FICO looked at a recent survey of bankers who deal in all types of credit (credit cards, mortgages, auto loans, etc.) and came up with an observation: Consumer demand for credit exceeds lenders' willingness to make loans. This is where we are, and this is where we're going to be for a while.
More troubling for our industry, FICO says that most of the respondents who oversee auto loans expect delinquencies to stay the same or get worse. There's a bit of a disconnection here, as Experian Automotive says delinquencies are actually going down.
So why are bankers so pessimistic?
I'll make my own observation: It may have less to do with delinquency numbers and more to do with tougher competition from the captive finance companies and Ally Financial, the preferred lender for Chrysler and GM dealers.