Huntington Sticks With Prime Loans Amid Interest Rate Hike | Auto Finance News | Auto Finance News

Huntington Sticks With Prime Loans Amid Interest Rate Hike

© Can Stock Photo / JohnKwan

Despite some lenders expanding credit standards to accommodate riskier loans, Columbus, Ohio-based Huntington Auto Finance is making sure it drives the appropriate yields based on its “buy box,” Richard Porrello, lead of auto finance, told Auto Finance News.

Lenders such as Wells Fargo Auto and Santander Consumer USA, meanwhile, have signaled a willingness to move down spectrum to capture riskier loans, according to The Wall Street Journal. The rise in interest rates could spark a desire for usually conservative lenders to ramp up risk, Porello said.

However, interest rates are still historically low, even with the Federal Reserve’s recent upticks. Meanwhile, interest rates and economic conditions have not served as a “recipe” for Huntington to change the consumer and credit standards it seeks, Porrello said. In fact, last quarter Huntington grew its super-prime portfolio 9% year-over-year to $12.1 billion.

This quarter, Porrello adopted a “don’t fix what isn’t broken” attitude. “Lenders that do change to a more full-spectrum [approach] — it’s because they aren’t happy with their results,” he said.

For Huntington Auto Finance, interest income was on the rise in the first quarter to $106 million from $97 million in the prior-year period. Meanwhile, delinquencies more than 30 days past due fell 14 basis points year over year, to 0.70% of the portfolio.

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