10 Hottest Auto Finance Stories of 2013

What was the hottest story in auto finance in 2013?

In auto lending, this was the Year of the Consumer Finance Protection Bureau.  For the most part, lenders were scrambling to understand the formulas and proxies the government agency would use to determine unfair lending practices. Even before yearend, the CFPB slapped Ally Financial with its largest penalty yet. 

Indeed, several of the year’s top stories centered on Ally. The year also saw the subprime space heat up. A few companies changed hands, private equity jumped deeper into the space looking for yields, and subprime underwriting standards eased.

Here we look at the 10 most-popular posts on AutoFinanceNews.net for 2013. The Top 10 posts offer a window into the 2013 agenda — and portend to what we can expect for 2014. The list:

1. Santander Files for IPO – In July, Santander Consumer USA filed an S-1 with the Securities and Exchange Commission, in advance of an initial public offering. While the filing did not specify a timeframe for the IPO, the underwriters, or the number of shares to be sold, it disclosed net tangible book value as $18.58 per share, as of March 31.
2. Ally Financial Slips Past Toyota Motor Credit for No. 1 Spot – 2013 saw Ally Financial slip past Toyota Motor Credit Corp. to claim the No. 1 spot in the Auto Finance News Big Wheels ranking. Ally ended 2012 with $67.3 billion of loans and leases outstanding, just $71 million ― 0.1% ― more than Toyota.
3. Alabama Sales Manager Charged With Fraud – In October, a former sales manager at a Birmingham Ala., Nissan-VW dealership was indicted by a federal grand jury for allegedly defrauding Capital One Auto Finance and others by submitting fake car loan applications.
4. CFPB May Sue Banks over Auto Loans and Markups, Sources Say – In February, at least four banks were told by the CFPB that they may be sued over seemingly discriminatory vehicle loans and interest-rate markups from auto dealers.
5. CFPB Slaps Ally With $98 Million Fair Lending Charge – This month, the CFPB and the Department of Justice ordered Ally Financial Inc. and Ally Bank to pay an $80 million in damages and $18 million in penalties for alleged violations of fair lending law in their auto financing operations. Ally Financial was expected to take a $98 million charge related to the settlement to its fourth quarter 2013 earnings.
6. CFPB on Warpath over Add On Products – In May, a published report indicated that the CFPB had issued subpoenas regarding the sale of extended warranties and other financial products.
7. CFPB Zeroes In on Indirect Auto Lending – In March, the CFPB made its first regulatory move in the auto finance sector, releasing a guidance bulletin aimed at dealer reserves and potential discriminatory practices.
8. Private Equity Is Still Jazzed about Subprime – In October, we spoke to the head of auto finance investments at one of the nation’s largest private equity firms (no names, please) and he told us that the firm is perfectly content and happy with growing its current investment in a subprime lender.
9. Ally Financial Only Bank to Fail Fed’s Stress Test – Last March, the Federal Reserve found that 17 of the largest banks in the U.S. could withstand a catastrophe. The only one that could not: Ally Financial.
10. Ally Files Suit Against Santander Consumer USA – In September, Ally Financial Inc. filed suit against Santander Consumer USA Inc. for allegedly stealing trade secrets and confidential information to create Chrysler Capital, a private-label financing unit developed with Chrysler Group LLC in May. As of yearend, the spat was continuing.

And the one story that just missed the Top 10:

CEO Marc Sheinbaum Leaves Chase Auto – Thasunda Brown Duckett replaced Marc Sheinbaum at the helm of Chase Auto Finance last February. Sheinbaum, who joined the auto unit in 2007, left to pursue other opportunities, the company said.