Eight major banks tightened auto loan underwriting standards in the first quarter, according to the Federal Reserve’s Senior Loan Officer Opinion Survey on Bank Lending Practices.
Banks that tightened standards represented 16% of survey respondents, the highest ever recorded since the Fed began breaking out auto from the consumer loan segment.
By comparison, the percentage of respondents that had tightened standards last quarter was 8.9%, and was only 1.8% a year ago. The Fed survey results reflect responses from 67 domestic banks from March 23 to April 3. Twelve respondents said their banks did not originate auto loans to consumers.
Looking closer, seven “large banks,” constituting 42% of the big bank respondents, said they have tightened underwriting standards. Large banks are defined by the Fed as financial institutions that hold more than $250 billion in total assets.
While the Fed didn’t specify which banks responded to the survey, Bank of America, Capital One, J.P. Morgan Chase, U.S. Bank and Wells Fargo are among the largest banks that originate consumer auto loans.