FASB mulls delay of new credit loss rule for small lenders, CUs

The two years of transition to the Financial Accounting Standards Board rule called Current Expected Credit Losses — or CECL, for short — may extend to five years for smaller banks and credit unions.  FASB met this week and voted for a proposal to extend the implementation deadline, but only for small public banks, private lenders, […]

• Nicole Casperson
• July 19, 2019
• Risk Management

Loan Losses Are Worse Than Expected at Two Subprime Auto Lenders

Recent subprime-auto bonds from Prestige Financial Corp. and Exeter Finance Corp. are performing worse than anticipated, at a time when many competitors are at least meeting expectations, according to credit raters. The challenges both face may be remnants of a push for rapid growth a few years back, when these smaller lenders temporarily loosened credit […]

• Bloomberg News
• May 2, 2019
• Capital Markets, Credit Performance

Jumping In: Online Lenders Join the ABS Market

From the April issue: The auto securitization market is being injected with new blood. It’s been about 15 years since an auto financier securitized a new asset class, but Fair is gearing up to do just that. Fair, a used-car leasing platform with a subscription-based model, has started the process of getting a rating and […]

• Bianca Chan
• April 11, 2019
• Capital Markets, Credit Performance, Features, Risk Management

New Accounting Rule Likely to Hike Lending Costs

As U.S. financial institutions start to implement a new loan-loss accounting guideline this week, Jefferies Equity Analyst John Hecht forecasts higher lending costs down the road. The Current Expected Credit Losses (CECL) model, introduced by the Financial Accounting Standards Board in 2016, outlines how banking institutions account for and reserve against loan losses. Early adoption […]

• Bianca Chan
• January 3, 2019
• Archives, Compliance & Regulation, Earnings, Risk Management

4 Auto Finance Trends Shaping the Chinese Market

It’s clear that China’s auto finance market is vastly different from the United States, but it’s hard to conceptualize those differences until you’re on the ground facing them head-on. In hosting the Auto Finance Summit Asia earlier this month, the AFN team learned a lot about the industry as it exists in China from difficulties […]

• William Hoffman
• September 24, 2018
• Capital Markets

How Tariffs Will Impact China’s Auto Lending

SHANGHAI — China will remain the largest market for vehicle sales, but the impact of U.S. tariffs on China’s economy may accelerate the decline of an already slowing economy while adding an outsized effect on the automotive industry, Steve Cochrane, Chief APAC Economist at Moody’s Analytics, said during a session at the Auto Finance Summit […]

• William Hoffman
• September 10, 2018

Ford Captive Receives ‘Negative Outlook’ by Moody’s Citing OEM’s Headwinds

Moody’s Investor Service gave Ford Motor Credit a “negative outlook” and downgraded the lender one ranking above a non-investment grade status this week, but the score is largely driven by risks in the parent manufacturer’s business, Jason Grohotolski, vice president and senior credit officer in Moody’s financial institutions group, told Auto Finance News. The report […]

• William Hoffman
• August 30, 2018
• Capital Markets, Risk Management

Healthy Economy, Rising Challenges: How Climbing Interest Rates Highlight an Uncertain Future

After years of record lows, interest rates are on the rise again — but the Federal Reserve’s 25-basis-point hike in June has yet to send shockwaves through the industry. However, further rate increases — combined with rising gas and new-car prices, looming tariffs, and lengthening loan terms — have put the industry on track for […]

• Matthew Wood
• August 9, 2018
• Credit Performance, Features