By on February 20, 2014

New Suckers At The Stock Photo Dealership

Just as total auto loan balances in Q4 2013 climb to $798.5 billion, the United States Chamber of Commerce has called upon the Consumer Financial Protection Bureau to draw up a detailed compliance guide for auto lenders returning to the fray.

Automotive News reports Experian Automotive saw $798.5 billion in total auto loan balances for Q4 2013, the highest recorded by the credit reporting bureau since the first numbers were published in 2007. Thirty-day delinquencies in the same period fell to 2.6 percent from their previous peak of 2.7 percent in 2012, though subprime loans — the source of most delinquencies — accounted for 36.2 percent of all outstanding loans, up from Q4 2012’s 35.7 percent.

Meanwhile, the U.S. Chamber of Commerce has tasked the CFPB with building a detailed compliance rulebook meant to standardize lending procedures and liabilities for collection actions undertaken by service providers. The request comes on the heels of a December 2013 consent order between the CFPB, Ally Financial and the U.S. Department of Justice, where the lender paid $98 million in restitution and penalties in a settlement regarding the use of the dealer reserve to issue higher interest rates on minority borrowers.

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36 Comments on “Auto Loan Growth Continues, Chamber Of Commerce Calls For Lending Rules...”

  • avatar

    He’s pointing at positions in the Kama Sutra he’d like them all to try.

  • avatar

    Dude is gonna shop an A7 and show up in a wrinkled polo shirt? His girlfriend looks like she’s ready for a porno.

  • avatar

    Get ready for 100 MONTH CAR LOANS!!!

    If they’d introduce 50-year fixed mortgages maybe they could jump start the housing market lol!

  • avatar

    Here’s how you explain it:

    Wall street started bundling home loans together, “mortgage backed securities” and selling slices of those loans to investors. They were making big money…so they started pushing the lenders to make more loans.
    The lenders had already given loans to borrowers with good credit – so they go bottom feeding – they lower their criteria…
    Before, you needed a credit score of 620 and a down payment of 20%. Now they’ll settle for a 500 with no money down.
    The buyer, a regular guy on the street, assumes the banks know what they are doing. He reaches for the American dream of owning a home.
    The banks knew securities based on crap loans were risky so to control the risk they started buying a new kind of insurance called the credit default swap. This allowed them to remove risk from their books and make more loans. They could make more money.
    One company was dumb enough to take on an unbelievable amount of risk…AIG. The teaser rate on the poor schlub who bought his home readjusts and goes up. He can’t pay. He defaults. Mortgage backed securities tank and AIG has to pay off all the banks they insured – all of them – all over the world – at the same time. AIG can’t pay up. All the banks book massive losses on the same day – and then they go under.

    The whole financial system goes down.

    • 0 avatar

      If people were only buying credit default swaps to insure assets they actually owned the system would have been fine. It’s the naked (speculative, not insuring a buyer’s underlying asset – e.g. buying fire insurance on your neighbor’s house) credit default swaps that took down AIG and the rest of the system. Some estimate that 75% of the credit default swaps on the market in 2008 were speculative naked swaps, not asset insurance.

  • avatar

    Man, I love all the stock photos of actors getting auto loans. I want to print them, and replace the stock photos that come in picture frames or something.

  • avatar

    “Brah, we could totally tag team this chick”

  • avatar

    “I can totally afford this car, thanks to all the money I save by cutting my own hair!”

  • avatar

    “I see here on the lease agreement, that once we sign, that you are required to abuse my pretend girlfriend in all the biblical ways, that we are to all attend a donkey show in TJ and participate in the act. I’d like to amend the contract to say that we will attend said donkey show for a minimum of 4 hours.”

  • avatar

    Why does every stock photo of a car dealer feature a salesman in a suit and not a polyester golf shirt and khakis? The only dude in a suit I’ve ever seen in a car dealership is me when I’m stopping in on the way home from work.

  • avatar
    Big Al from Oz

    As a teenager in Australia in the 70s I do remember it was impossible to obtain a new car loan that exceeded 48 months and a used car loan exceed 36 months.

    This seemed to be commonsense. Back then a person couldn’t get a home loan with a monthly repayment that exceeded 25% of his pre taxed income.

    I do think lending standards should be toughened, maybe not back to those levels, but to levels that are more responsible.

    I can see the people who claim we live in a free society, but sometimes the free need to be protected from themselves.

    Banks and other forms of financial services to have a duty of care, a responsibility for the consumer.

    So, is it better to have an industry that’s irresponsible or an individual. Which one will do the greatest harm to a nation?

    • 0 avatar

      The US (and the rest of the world) learned that “anyone with a pulse” financing eventually crashes and burns disastrously. More so with housing, but it won’t turn out well for cars either.

      There are a lot of stupid people that want new cars immediately, but I think some sort of entity should play a role in not allowing people to buy a vehicle (or a house) outside of their means. It’s common sense to a lot of people, but then there are others that can’t do basic math and need some intervention from someone that can use a calculator and give them a boot to the head if needed.

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