BankUnited saw $85 million in new indirect auto loan growth during the first quarter of 2014, down from $180 million during the fourth quarter of 2013.
According to the company’s 2013 10-K filing, the majority of indirect auto loans were to borrowers in Florida, New York, and New Jersey. As of Dec, 31, 51% of its indirect auto portfolio was new car financing and 49% was used car financing.
To mitigate compliance risk with respect to its indirect auto business Kanas said the bank put in place dealer due diligence and monitoring processes, as well as initiating a detailed internal review process.
“We are looking particularly at that business,” Kanas said. “And as we begin to deploy this capital, we’re getting more and more discriminating about where we’re willing to put capital to work. And that’s one of the businesses that’s low margin, and in the crosshairs with the regulators.”