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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 […]

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 […]

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 […]

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 […]

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 […]
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