers, the number of shares subject to then exercisable and unexercisable
options held by such persons and the exercise price and expiration date of each such option. Each option referred to
in the table was granted at an option price per share no less than the fair market value per share on the date of grant. None of
such individuals holds a stock award; accordingly, only information concerning option awards is presented.









10







|Name                    |  | Number of 
securities underlying
 unexercised options
 (exercisable) |         |  | Number of 
securities underlying
 unexercised options
 (unexercisable) |  |         | Option 
exercise price |  |   | Option 
expiration date
|----------------------- |  | -------------------------------------------------------------------- | ------- |  | ---------------------------------------------------------------------- |  | ------- | ---------------------- |  | - | -----------------------
|Charles E. Bradley, Jr. |  |                                                                      | 50,000  |  |                                                                        |  | –       |                        |  | $ | 1.81                   
|                        |  |                                                                      | 200,000 |  |                                                                        |  | –       |                        |  | $ | 1.19                   
|                        |  |                                                                      | 100,000 |  |                                                                        |  | –       |                        |  | $ | 1.03                   
|                        |  |                                                                      | 250,000 |  |                                                                        |  | –       |                        |  | $ | 1.75                   
|                        |  |                                                                      | 83,333  |  |                                                                        |  | –       |                        |  | $ | 1.75                   
|                        |  |                                                                      | 166,666 |  |                                                                        |  | –       |                        |  | $ | 1.50                   
|                        |  |                                                                      | 100,000 |  |                                                                        |  | –       |                        |  | $ | 0.95                   
|                        |  |                                                                      | 140,000 |  |                                                                        |  | –       |                        |  | $ | 1.20                   
|                        |  |                                                                      | 60,000  |  |                                                                        |  | –       |                        |  | $ | 1.94                   
|                        |  |                                                                      | 100,000 |  |                                                                        |  | –       |                        |  | $ | 3.72                   
|                        |  |                                                                      | 250,000 |  |                                                                        |  | –       |                        |  | $ | 6.86                   
|                        |  |                                                                      | 250,000 |  |                                                                        |  | –       |                        |  | $ | 7.97                   
|                        |  |                                                                      | 300,000 |  |                                                                        |  | –       |                        |  | $ | 6.59                   
|                        |  |                                                                      | 300,000 |  |                                                                        |  | –       |                        |  | $ | 6.11                   
|                        |  |                                                                      | 225,000 |  |                                                                        |  | 75,000  | (1)                    |  | $ | 3.48                   
|                        |  |                                                                      | 150,000 |  |                                                                        |  | 150,000 | (2)                    |  | $ | 4.35                   
|                        |  |                                                                      | 75,000  |  |                                                                        |  | 225,000 | (3)                    |  | $ | 3.48                   
|                        |  |                                                                      | –       |  |                                                                        |  | 300,000 | (4)                    |  | $ | 3.53                   
|                        |  |                                                                      |         |  |                                                                        |  |         |                        |  |   |                        
|                        |  |                                                                      |         |  |                                                                        |  |         |                        |  |   |                        
|                        |  |                                                                      |         |  |                                                                        |  |         |                        |  |   |                        
|Jeffrey P. Fritz        |  |                                                                      | 25,000  |  |                                                                        |  | –       |                        |  | $ | 1.81                   
|                        |  |                                                                      | 50,000  |  |                                                                        |  | –       |                        |  | $ | 1.03                   
|                        |  |                                                                      | 36,000  |  |                                                                        |  | –       |                        |  | $ | 1.20                   
|                        |  |                                                                      | 14,000  |  |                                                                        |  | –       |                        |  | $ | 1.94                   
|                        |  |                                                                      | 60,000  |  |                                                                        |  | –       |                        |  | $ | 6.86                   
|                        |  |                                                                      | 60,000  |  |                                                                        |  | –       |                        |  | $ | 7.97                   
|                        |  |                                                                      | 180,000 |  |                                                                        |  | –       |                        |  | $ | 6.59                   
|                        |  |                                                                      | 90,000  |  |                                                                        |  | –       |                        |  | $ | 6.11                   
|                        |  |                                                                      | 67,500  |  |                                                                        |  | 22,500  | (1)                    |  | $ | 3.48                   
|                        |  |                                                                      | 45,000  |  |                                                                        |  | 45,000  | (2)                    |  | $ | 4.35                   
|                        |  |                                                                      | 22,500  |  |                                                                        |  | 67,500  | (3)                    |  | $ | 3.48                   
|                        |  |                                                                      | –       |  |                                                                        |  | 90,000  | (4)                    |  | $ | 3.53                   
|                        |  |                                                                      |         |  |                                                                        |  |         |                        |  |   |                        
|                        |  |                                                                      |         |  |                                                                        |  |         |                        |  |   |                        
|                        |  |                                                                      |         |  |                                                                        |  |         |                        |  |   |                        
|Michael T. Lavin        |  |                                                                      | 5,000   |  |                                                                        |  | –       |                        |  | $ | 1.81                   
|                        |  |                                                                      | 20,000  |  |                                                                        |  | –       |                        |  | $ | 1.03                   
|                        |  |                                                                      | 30,000  |  |                                                                        |  | –       |                        |  | $ | 0.95                   
|                        |  |                                                                      | 21,600  |  |                                                                        |  | –       |                        |  | $ | 1.20                   
|                        |  |                                                                      | 8,400   |  |                                                                        |  | –       |                        |  | $ | 1.94                   
|                        |  |                                                                      | 75,000  |  |                                                                        |  | –       |                        |  | $ | 6.86                   
|                        |  |                                                                      | 60,000  |  |                                                                        |  | –       |                        |  | $ | 7.97                   
|                        |  |                                                                      | 130,000 |  |                                                                        |  | –       |                        |  | $ | 6.59                   
|                        |  |                                                                      | 90,000  |  |                                                                        |  | –       |                        |  | $ | 6.11                   
|                        |  |                                                                      | 67,500  |  |                                                                        |  | 22,500  | (1)                    |  | $ | 3.48                   
|                        |  |                                                                      | 45,000  |  |                                                                        |  | 45,000  | (2)                    |  | $ | 4.35                   
|                        |  |                                                                      | 22,500  |  |                                                                        |  | 67,500  | (3)                    |  | $ | 3.48                   
|                        |  |                                                                      | –       |  |                                                                        |  | 90,000  | (4)                    |  | $ | 3.53                   









11









|Name              |  | Number of 
securities underlying
 unexercised options
 (exercisable) |        |  | Number of 
securities underlying
 unexercised options
 (unexercisable) |  |        | Option 
exercise price |  |   | Option 
expiration date
|----------------- |  | -------------------------------------------------------------------- | ------ |  | ---------------------------------------------------------------------- |  | ------ | ---------------------- |  | - | -----------------------
|                  |  |                                                                      |        |  |                                                                        |  |        |                        |  |   |                        
|Teri L. Robinson  |  |                                                                      | 25,000 |  |                                                                        |  | –      |                        |  | $ | 1.81                   
|                  |  |                                                                      | 50,000 |  |                                                                        |  | –      |                        |  | $ | 1.03                   
|                  |  |                                                                      | 5,000  |  |                                                                        |  | –      |                        |  | $ | 1.75                   
|                  |  |                                                                      | 5,000  |  |                                                                        |  | –      |                        |  | $ | 1.50                   
|                  |  |                                                                      | 5,000  |  |                                                                        |  | –      |                        |  | $ | 1.50                   
|                  |  |                                                                      | 36,000 |  |                                                                        |  | –      |                        |  | $ | 1.20                   
|                  |  |                                                                      | 14,000 |  |                                                                        |  | –      |                        |  | $ | 1.94                   
|                  |  |                                                                      | 60,000 |  |                                                                        |  | –      |                        |  | $ | 6.86                   
|                  |  |                                                                      | 60,000 |  |                                                                        |  | –      |                        |  | $ | 7.97                   
|                  |  |                                                                      | 60,000 |  |                                                                        |  | –      |                        |  | $ | 6.59                   
|                  |  |                                                                      | 60,000 |  |                                                                        |  | –      |                        |  | $ | 6.11                   
|                  |  |                                                                      | 45,000 |  |                                                                        |  | 15,000 | (1)                    |  | $ | 3.48                   
|                  |  |                                                                      | 30,000 |  |                                                                        |  | 30,000 | (2)                    |  | $ | 4.35                   
|                  |  |                                                                      | 15,000 |  |                                                                        |  | 45,000 | (3)                    |  | $ | 3.48                   
|                  |  |                                                                      | –      |  |                                                                        |  | 60,000 | (4)                    |  | $ | 3.53                   
|                  |  |                                                                      |        |  |                                                                        |  |        |                        |  |   |                        
|                  |  |                                                                      |        |  |                                                                        |  |        |                        |  |   |                        
|Laurie A. Straten |  |                                                                      | 12,000 |  |                                                                        |  | –      |                        |  | $ | 1.81                   
|                  |  |                                                                      | 25,000 |  |                                                                        |  | –      |                        |  | $ | 1.03                   
|                  |  |                                                                      | 9,000  |  |                                                                        |  | –      |                        |  | $ | 1.95                   
|                  |  |                                                                      | 1,250  |  |                                                                        |  | –      |                        |  | $ | 1.75                   
|                  |  |                                                                      | 1,250  |  |                                                                        |  | –      |                        |  | $ | 1.50                   
|                  |  |                                                                      | 1,250  |  |                                                                        |  | –      |                        |  | $ | 1.50                   
|                  |  |                                                                      | 18,000 |  |                                                                        |  | –      |                        |  | $ | 1.20                   
|                  |  |                                                                      | 7,000  |  |                                                                        |  | –      |                        |  | $ | 1.94                   
|                  |  |                                                                      | 25,000 |  |                                                                        |  | –      |                        |  | $ | 6.86                   
|                  |  |                                                                      | 90,000 |  |                                                                        |  | –      |                        |  | $ | 7.97                   
|                  |  |                                                                      | 60,000 |  |                                                                        |  | –      |                        |  | $ | 6.59                   
|                  |  |                                                                      | 60,000 |  |                                                                        |  | –      |                        |  | $ | 6.11                   
|                  |  |                                                                      | 45,000 |  |                                                                        |  | 15,000 | (1)                    |  | $ | 3.48                   
|                  |  |                                                                      | 30,000 |  |                                                                        |  | 30,000 | (2)                    |  | $ | 4.35                   
|                  |  |                                                                      | 15,000 |  |                                                                        |  | 45,000 | (3)                    |  | $ | 3.48                   
|                  |  |                                                                      | –      |  |                                                                        |  | 60,000 | (4)                    |  | $ | 3.53                   



|(1) | Becomes exercisable as to the unexercisable portion on May 12, 2020.
|--- | --------------------------------------------------------------------

|(2) | Becomes exercisable as to additional cumulative increments of one-half of the unexercisable
portion on May 17, 2020 and 2021.
|--- | -----------------------------------------------------------------------------------------------------------------------------

|(3) | Becomes exercisable as to cumulative increments of one third of the unexercisable portion on
May 9, 2020, 2021 and 2022.
|--- | ------------------------------------------------------------------------------------------------------------------------

|(4) | Becomes exercisable as to cumulative increments of 25% of the unexercisable portion on August
8, 2020. 2021, 2022 and 2023.
|--- | ---------------------------------------------------------------------------------------------------------------------------



Option Exercises in Last Fiscal Year



Four of the five named executive officers exercised stock options
during 2019. The table below shows the realized value and the number of options exercised for those four individuals. None of our
officers hold stock awards; accordingly, no stock awards vested during 2019.









12







Option Exercises and Stock Vested



|             |  | Value realized  on exercise (1) |         |  | Number of shares  acquired on exercise | 
|------------ |  | ------------------------------- | ------- |  | -------------------------------------- | 
|Mr. Bradley  |  | $                               | 338,400 |  |                                        | 
|Mr. Fritz    |  |                                 | 171,600 |  |                                        | 
|Mr. Lavin    |  |                                 | –       |  |                                        | 
|Ms. Robinson |  |                                 | 167,400 |  |                                        | 
|Ms. Straten  |  |                                 | 96,000  |  |                                        | 



|(1) | The value realized is the difference between the fair market value of the Company’s common stock on the date of exercise
(the closing price reported by Nasdaq) and the exercise price of the option.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Executive Management Bonus Plan (Non-equity
Incentive Plan)



The salary and cash bonus of the named executive officers are
determined by the Compensation Committee. The compensation appearing in the Summary Compensation Table above under the caption
"Non-Equity Incentive Plan Compensation" is paid pursuant to an executive management bonus plan (the “EMB Plan”).
The EMB Plan is administered by the Compensation Committee. Among other things, the Compensation Committee selects participants
in the EMB Plan from among the Company’s executive officers and determines the performance goals, target amounts and other
terms and conditions of awards under the EMB Plan. With respect to officers other than the chief executive officer, determinations
of base salary and of criteria relating to the EMB Plan are based in part on evaluations of such officers prepared by the chief
executive officer, which are furnished to and discussed with the Compensation Committee.



Director Compensation



Throughout 2019, we paid our non-employee directors a retainer
of $5,167 per month, with an additional fee of $500 per month for service on a board committee ($1,000 for a committee chairman).
Non-employee directors also received per diem fees of $1,000 for attendance in person at meetings of the board of directors,
or $500 for attendance by telephone. No per diem fees are paid for attendance at committee meetings. The Board in August
2019 approved issuance to each non-employee director of options to purchase an aggregate of 30,000 shares. The exercise prices
of all such options are the closing price of the Company’s common stock on the date of grant, which was $3.53 per share. The
following table summarizes compensation received by our directors for the year 2019:



|Name of Director            |  | Fees Earned
 or Paid
 in Cash (1) |        |  | Option
 Awards (2) |   |        | Total | 
|--------------------------- |  | --------------------------------- | ------ |  | ------------------ | - | ------ | ----- | 
|Chris A. Adams              |  | $                                 | 82,004 |  |                    | $ | 30,813 |       | 
|Charles E. Bradley, Jr. (3) |  |                                   | –      |  |                    |   | –      |       | 
|Louis M. Grasso (4)         |  |                                   | 10,334 |  |                    |   | –      |       | 
|Brian J. Rayhill            |  |                                   | 90,004 |  |                    |   | 30,813 |       | 
|William B. Roberts          |  |                                   | 71,004 |  |                    |   | 30,813 |       | 
|Gregory S. Washer           |  |                                   | 90,004 |  |                    |   | 30,813 |       | 
|Daniel S. Wood              |  |                                   | 90,000 |  |                    |   | 30,813 |       | 

____________________

(1)       This column reports
cash compensation earned in 2019 for Board and committee service.



(2)       This column represents
the dollar amount recognized for financial statement reporting purposes with respect to the 2019 fiscal year for the fair value
of stock options granted to the directors in 2019. The fair value was estimated using a binomial option-pricing model
in accordance with SFAS 123R. The fair value per option was $1.03, based on assumptions of 3.24 years expected life,
expected volatility of 38.77%, expected dividend yield of 0.0%, and a risk-free rate of 1.53%. In addition to the stock option
awards granted in 2019, our directors other than Mr. Grasso held at December 31, 2019 option awards granted in previous years.
The total options held at December 31, 2019 represent the right to purchase shares as follows: Mr. Bradley, 3,549,999 shares; Mr.
Adams, 300,000 shares; Mr. Rayhill, 417,000 shares; Mr. Roberts, 150,000 shares; Mr. Washer, 300,000 shares; and Mr. Wood, 315,000
shares.









13







(3)       Mr. Bradley's compensation
as chief executive officer of the Company is described elsewhere in this report. He received no additional compensation for service
on the Company's Board of Directors.



(4)       Mr. Grasso joined
our Board in October 2019.



Pension Plans



The Company's
officers do not participate in any pension or retirement plan, other than a tax-qualified defined contribution plan (commonly known
as a 401(k) plan).



Potential Payments Upon Termination or Change of Control



This section
provides information regarding payments and benefits to the named executive officers that would be triggered by termination of
the officer’s employment (including resignation, or voluntary termination; severance, or involuntary termination; and retirement)
or a change of control of the Company.



Each of
the named executive officers is an at-will employee and, as such, does not have an employment contract. In addition, if the officer’s
employment terminates for any reason other than a change of control of the Company, any unvested stock options are terminated,
and vested options become subject to accelerated expiration: ordinarily three months following separation from service, or twelve
months in the case of disability, retirement or death. Accordingly, there are no payments or benefits that are triggered by any
termination event (including resignation and severance) other than in connection with a change of control of the Company.



Benefits Triggered by Change of Control or Termination after
Change of Control



Our stock
option plans provide that each employee of ours who holds outstanding unexpired options under our stock option may have the right
to exercise such options following a change of control of the Company, without regard to the date such option would first be exercisable.
Each of the named executive officers holds such options. The “acceleration” of options is mandatory following certain
changes of control, and subject to the discretion of the Compensation Committee following certain others. Acceleration is mandatory
in the event of (i) the sale, or other disposition of substantially all of the Company’s assets, or (ii) a merger or
similar transaction in which shareholders of the Company hold less than 50% of the shares of the surviving entity; provided, however,
that acceleration following a merger or similar transaction is mandatory only if the holder suffers a Qualifying Termination (defined
below) within one year following the transaction, or if the surviving entity does not provide the holder with an equivalent award.
Acceleration is also mandatory if a holder suffers a Qualifying Termination within one year following (iii) a change within a three-year
period in the membership of a majority of the board of directors (excluding changes recommended by the board), or (iv) a person’s
acquisition of outstanding voting securities of the Company, other than directly from the Company and without approval of the board,
resulting in that person’s having beneficial ownership of greater than 25% of the Company.



Under our
stock option plans, the Compensation Committee may exercise its discretion to provide for acceleration under other circumstances
than those described above with respect to any particular stock option or class of stock options. The committee would expect to
exercise its discretion with the intention of preserving the value of the stock option award. To date, such discretion has not
been exercised. A “Qualifying Termination” is a termination of the holder’s employment by the Company other than
for cause, disability or death, or by the holder for “good reason” (principally relating to a material diminution in
the holder’s authority, compensation or responsibilities, or a relocation of greater than 50 miles). The preceding description
applies to options held by officers and employees. Options issued to non-employee directors accelerate without the exercise of
discretion upon any of the four categories of change of control described above.



As of December
31, 2019, no named executive officers would realize a benefit if unvested stock options were to become immediately exercisable
upon a change in control, based on the value of the shares underlying such options at the closing market price on December 31,
2019, which was $3.37 per share).



Management Structure



The board of directors is responsible for overseeing the management
of the Company. Its oversight is aimed at seeing to it that the company’s business is managed to meet our goals, and that
the interests of the shareholders are served.









14







Charles E. Bradley currently serves as both the chairman of
the board and our chief executive officer, and is the only member of our board who is not independent of the Company. Largely because
of the small number of directors (seven members in total), our board has chosen not to designate any individual formally as the lead
independent director. Each director retains his full oversight responsibility.



Our board structure supports the independence of our non-management
directors. Our audit committee, compensation committee and nominating committee are each composed solely of independent directors.
Our bylaws provide that any two directors have the authority to call meetings of the board of directors, as do specified officers,
including the president and the secretary. To enhance the possible use of that authority by independent directors, the corporate
secretary is under standing instructions to call a meeting at the instance of any one director.



The board believes that combining the chairman and chief executive
officer positions is currently the most effective leadership structure given Mr. Bradley’s in-depth knowledge of our business
and industry and his demonstrated ability to formulate and implement strategic initiatives. Mr. Bradley is continuously involved
in developing and implementing our strategies, working closely with the company’s other senior executives to seek continued
disciplined growth and excellence in operations. His close involvement in management places Mr. Bradley in the best position to
decide which business issues require consideration by the independent directors of the board. In addition, having a combined chairman
and chief executive officer enables us to speak with a unified voice to shareholders, customers and others concerned with our company.
The board believes that combining the chief executive and chairman roles, as part of a governance structure that includes oversight
of management responsibilities by independent directors, provides the preferred system for meeting the requirement that the Company
be managed in the best interest of our shareholders.



Risk Oversight



The board’s overall responsibility for directing the management
of the company includes risk oversight. The risk oversight function is performed at the board level, and by the Audit and Compensation
Committees.



The board of directors as a whole in its regular meetings discusses
and considers the risk inherent in the existing business of the Company and in proposed initiatives. Because the Company’s
business consists of extending consumer credit to individuals believed to be of higher risk than others (sub-prime credit), the
assessment of the risk assumed in such extensions of credit is a primary consideration on the part of the board. Risk oversight
is also a key function of the Audit and Compensation Committees.



The principal risk management function performed by the Audit
Committee is the ongoing assessment of the credit estimates and allowances periodically recorded in the Company’s books.
The committee reviews that assessment regularly. Other risk assessments performed by the Audit Committee include assessments of
contingent liabilities, and of other reserves and allowances.



The principal risk management functions performed by the Compensation
Committee are its setting and evaluation of objectives for the chief executive officer, in connection with its administration of
the executive management bonus plan. The committee recognizes that the company’s business of extending subprime credit inherently
includes a conflict between growing the business and managing the risk of credit losses: one means to increase the company’s
business is to offer credit on terms that are priced too low for the risk assumed. The Compensation Committee manages that risk
by insisting that objectives to grow the business are qualified by a mandate that credit quality be maintained at appropriate levels.
To some extent, such risk management is shared with the Audit Committee, which performs the primary oversight of whether credit
risk assumed is reflected with adequate allowances in the company’s financial statements.









15







Item 12. Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters.



The table below sets forth the number and
percentage of shares of the our Common Stock (our only class of voting securities) owned beneficially as of April 27, 2020 (the
latest practicable date) by (i) each person known to us to own beneficially more than 5% of the outstanding Common Stock, (ii)
each director and each named executive officer, and (iii) all of our directors and executive officers, as a group. Except as otherwise
indicated, and subject to applicable community property and similar laws, each of the persons named has sole voting and investment
power with respect to the shares shown as beneficially owned by such persons. Percent of class is calculated by reference
to 22,728,109 shares outstanding on April 27, 2020. Except as otherwise noted, each person named in the table has a mailing
address at 3800 Howard Hughes Parkway, Suite 1400, Las Vegas, Nevada 89169.



|Name and Address of Beneficial Owner                                                           |  | Amount and
 Nature of
 Beneficial
 Ownership (1) |            |     | Percent of 
Class | 
|---------------------------------------------------------------------------------------------- |  | ------------------------------------------------ | ---------- | --- | ----------------- | 
|Charles E. Bradley, Jr.                                                                        |  |                                                  | 5,678,108  |     |                   | 
|Chris A. Adams                                                                                 |  |                                                  | 412,213    |     |                   | 
|Louis M. Grasso                                                                                |  |                                                  | 3,000      |     |                   | 
|Brian J. Rayhill                                                                               |  |                                                  | 432,168    |     |                   | 
|William B. Roberts                                                                             |  |                                                  | 900,978    |     |                   | 
|Gregory S. Washer                                                                              |  |                                                  | 654,201    |     |                   | 
|Daniel S. Wood                                                                                 |  |                                                  | 481,165    |     |                   | 
|Jeffrey P. Fritz                                                                               |  |                                                  | 692,500    |     |                   | 
|Michael T. Lavin                                                                               |  |                                                  | 637,500    |     |                   | 
|Teri L. Robinson                                                                               |  |                                                  | 490,000    |     |                   | 
|Laurie A. Straten                                                                              |  |                                                  | 432,750    |     |                   | 
|All directors and executive officers combined (16 persons)                                     |  |                                                  | 15,114,132 | (2) |                   | 
|Black Diamond Capital Management, L.L.C., One Sound Shore Drive, Suite 200, Greenwich CT 06830 |  |                                                  | 3,456,363  | (3) |                   | 
|Citigroup Inc., 388 Greenwich Street, New York, New York 10013                                 |  |                                                  | 1,999,995  | (4) |                   | 
|Dimensional Fund Advisors LP, Building One, 6300 Bee Cave Road, Austin, Texas, 78746           |  |                                                  | 1,810,635  | (5) |                   | 
|Continental Advisors LLC, 227 W Monroe Street, Suite 5050 Chicago, IL 60606                    |  |                                                  | 778,505    | (6) |                   | 

__________

|(1) | Includes certain shares that may be acquired within 60 days after April 27, 2020 from the Company
upon exercise of options, as follows: Mr. Bradley, 2,974,999 shares; Mr. Adams, 300,000 shares; Mr. Rayhill, 405,000
shares; Mr. Roberts, 150,000 shares; Mr. Washer, 300,000 shares; Mr. Wood, 315,000 shares; Mr. Fritz, 717,500 shares; Mr. Lavin,
642,500 shares; Ms. Robinson, 490,000 shares; and Ms. Straten, 432,750 shares. Of Mr. Bradley’s shares, 1,419,906
are pledged to secure loan(s) to him. The calculation of beneficial ownership also includes, in the case of the executive officers,
an approximate number of shares each executive officer could be deemed to hold through contributions made to the Company's Employee
401(k) Plan (the "401(k) Plan"). The 401(k) Plan provides an option for all participating employees to purchase
stock in the Company indirectly by buying units in a mutual fund. Each "unit" in the mutual fund represents
an interest in Company stock, cash and cash equivalents.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Includes 8,871,399 shares that are not outstanding as of the date of this report, but which may be
acquired within 60 days after April 27, 2020 upon exercise of options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(3) | Based on a report on Schedule 13G/A filed by the named person and an individual on February 14, 2020.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(4) | Based on a report on Schedule 13G/A filed by the named person and certain subsidiaries on February
8, 2019.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(5) | Based on a report on Schedule 13G filed by the named person on February 12, 2020.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(6) | Based on a report on Schedule 13G/A filed by the named person and an individual on February 14, 2020.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 













16







Equity Compensation Plan Information



The table below presents information regarding securities
authorized for issuance under equity compensation plans, including the CPS 2006 Long-Term Equity Incentive Plan, as of December
31, 2019.



|Plan Category                      |  | Outstanding
 Options |  | Weighted 
average exercise
 price of
 Outstanding
 Options |  | Number of
 securities
 remaining available
 for future 
issuance under
 equity compensation
 plans
|---------------------------------- |  | -------------------- |  | ---------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------
|Plans approved by shareholders     |  | 15,347,949           |  | $4.59                                                      |  | 1,457,581                                                                                         
|Plans not approved by shareholders |  | None                 |  | N/A                                                        |  | N/A                                                                                               
|Total                              |  | 15,347,949           |  | $4.59                                                      |  | 1,457,581                                                                                         



CEO Pay Ratio



The Dodd-Frank Reform and Consumer Protection Act includes a
mandate that public companies disclose the ratio of the compensation of their CEO to their median employee. Our CEO-median employee
pay ratio calculation for 2019 is 77:1. We determined the pay ratio by dividing the total 2019 compensation of the CEO as disclosed
in the Summary Compensation Table by the total 2019 compensation of the median employee, using the same components of compensation
as used in the Summary Compensation Table for the CEO.



There have been no changes to our employee population or compensation
arrangements that we believe would result in a significant change in the pay ratio. Accordingly, we have computed the ratio by
reference to the same employee who we identified as our median employee for the year 2017, who was determined using the compensation
of employees who were actively employed on December 31, 2017. The total compensation of our median employee in 2019, using the
same methodology we use for Mr. Bradley’s Summary Compensation Table compensation, was $51,116. The total compensation of
the CEO Charles Bradley in 2019 was $3,929,770.



Item 13. Certain Relationships and Related Transactions,
and Director Independence



Citigroup.On July 10, 2008, CPS and its wholly owned
subsidiary Folio Funding II, LLC, as borrower, agreed with Citigroup Financial Products Inc. (“CGFP”), an affiliate
of Citigroup Inc. (“Citigroup”), to amend and restate the agreements governing a pre-existing revolving residual credit
facility. CGFP was the note purchaser in and administrative agent of that credit facility. The amendments included the issuance
to an affiliate of CGFP of a ten-year warrant to purchase (for nominal consideration) 2,500,000 shares of Company common stock,
which warrant was subsequently transferred to CGFP. Upon issuance of such warrant, CGFP became a person with beneficial ownership
of greater than 5% of the Company’s common stock. On March 10, 2010, the Company repurchased a portion of the warrant, representing
500,000 of the 2,500,000 shares available for purchase upon exercise of such warrant. On July 10, 2018, CGFP exercised the remaining
warrant, receiving 1,999,995 shares after surrender of shares equal in value to the nominal exercise price.



In September 2011, and approximately quarterly thereafter, CGMI
acted as a placement agent of asset-backed notes issued by securitization trusts sponsored by CPS. The issuances of investment-grade
and below investment-grade notes, and the placement compensation to CGMI, from January 1, 2016 to the present, are set forth in
the table below. In each case, one or more other placement agents also received compensation for placing such notes, as well as
CGMI.









17







|             |  | Investment-grade notes issued |             |  | Below investment-grade notes issued |   |            | Fees paid to CGMI | 
|------------ |  | ----------------------------- | ----------- |  | ----------------------------------- | - | ---------- | ----------------- | 
|January 2017 |  | $                             | 186,270,000 |  |                                     | $ | 20,050,000 |                   | 
|April 2017   |  |                               | 202,515,000 |  |                                     |   | 22,655,000 |                   | 
|July 2017    |  |                               | 199,525,000 |  |                                     |   | 25,300,000 |                   | 
|October 2017 |  |                               | 175,600,000 |  |                                     |   | 20,700,000 |                   | 
|January 2018 |  |                               | 169,964,000 |  |                                     |   | 20,036,000 |                   | 
|April 2018   |  |                               | 179,478,000 |  |                                     |   | 22,345,000 |                   | 
|July 2018    |  |                               | 207,967,000 |  |                                     |   | 22,308,000 |                   | 
|October 2018 |  |                               | 207,515,000 |  |                                     |   | 26,215,000 |                   | 
|January 2019 |  |                               | 228,695,000 |  |                                     |   | 25,705,000 |                   | 
|April 2019   |  |                               | 196,650,000 |  |                                     |   | 32,625,000 |                   | 
|July 2019    |  |                               | 213,242,000 |  |                                     |   | 30,271,000 |                   | 
|October 2019 |  |                               | 240,075,000 |  |                                     |   | 34,238,000 |                   | 
|January 2020 |  |                               | 227,240,000 |  |                                     |   | 32,760,000 |                   | 



On May 11, 2012, the Company entered into a one-year revolving
credit agreement (the "Citi Warehouse Agreement") and related agreements with affiliates of Citigroup and others, under
which the lenders have agreed to lend up to a maximum of $100 million, to be secured by automobile receivables. In connection with
the Citi Warehouse Agreement, the Company paid a closing fee of $1,000,000. The Company first incurred indebtedness under the Citi
Warehouse Agreement in the amount of $9.1 million on May 14, 2012. The Company used the proceeds of that draw for working capital.



Following earlier extensions in 2013, 2014 and 2016, the Company
and the lenders agreed on September 21, 2018 to extend the revolving term of the Citi Warehouse Agreement to September 21, 2020.
At the conclusion of the revolving period, at the election of either the borrower or the lender, the loans are to amortize for
an additional one year, and then become due in full. Loans under the Citi Warehouse Agreement bear interest during the revolving
period at a floating rate equal to one-month LIBOR plus 3.00%, but in all events no less than 3.75% per year, and during the amortization
period (if any) at a floating rate equal to one-month LIBOR plus 4.00%, but in all events no less than 4.75% per year. The
loans are subject to acceleration upon the occurrence of certain defined events of default. In connection with the 2018 renewal
of the Citi Warehouse Agreement, we paid a closing fee of $730,000.



The maximum principal amount of indebtedness
under the Citi Warehouse Agreement during 2019 was $100 million. During 2019, the Company paid $502.6 million of principal
and $2.5 million of interest on such debt. As of April 27, 2020, the principal amount owed was $63.8 million. The Company
intends to incur additional indebtedness under the Citi Warehouse Agreement from time to time as it purchases motor vehicle receivables
from dealers



CPS Leasing. The Company holds 80% of the outstanding
shares of the capital stock of CPS Leasing, Inc. ("CPSL"). The remaining 20% of CPSL is held by Charles E. Bradley, Jr.,
who is the chief executive officer and chairman of the board of directors of the Company. CPSL engaged in the equipment leasing
business, and is currently in the process of liquidation as its leases come to term. The Company financed the operations of CPSL
by making operating advances and by advancing to CPSL the fraction of the purchase prices of its leased equipment that CPSL did
not borrow under its lines of credit. The aggregate amounts of the advances made by the Company and outstanding to CPSL as of December
31, 2017, 2018 and 2019, were approximately $186,000, $153,000, and $122.000, respectively.



Subordinated Notes. Director William Roberts on December
3, 2007 purchased $4,000,000 of unsecured subordinated three-year notes directly from the Company. The interest rate was determined
by negotiation, and Mr. Roberts and the Company have agreed to a series of successive extensions of such indebtedness, with interest
paid at 10% per annum throughout the years 2016 through 2018. The Company in the years 2017 and 2018 paid interest of $400,000
per year on such notes, and in 2019 paid interest of $33,333, in accordance with those terms. The Company repaid the notes in full
on February 1, 2019.



Policy on Related Party Transactions
and Director Independence.The agreements and transactions described above, other than those described under the caption
“Citigroup,” were entered into by the Company with parties who personally benefited from such transactions and
who had a control or fiduciary relationship with the Company. It is the Company's policy that any such
transactions with persons having a control or fiduciary relationship with the Company may take place only if approved by the
Audit Committee or by the members of the Company's Board of Directors who are disinterested with respect to the transaction,
and independent in accordance with the standards for director independence prescribed by Nasdaq. Such policy is maintained in
writing in the charter of the Audit Committee. The agreements and transactions above were reviewed and approved by
the members of the Company's Board of Directors who were disinterested with respect to the transaction, except that the
subordinated notes transaction was reviewed and approved by the Audit Committee.









18









The seven directors of the Company are Charles E. Bradley,
Jr., Chris A. Adams, Louis M. Grasso, Brian J. Rayhill, William B. Roberts, Gregory S. Washer, and Daniel S. Wood, of whom Messrs.
Wood, Rayhill and Washer compose the Audit Committee. The Board of Directors has concluded that other than Mr. Bradley (who is
the Company's chief executive officer), each of the other six directors is independent in accordance with the director independence
standards prescribed by Nasdaq, and has determined that none of them has a material relationship with the Company that would impair
his independence from management or otherwise compromise his ability to act as an independent director.



Item 14. Principal Accounting Fees and
Services



Fees Paid to Auditors



The following table sets forth the fees accrued or paid to the
Company’s independent registered public accounting firms for the years ended December 31, 2019 and 2018. Crowe has served
as the Company’s independent registered public accounting firm since February 2009, and reported on the Company’s financial
statements for the years ended December 31, 2008 through 2019.



|Audit and Non-Audit Fees |  | 2019 |           |  | 2018 |  
|------------------------ |  | ---- | --------- |  | ---- | -
|Audit Fees (1)           |  | $    | 850,000   |  |      | $
|Audit-Related Fees (2)   |  |      | 188,550   |  |      |  
|Tax Fees (3)             |  |      | 287,635   |  |      |  
|All Other Fees           |  |      | –         |  |      |  
|TOTAL                    |  | $    | 1,326,185 |  |      | $



(1) Audit fees relate to professional services rendered in connection
with the audit of the Company’s annual financial statements and internal control over financial reporting, quarterly review
of financial statements included in the Company’s Quarterly Reports on Form 10-Q, and audit services provided in connection
with other statutory and regulatory filings.



(2) Audit-related fees comprise fees for professional services
that are reasonably related to the performance of the audit or review of the Company’s financial statements.



(3) The 2019 and 2018 tax fees represent services rendered in
connection with preparation of state and federal tax returns for the Company and its subsidiaries.



Audit Committee Supervision of Principal
Accountant



The
Audit Committee acts pursuant to a written charter adopted by the Board of Directors. Pursuant to the charter, the Audit
Committee pre-approves the audit and permitted non-audit fees to be paid to the independent auditor, and authorizes on behalf
of the Company the payment of such fees, or refuses such authorization. The Audit Committee has delegated to its chairman and
its vice-chairman the authority to approve performance of services on an interim basis. In the fiscal years ended December
31, 2019 and December 31, 2018, all services for which audit fees or audit related fees were paid were preapproved by the
Audit Committee as a whole, or pursuant to such delegated authority.



In the course
of its meetings, the Audit Committee has considered whether the provision of the non-audit fees outlined above is compatible with
maintaining the independence of the respective audit firms, and has concluded that such independence is not and was not impaired.









19







PART IV







|Item 15. | Exhibits and Financial Statement Schedules.
|-------- | -------------------------------------------

(3)Exhibits:



The exhibits
listed in the Exhibit Index in Part IV, Item 15. “Exhibits and Financial Statement Schedules” of the 2019 Form 10-K were
filed or incorporated by reference as part of the 2019 Form 10-K and the exhibits listed in the Exhibit Index below are
filed as part of this Amendment.



EXHIBIT INDEX







|31.1 | Rule 13a-14(a) certification by Chief Executive Officer
|---- | -------------------------------------------------------
|31.2 | Rule 13a-14(a) certification by Chief Financial Officer















20







SIGNATURES



Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the registrant has caused this amendment to report to be signed on its behalf
by the undersigned, thereunto duly authorized.





|               |  | CONSUMER PORTFOLIO SERVICES, INC. (registrant)
|-------------- |  | ----------------------------------------------
|April 29, 2020 |  | By:                                           
|               |  |                                               























21