New rules being announced by the Consumer Financial Protection Bureau would mean that the captive finance arms would be subject to oversight from the CFPB.
Following GM Financial’s subpoena from the Department of Justice, Santander Consumer said that it had received a subpoena as well related to
“production of documents and communications that, among other things relate to the underwriting and securitization of nonprime auto loans since 2007,”
The topic of subprime auto loans has been a hotly contested one at TTAC, with numerous commenters defending both the practice and the stability of recent run-up in subprime lending.
Buried in a feel good story about auto loans comes the news that subprime auto loans are at levels that we haven’t seen in nearly a decade.
The Office of the Comptroller of the Currency, a government entity that regulates and supervises banks, is sounding the alarm regarding risks related to auto loans.
While perusing Chevy’s website to see if there is any color of the 2014 Corvette that actually makes the car look halfway decent, I came across the financing offer pictured above. And, no, I did not enter any personal info that would lead GM’s captive Ally Financial (or whoever the hell GMAC is now) to deem me only eligible for such a high interest rate. Just what is going on here?
OEM captive financing arms are increasing their share of new car loans, with banks resorting to underwriting riskier loans in the used car market and to less credit-worthy buyers.
New technology is allowing buyers with no credit score – due to a lack of credit history or a personal bankruptcy – to get vehicle financing via examination of documents like the payment history of their cable or cell phone bill.