Auto finance was a bright spot for JPMorgan Chase last quarter.
Year over year, origination volume at Chase Auto Finance grew 9.4% to $5.8 billion, bolstering the auto portfolio 10.7%, to $47.5 billion.
Higher auto loan and lease balances helped prop up revenue for the bank’s mortgage banking and consumer lending division last quarter. Net revenue hit $2 billion, up 10% from the prior-year quarter.
As for loan performance, the net chargeoff rate for the auto portfolio fell to 0.49% from 1.36% in 2Q09. Meanwhile, net chargeoffs grew to 0.39% from 0.10% in the mortgage portfolio and to 4.04% from 2.79% in the student loan portfolio.
Overall, JPMorgan Chase reported $4.8 billion of earnings for the second quarter, up from $2.9 billion in the prior-year period.
Credit unions responded to the dearth of credit available in the consumer credit markets by offering financing for automobiles when banks and finance companies were running away from dealerships like a herd of deer being chased by hungry bears. When GM and Chrysler were on financial life support in bankruptcy awaiting a transfusion (or injection) of money from the US Government, credit unions were providing financing to consumers with low interest loans through dealers to keep the auto industry sales moving and the industry from collapsing. It will be very interesting to see if the auto industry and the dealership community will remember the credit unions that were there when things were tough and continue to build and sustain the relationships that were forged during the credit crisis. Credit unions still have the spirit and liquidity to lend, so let’s see how much the dealers will continue to support those credit unions now that the credit freeze is beginning to thaw and more banks and finance companies enter into the indirect lending markets.