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Car Lenders' Double-Whammy: More Late Payments, Slumping Prices

By Kevin Wack

Ally Financial said Tuesday that its 2017 profits will likely be dinged by rising delinquencies on subprime auto loans, as well as by falling used-car prices, two trends long predicted by observers who noted that car loans were becoming less affordable for American consumers, particularly those with poor credit scores.


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Latest News

Despite Anti-Smoking Campaign, California Selling More Tobacco Bonds

– Last year, the state raised the smoking age and increased taxes on cigarettes; now it plans to issue another $618 million of bonds backed by payments it receives under the 1998 Master Settlement

OnDeck Adds Former Morgan Stanley Exec to its Board

– Jim Rosenthal, a former chief operating officer at Morgan Stanley, is joining the board of directors at OnDeck Capital.

Wellfleet and NXT Capital Debut 2017 CLOs

– Littlejohn & Co’s Wellfleet Credit Partners and mid-market corporate lender NXT Capital have each priced their first collateralized loan obligation of the year.

Spire Partners Prices 1st New Issue Euro CLO of March

– Spire Partners priced the first new Euro-denominated CLO deal for March, the €348 million Aurium CLO III last week, according to a report published Monday by Moody's Investors Service.

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Featured Articles

CLO Investors Warming to Longer Reinvestment Periods

– New issuance of collateralized loan obligations is so scarce that investors have been willing to make all kinds of concessions, in addition to prices and interest rates, to put their money to work.

CommonBond's CEO Says Fintech Charter Could Be a Game Changer

– In a Q&A, CommonBond CEO David Klein discusses how an OCC charter might benefit customers by lowering the cost to run a student loan refinancing

PACE Loan Problems Call Attention to Major Blind Spot

– Loans that go bad too quickly can signal underwriting problems, but rating agencies had no way of seeing this red flag.

Time to Cool It in Multifamily? Watch the Landlords, Some Banks Warn

– Some point to warning signs, such as rising vacancy rates and falling rents, which suggest a shakeout in multifamily lending could be imminent. But others insist that the multifamily business has never been better

Did Durbin Amendment Lead to Unintended Credit Card Splurge?

– Lost in the battle between banks and retailers — which is being fought with renewed vigor in the early days of the Trump administration — is any consideration of how caps on interchange fees have affected consumer spending patterns.

Flawed Reliance on Credit Scores Leads to Confusion

– Credit scoring models—whether from VantageScore, FICO, or any other developer— are designed to rank order consumers. Credits scores—the outputs of those models— are not designed to predict a fixed level of risk.

Aircraft Lessors Taking New Routes to Securitization

– Increasingly, these transactions are being structured to give lessors more flexibility in terms of both the types of collateral and the ability to actively trade aircraft. As a result, transactions more accurately reflect lesssors’ fleets

Canadian Banks Picking Up the Slack in US Credit Card ABS

– U.S. dollar denominated issuance by Canadian card companies has been rising for three years, and shows no signs of stopping, thanks to cheaper funding costs and increasing comfort levels of buyers south of the border.

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Shift from Leases to Loans Is Powering Solar Securitization

Owning may offer consumers more savings than leasing, but loans pose a different set of risks to investors when pooled into collateral for bonds.

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