Ally Financial Inc. “expects solid performance through all business cycles,” the bank said during a special credit risk management conference call today.
Ally held the call to address the recent attention the retail auto lending industry has received from the financial community, Christopher Halmy, chief financial officer, said.
“We’re doing this call because we want to provide more transparency and give the financial community a better understanding of how we manage the auto business and the risk of the retail loan book,” he said.
One “key area” the bank wanted to address was layered risk, Chief Risk Officer David Shevsky, also on the call, said.
“We have 13 different limits here at Ally, we call them guardrails that are in place to limit risk and nine of those guardrails refers specifically to layered risk,” he said. “One simple example is that we do not allow loans 84 month loans for nonprime customers.”
The bank rolled out 84 month auto loans nationally in 2015, however those terms are only available to Ally’s top three credit tiers. The board also set “more stringent max vehicle age, mileage, LTV, PTI, and minimum Fico,” according to Ally.