Wells Fargo Losses Decline as Auto Portfolio Shrinks

© Can Stock Photo / AndreyPopov

Wells Fargo Auto continues to downsize its portfolio and, as a result, is seeing fewer delinquencies and losses, the company reported during its second-quarter earnings call today.

The banks automotive net-charge offs are 10.3% lower compared with the same period the year before, while delinquencies are slightly down by 2.3% over the same period.

However, the overall decline in loans past due masks an uptick in late-term delinquencies. Loans 90 days or more past due increased 15.3% to $105 million.

Still, the delinquency rate is just a drop in the bucket for Wells Fargo’s $47.6 billion portfolio, which is down 18% year over year. The bank originated $4.4 billion auto loans during the quarter — down 3.3% year over year.  

The more significant loss on the quarter was the banks $1 billion consent order with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. The bank was fined in part for allegations that it force-charged consumers for insurance they didn’t need and were already paying for from a third party.     

As part of the order, Wells Fargo was assigned to submit a plan to the CFPB in June regarding how it would pay back consumers it had harmed. Wells Fargo declined to comment on the plan.

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As Assistant Editor at Auto Finance News, William specializing in compliance, operations, and subprime. As a Brooklyn implant by way of Ohio, he's happy to discuss the triumphs and pitfalls of Cleveland sports as well as the latest music trends. Former bylines include Candy & Snack Today, Inverse, and The Tennessean.

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