Chase Auto Finance has decreased the volume of 84-month auto loans it originates across all Fico bands, and continues to pull back on subprime, Gordon Smith, chief executive of JPMorgan Chase & Co. Consumer & Community Banking unit, said Monday during the 2016 Barclays Global Financial Services conference.
“Nothing in the data would suggest that there is a deterioration in that [longer term] space,” he said. “But it feels really more as a judgmental matter, that should we see a downturn in the economy — which ultimately of course will come — that will be an area that will end up being more stressed. So we have pulled back a little bit from that place.”
The company did not break out specific numbers for its 84-month loan volume. Separately, auto originations for borrowers with Ficos below 680 were at 19% in the first half of the year, versus 31% in 2008.
“I think in the first quarter of 2013 we made the decision that we would substantially pull out of the subprime lending space here for auto finance,” Smith said. “So, what you see here is a direct result of the actions that we took at that time.”
The industry average for auto originations with scores of less than 680 is “roughly 50%,” he added.
