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An Explanation of Delinquency Rate Discrepancies Between S&P and the N.Y. Fed

Inclusion of charge-offs when calculating 90-day delinquencies may spell the difference between the 4.47% rate reported by the New York Federal Reserve and the 1.86% subprime rate recorded by S&P Global Ratings at yearend 2018. According to the data dictionary in the N.Y. Fed’s research, delinquency data includes “severely derogatory” accounts, or those with reports […]

How Frightening Are Subprime Auto Loans?

One of the lasting legacies of the financial crisis is the market’s tendency to take any sign of bad news and frame it in the context of 2008. Collateralized loan obligations, for instance, have been deemed scary because of similarities to the collateralized debt obligations that were riddled with bad mortgages. Now, auto loans are under the microscope. […]

Capital One Auto Originations Decelerate Amid Increased Competition

Capital One Financial Corp.’s auto origination volume fell 5% last year, according to a fourth-quarter earnings report. In an earnings call, Chief Executive Richard Fairbank attributed the deceleration to an increase of competitive intensity in the auto industry. Auto originations fell to $26.2 billion in 2018, compared with $27.7 billion in 2017. Despite Capital One’s […]

GM Financial Profits, Originations Grow in 3Q

General Motors Financial boasted increased profits, higher loan originations, and improved credit quality in the third quarter, according to yesterday’s earnings. Net income for the quarter shot up 118% to $441 million, as the captive notched its fifth straight quarter of higher credit scores underlying finance volume. “We financed 43% of GM new vehicles sales […]

Captives, Banks Lag in Industry Efforts to Reduce Delinquencies

Delinquency rates are down for the auto finance industry overall, but captives and banks are showing increased rates, Melinda Zabritski, Experian’s senior director of automotive financial solutions, told Auto Finance News. Industry-wide 30-day delinquencies dropped to 2.1% of total loans outstanding in 2Q18 compared with 2.2% a year ago. Meanwhile, 60-day delinquencies fell to 0.64% from […]