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Industry News

  • California task force busts $5M auto fraud ring
    by Nicole Casperson on June 24, 2019 at 5:30 pm

    A fraud scheme racking up more than $5 million from auto financiers has been busted after an 18-month investigation identified 21 perpetrators operating in an organized crime ring, according to the San Diego County District Attorney’s office. More than 100 vehicles — ranging from high-end luxury vehicles to RVs — were stolen in the scheme. […]

  • Federal Reserve amends stress test model for auto...
    by Joey Pizzolato on June 24, 2019 at 4:30 pm

    The Federal Reserve has changed the way it calculates estimated auto loan losses in the 2019 Dodd-Frank Act stress test, according to the Supervisory Stress Test Results published last week. Specifically, the Federal Reserve enhanced the probability of default component and the loss-given default component. The report notes that these adjustments change the way certain […]

  • Bipartisan robocalls bill assigns stiffer FCC...
    by Bianca Chan on June 24, 2019 at 3:00 pm

    A bipartisan bill introduced by House lawmakers on Thursday would give the Federal Communications Commission the authority to issue harsher penalties against callers who violate robocall laws, according to a press release by the House Committee on Energy and Commerce. This week, the bill will move forward through the Communications and Technology Subcommittee. Led by […]

  • Fighting fraud with fintech
    by Lana Johnson on June 24, 2019 at 2:46 pm

    To counter the continued rise in fraud, auto lenders of all sizes are counting heavily on risk management and loss mitigation. For small lenders, risk management may be the part-time responsibility of one employee. Banks, captives, and credit unions may devote an entire team to the endeavor. However, the degree of diligence devoted to risk […]

  • Weakening Credit Spurs Santander Downgrade
    by Nicole Casperson on June 21, 2019 at 5:31 pm

    Santander Consumer USA's rating has been cut to neutral from positive by Susquehanna Financial Group as shifts in the lender's portfolio dynamics make it appear that credit is worsening in the short term, SFG’s bank and auto finance analyst Jack Micenko told Auto Finance News. The most notable change relates to SCUSA’s troubled debt restructuring […]

  • Off-Lease Vehicles Boost Used-Car Prices
    by Joey Pizzolato on June 21, 2019 at 5:01 pm

    Stricter leasing terms are propping up the used-vehicle market, according to Edmunds’ first-quarter Used Vehicle Report. Average used-vehicle prices hit a record-breaking high of $20,247, compared with $19,700 in the same prior-year period. Edmunds’ research attributes the increase partially to “the return [to market] of a record volume of vehicles leased in 2016,” the report […]

  • KBRA Withdraws Ratings as Honor Finance...
    by Bianca Chan on June 21, 2019 at 4:55 pm

    Honor Finance’s 2016 securitization has been withdrawn from Kroll Bond Rating Agency’s surveillance after being paid in full, the rating agency announced this week. The transaction had suffered two downgrades since July 2018, a month before the defunct company transferred its servicing to Westlake Portfolio Management. On June 17, servicer Westlake Portfolio Management exercised its […]

  • Dealer Group CFO Admits to Defrauding Ford Credit...
    by Nicole Casperson on June 20, 2019 at 4:52 pm

    Nearly a year after Ford Motor Credit sued Reagor-Dykes Auto Group for hiding one of the largest floorplan financing frauds in history, the captive is finally receiving closure. The Texas-based dealership group’s Chief Financial Officer Shane Smith has pleaded guilty to defrauding the captive, shelling out $50 million in restitution to Ford Credit and other […]

  • Porsche Financial Services Pilots Auto Insurance...
    by Joey Pizzolato on June 20, 2019 at 3:56 pm

    Porsche Financial Services has introduced an in-house, pay-per-mile auto insurance program in Illinois and Oregon to supplement its leasing and financing program, according to a company release. The program, developed in partnership Atlanta-based pay-per-mile insurance company Mile Auto, will allow drivers to submit their mileage via a photograph of the odometer once a month rather […]

  • Consumers Want Refi Options in Online Portals,...
    by Bianca Chan on June 20, 2019 at 3:17 pm

    Refinancing options topped the list of features consumers want in online auto loan portals, according to a survey conducted by Auto Finance News. The survey, conducted earlier this month, asked consumers about the most important features in an online auto loan portal and preferences when it comes to digital servicing techniques. Among respondents, 35% seek […]

  • Slowing Inventory Turnover Reduces Floorplan ABS...
    by Marcie Belles on June 19, 2019 at 5:26 pm

    As vehicles idle on dealers’ lots, auto lenders face slower repayment of their floorplan loans. Nissan Motor Acceptance Corp., for one, has been in breach of a floorplan trigger since February, when its three-month payment rate dropped below 35%. As such, NMAC had to increase credit enhancement levels in its floorplan trust. Ally Financial, Ford […]

  • Competitive (Dis)Advantage: The Data Reporting...
    by Nicole Casperson and Bianca Chan on June 19, 2019 at 3:30 pm

    A new accounting regulation with a staggered implementation schedule is on track to disrupt the auto finance playing field. The Financial Accounting Standards Board (FASB) rule called Current Expected Credit Losses — or CECL, for short — requires lenders to reserve for the lifetime of a loan’s losses upon origination, which could double loss provisions […]

  • SNAAC Reveals How a Customer-Centric Strategy Can...
    by Bianca Chan on June 19, 2019 at 2:00 pm

    As delinquencies rise and an economic downturn looms, limiting credit risk and mitigating losses are top of mind for many auto financiers. “Delinquencies are up, losses are up, so what are we going to do to contain them?” Chris Mitcham, senior vice president of servicing at Security National Automotive Acceptance Co., asked the audience at the Auto Finance […]

  • New-Car Model Shifts as Short-Term Leasing Stocks...
    by Bianca Chan on June 19, 2019 at 1:00 pm

    An emerging trend — where dealers use off-lease vehicles from short-term leases to stock certified pre-owned (CPO) programs — is shifting the way consumers purchase new cars. This trend is occurring across segments and price points, according to Matt DeLorenzo, senior managing editor of Kelley Blue Book. Kia and Toyota are two OEMS that are both “aggressive in it,” he said, […]

  • Auto Outstandings Grow 30% YOY at 5 Largest...
    by Nicole Casperson on June 18, 2019 at 5:06 pm

    Auto outstandings at the nation’s five largest credit unions increased year over year, totaling $32.5 billion last year compared with $25.2 billion in 2017, according to Big Wheels Auto Finance Data 2019.  No. 1-ranked Navy Federal Credit Union notched a 9.1% increase last year in its auto portfolio, to $13.8 billion. Among the nation’s top […]

  • Chinese Tariffs to Complicate Underwriting, Slow...
    by Joey Pizzolato on June 18, 2019 at 5:00 pm

    In addition to increasing vehicle prices, the 25% tariffs imposed on Chinese parts and goods by the Trump administration will complicate the underwriting process for lenders and slow down innovation in the auto industry, Jonathan Smoke, chief economist at Cox Automotive, told Auto Finance News. “Americans aren’t suddenly making 10% or 25% more income,” Smoke […]

  • Despite Stronger May, ABS Credit Performance...
    by Bianca Chan on June 18, 2019 at 4:42 pm

    After 16 straight quarters of improvement, credit quality in prime auto loan securitizations will start to “deteriorate,” according to a newly released report from Kroll Bond Rating Agency. While May servicer reports showed improving credit performance across prime and nonprime auto securitizations, performance is predicted to weaken through the summer months. “With the effects of the […]

  • CFPB Supervisory Highlights Provide Guidance on...
    by Peter Cockrell on June 18, 2019 at 2:59 pm

    Under Richard Cordray’s Consumer Finance Protection Bureau (CFPB), it was “compliance malpractice” not to take heed of the Bureau’s enforcement actions when determining how to comply with federal consumer finance laws. Both Acting Director Mick Mulvaney and current CFPB Director Kathy Kraninger have stated that the Bureau will no longer engage in such “regulation by enforcement.” While this change in position is […]

  • Senators Urge Regulatory Oversight of AI to...
    by Nicole Casperson on June 17, 2019 at 5:39 pm

    As auto lenders increasingly turn to technology like artificial intelligence to improve business practices, two senators are pressing regulators to ensure anti-discrimination laws keep up with the innovation. Sen. Elizabeth Warren (D-Mass.) and Doug Jones (D-Ala.) sent a letter to the leaders of the Consumer Financial Protection Bureau, Federal Reserve, Office of the Comptroller of […]

  • Extended-Term Contracts Lower Credit Quality in...
    by Joey Pizzolato on June 17, 2019 at 5:33 pm

    Extended-term contracts, an increased loan-to-value ratio, and a rise in the number of loans with lower Fico scores are responsible for weakened credit quality in Bank of the West’s $764 million auto trust securitization — the bank’s first of the year — according to a Fitch Ratings’ presale report. The average term of loans securitized […]