You’re welcome: The Fed gifts a strong auto finance sector

Apparently, Halloween is the new Christmas in auto finance. Yesterday, the Federal Reserve gifted the industry a 25-basis-point interest rate cut, the third time the Fed has cut rates this year. The central bank’s benchmark rate now stands at 1.5% to 1.75%. A present like that doesn’t even need gift wrapping. “We believe monetary policy […]

• JJ Hornblass
• October 31, 2019
• Auto Finance Summit, Capital Markets, Credit Performance, Earnings, Exclusive, Finance, Leasing, Risk Management, Sales & Marketing

Fed Cuts Rates a Quarter Point, Powell Says Policy in Good Place

Federal Reserve officials reduced interest rates by a quarter-percentage point for the third time this year and signaled a pause in further cuts unless the economic outlook changes materially. The Federal Open Market Committee altered language in its statement following the two-day meeting Wednesday, dropping its pledge to “act as appropriate to sustain the expansion,” while adding […]

• Bloomberg News
• October 30, 2019
• Archives, Bloomberg

AFS 2019: Chicago Fed debunks looming recession forecast

LAS VEGAS – A Federal Reserve Bank of Chicago senior economist yesterday discounted the likelihood of a recession in the U.S. economy, despite the expectations of many in the auto finance industry. “What causes us to go into a recession is some sort of bad event… and it has to be a bad economic event […]

• Bianca Chan
• October 29, 2019
• Auto Finance Summit, Risk Management

Loose auto underwriting points to ‘weak’ credit outlook, Moody’s says

Lenders did little to tighten auto loan underwriting last quarter despite worsening delinquency trends. Last quarter, 3.5% of bank respondents in the Federal Reserve's Senior Loan Officer Opinion Survey reported to have somewhat tightened credit standards. The remaining 96.5% said standards remained basically unchanged. Given the "rapid rise in auto loan debt," however, banks would […]

• Bianca Chan
• August 7, 2019
• Credit Performance, Risk Management

House Financial Services Committee urges oversight of alt-data

The use of alternative data by lenders could expand access to credit to more than 40 million consumers. Likewise, banks and credit unions are using alternative data to fight fraud and provide faster access to funds. However, regulatory uncertainty surrounds the use of alternative data in making lending decisions, according to the U.S. House Committee on […]

• Nicole Casperson
• July 25, 2019
• Compliance & Regulation, Risk Management

Federal Reserve amends stress test model for auto loan losses

The Federal Reserve has changed the way it calculates estimated auto loan losses in the 2019 Dodd-Frank Act stress test, according to the Supervisory Stress Test Results published last week. Specifically, the Federal Reserve enhanced the probability of default component and the loss-given default component. The report notes that these adjustments change the way certain […]

• Joey Pizzolato
• June 24, 2019
• Credit Performance, Risk Management

Senators Urge Regulatory Oversight of AI to Prevent Discrimination

As auto lenders increasingly turn to technology like artificial intelligence to improve business practices, two senators are pressing regulators to ensure anti-discrimination laws keep up with the innovation. Sen. Elizabeth Warren (D-Mass.) and Doug Jones (D-Ala.) sent a letter to the leaders of the Consumer Financial Protection Bureau, Federal Reserve, Office of the Comptroller of […]

• Nicole Casperson
• June 17, 2019
• Compliance & Regulation, Risk Management

Santander Consumer USA Initiates Second Stock Repurchase Program

Santander Consumer USA’s board of directors has authorized a plan to buy back $400 million of company stock this quarter, according to a May 24 Securities and Exchange Commission filing. The announcement comes on the heels of an inaugural $200 million share-repurchase program completed in January. The Federal Reserve Board of Governors did not object […]

• Joey Pizzolato
• May 28, 2019
• Capital Markets, Risk Management