BankUnited Puts Auto Under the Microscope | Auto Finance News | Auto Finance News

BankUnited Puts Auto Under the Microscope

canstockphoto6278009BankUnited’s indirect auto loan business is under the microscope thanks to increased regulation and low margins, CEO John Adam Kanas told analysts during the company’s earnings call Thursday.

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.”

  Like This Post
Latest Magazine Issue
Sign Up Email List