LAS VEGAS — Wells Fargo Auto is confident in the current health of the economy and auto industry, but the Federal Reserve’s rate hikes are slowing down portfolio growth, Jerry Bowen, executive vice president, told Auto Finance News during the 2018 Auto Finance Summit last week.
“There’s always a risk of unexpected events that could cause some turmoil in the economy,” Bowen said. “The risk we are most attentive to as we head into 2019 is the increase in rates that’s starting to slow down growth a little bit. If the Fed is a little too aggressive, that could start the [downturn] cycle.”
With the future interest rate environment in mind, Wells Fargo has to determine how to optimize growth if its portfolio continues to shrink, Bowen said. Wells Fargo Auto’s portfolio declined in the third quarter to $46.1 billion, according to its earnings released earlier this month.
However, rate hikes impact consumers most since the cost of financing vehicles will become higher. As such, Wells Fargo works to provide a strong customer experience by increasing efficiency with consumers and dealers.
“We’ve transformed our business over the last 18 months with the focus on how we better serve our customers,” Bowen said. “On the dealer customer side, we’re doing everything in our power to make us faster, more efficient, and easy to do business with. Our ability to do that helps the dealer better serve the consumer customer.”
As for Wells Fargo’s customers, the bank has updated its onboarding process to increase transparency with loan terms. “We’ve improved our onboarding process to make sure that when we make a loan to a consumer that the terms are exactly what the consumer thought they were getting,” Bowen said.
Check out the exclusive interview below, which is part of a special video series sponsored by White Clarke Group.
