Wells Fargo looks to increase vehicle loan automation

Wells Fargo Auto is hoping to increase automation within its loan approval process by investing in the company’s origination system and credit decision tools. Auto lenders are investing in technology as more customers view and buy cars online. Wells Fargo’s goal is to up decision automation to more than 70% by 2022, from 59% in 2020, “enhancing the customer experience while improving controls,” Mike Santomassimo, chief financial officer, said Friday on the fourth-quarter earnings call. Wells Fargo Auto had $5.3 billion in originations in the fourth quarter, a decrease of 22% from the same period in 2019, Santomassimo said, adding that the lender has tightened credit standards due to continued uncertainty surrounding the COVID-19 pandemic. Wells Fargo had $48.2 billion in auto outstandings as of the fourth quarter, an increase of less than 1% year over year. Meanwhile, auto loans 30-plus days past due clocked in at 1.77%, a decrease of 79 basis points from a year ago. The net charge-off rate for auto loans also decreased 30 bps YoY to 0.43%. Loan performance remains propped up by pandemic-related stimulus and payment assistance, Santomassimo noted. As of Dec. 31, $1.9 billion in Wells Fargo auto loans remained in deferral, or 4% of the total auto portfolio, a decrease from 6% last quarter and 10% at the end of June, according to the earnings presentation. Of loans that have exited a deferral program, 90% of the balances are current as of the end of the year in 2020, Santomassimo noted. Still, Wells Fargo continues to build its allowance for credit losses due to the pandemic, with auto loan allowance reaching $1.2 billion in the fourth quarter, or 2.55% of total auto outstandings. Across Wells Fargo’s entire portfolio, ACL increased to $19.7 billion, or 2.22% of total outstandings, from $10.5 billion a year ago. “The negative impact to our results from COVID is clear and will likely continue until broad-based vaccinations allow for clear and even economic recovery,” Chief Executive Charles Scharf said on the earnings call. “We're taking action for things in our control, but we'll remain cautious until there's more clarity around when these constraints will recede.” Shares of Wells Fargo & Co [ NYSE: WFC] were trading at $32.04, down 7.8% as of market close. Wells Fargo has a market capitalization of $132.5 billion. Auto Finance Innovation Summit, the premier event for technology in auto finance, returns March 16-17, 2021, as a virtual experience. The virtual experience will offer the quality networking and education of past events, all through an online platform. To learn more about the 2021 event and register, visit www.AutoFinanceInnovation.com .

Wells Fargo looks to increase vehicle loan automation

Auto refinance applications spike at RefiJet

Biden taps Gensler as SEC chairman, FTC’s Chopra as CFPB chief

Related Posts

Q4 brings positive delinquencies, mixed originations for auto finance

Carvana enjoys Q4 hike in finance GPU, origination volume

CPS sees decline in Q4 originations amid low-interest competition

Biden taps Gensler as SEC chairman, FTC’s Chopra as CFPB chief

INNOVATION & TECHNOLOGY

Auto refinance enters the spotlight

AFI 2021: Practical applications of AI and machine learning in auto finance

CORONAVIRUS

Powersports marketplace provider Rollick secures $8.5M in funding

Q4 brings positive delinquencies, mixed originations for auto finance

SPONSORED

Self-insurance, blanket coverage or CPI: Which is better for your auto loan portfolio?

Collateral Protection Insurance (CPI): What is CPI and what does it do?

Driving Customer Loyalty, Retention After Total Loss

About

Contact Us

Follow Us

Wells Fargo looks to increase vehicle loan automation

Already subscribed? Log in below.

Auto refinance applications spike at RefiJet

Biden taps Gensler as SEC chairman, FTC’s Chopra as CFPB chief

Related Posts

By subscribing you agree to our Terms of Use and Privacy Policy

CORONAVIRUS

SPONSORED

About

Contact Us

Follow Us