Auto lenders carefully avoid naming their competitors, especially when they want to criticize.
It’s always the unnamed other guy who gets “aggressive” in approving loans, making life harder, and -- shudder -- potentially riskier for everybody else.
That’s why it was refreshing this week when Jeffrey Brown, CEO of Ally Financial Inc., figuratively raised his hand on Tuesday and said: “We likely drove it,” referring to the heightened competition.
Ally has been open about going after more subprime share. At the same time, other lenders have received a lot of press coverage by complaining about hotter competition and potential risk in subprime -- criticisms lenders make in conjunction with explaining why their loan growth may have stalled.
Brown said Ally isn’t taking unreasonable risk. Rather, he said, the company is sticking to a “safe” part of subprime and avoiding the riskiest, deep subprime loans.
Ally said on Tuesday that subprime loans, which it defined as loans to customers with FICO scores below 620, accounted for 12 percent of its originations in the first quarter, up from 9 percent a year ago. Even with the increase, that’s below industry average for subprime mix, Brown said.
In a blog last year, I compared the auto lending community to “The Family Circus”comic strip, where the children blame invisible gremlins named Nobody, Not Me, and Ida Know for broken lamps, muddy footprints or crayon scribbles on the wallpaper.
It’s nice for a change to hear somebody say: It was us.