Banks, captives, and independent finance companies have been curbing originations and trimming staffs as they struggle to navigate the difficult lending environment. Below is a list of companies that have curtailed or exited the business since January.
Company: AmeriCredit Corp.
Action(s): Slashed originations in half; shed 500 positions; deactivated 4,600 dealers; canceled third-party lease agreement
Background: The company was shut out of the asset-backed securitization market, its primary method of funding
Company: BMW Financial Services
Action(s): Cut back on lease originations
Background: Residual value losses
Company: Capital One Auto Finance
Action(s): Reduced originations by 33%
Background: Stopped originating the riskiest 25% of subprime loans and virtually exited the near-prime space altogether
Company: Chrysler Financial LLC
Action(s): Stopped leasing on Aug. 1
Background: Residual value losses
Company: CitiFinancial Auto
Action(s): Reduced originations by 33%; fired 800 employees; closed half its loan-production offices; shed 3,000 dealer-clients
Background: An effort to overcome challenges posed by the macroeconomic environment and declining vehicle sales
Company: Fifth Third Bancorp
Action(s): Cut loan originations by 50% and slashed management jobs by 40%; effectively eliminated the division that made loans through the 50 largest dealerships and dealership groups nationwide; limited leasing
Background: Part of a reallocation of capital to more core and profitable businesses
Company: GMAC LLC
Action(s): Shuttered 75% of its auto finance offices and fired 930 people; stopped leasing in Canada on Aug. 1
Background: Residual value losses
Company: HSBC Auto Finance
Action(s): Stopped originating auto loans at the dealership and online; fired about 500 employees
Background: Meant to enable the company to focus on its core businesses — credit cards, consumer loans, and mortgage lending
Company: Huntington Bancshares
Action(s): Stopped leasing vehicles with eight-cylinder engines
Background: Residual value losses
Company: Triad Financial Corp.
Action(s): Terminated indirect originations effective May 23; fired nearly 350 employees since September 2007
Background: Blamed “extraordinarily unstable” conditions in the financial markets for hindering its ability to fund business; faced a credit rating downgrade from Standard & Poor’s to “negative” from “stable”
