Bank of America’s consumer relief program will cover auto loans, along with mortgage, home equity, credit cards and small business loans, Auto Finance News has learned. In fact, the big bank has paused auto repossessions, a spokesperson confirmed. Bank of America boasts a $51 billion auto portfolio, the company noted in its latest earnings call.
“Clients can request to defer [auto] payments, with payments added to the end of the loan,” the company noted. The bank’s blanket relief program will also pause all negative credit reporting for up-to-date clients. Deferments will be granted on a case-by-case basis, the bank said.
There has been concern voiced from regulators about deferred, interest-bearing payments being tacked onto the end of loan, putting consumers in a challenging financial situation in the long term.
Bank of America is also pushing for consumers to leverage its digital platforms during this time of crisis, when social distancing is a national requirement. Erica, the company’s virtual financial assistant, has more than 10 million active users, according to the bank’s fourth-quarter earnings call.
In fact, the bank’s direct-to-consumer online portal accounted for 56% of direct auto loan originations, according to the earnings call. Direct auto loan volume has ramped up in the last couple of years as the bank keeps “investing heavily” in its online platform, Chief Financial Officer Paul Donofrio said during the earnings call, noting that more than 2 million vehicles are now available through the direct lending program.