Finance and Insurance Newsletter

JIM HENRY

Is CFPB guilty of spin?

12:01 am U.S. ET | Aug. 27, 2014
Remarks delivered by Consumer Financial Protection Bureau Director Richard Cordray and language used in a bureau statement last week were a lot harsher than the dry legalese of the consent order signed this month by the CFPB and First Investors Financial Services Group.... Read More »

 

Is rise in Q2 loan delinquencies a turning point?

12:01 am U.S. ET | Aug. 27, 2014
Industry-watchers insist that today's auto loan delinquency rates are low by historical standards. But a slight uptick in 30- and 60-day delinquencies in the second quarter could be a sign that the long decline in delinquencies could be reversing.... Read More »

 

F&I departments need a farm team

12:01 am U.S. ET | Aug. 27, 2014
The term “succession planning” is usually applied to dealer principals, but it can apply to F&I managers, too. Executives at two dealerships say store managers should nurture their own talent pool, so they have a ready replacement if a top F&I producer quits.... Read More »

 

'No evidence' of subprime auto loan bubble, Equifax economist says

12:01 am U.S. ET | Aug. 27, 2014
Equifax has joined other financial data crunching firms that dispute there's an alarming subprime auto loan bubble that's about to burst. Dennis Carlson, deputy chief economist for Equifax, said in an interview this week there's an easy tendency to decry subprime in general because of what happened in the past, and "it's not fair to do that.”... Read More »

 

The incentives debate: Who's being 'stupid'?

12:01 am U.S. ET | Aug. 25, 2014
Some big rivals dismiss American Honda sales boss John Mendel's grim warning that extended loan terms and other strategies being employed by competitors hurt resale values, customer loyalty and ultimately profits. So who's right?... Read More »

 

CFPB fines subprime lender First Investors Financial Services Group for sending credit bureaus inaccurate info

12:30 pm U.S. ET | Aug. 20, 2014
The Consumer Financial Protection Bureau fined subprime auto lender First Investors Financial Services Group nearly $3 million for knowingly providing inaccurate information to credit reporting agencies for at least three years.... Read More »

 

JIM HENRY

Did dealers hurt themselves with the carve out?

12:01 am U.S. ET | Aug. 20, 2014
There’s no mistaking that federal regulators are serious about policing auto lenders. By extension, auto dealers feel they’ve got a big target on their backs, too.... Read More »

 

Auto loans could get boost from revamped FICO scores

12:01 am U.S. ET | Aug. 20, 2014
A planned update in the way FICO scores are calculated should help some borrowers qualify more easily for auto loans by putting less weight on overdue medical debt when calculating credit scores, according to Fair Isaac Corp.... Read More »

 

Canadians stretch out auto loans as debt warnings go ignored

5:34 am U.S. ET | Aug. 20, 2014
The average term of a light-vehicle loan in Canada is 69 months, close to a peak of 72 months set in the third quarter of 2013, according to J.D. Power. Longer-term car loans are leaving Canadians in debt for a longer time, analysts say. And the borrowing binge adds to signs Canadians are continuing to buy big-ticket items and tuning out warnings about unsustainable debt growth.... Read More »

 

JAMIE LaREAU

Skipping wheel-and-tire was big mistake

12:01 am U.S. ET | Aug. 20, 2014
Wheel-and-tire insurance is a valuable product. There, I admit it. It's not the “snake oil” that a cynical friend once espoused it and other F&I products to be.... Read More »

 

Asbury targets underperformers, training as F&I gains stall

12:01 am U.S. ET | Aug. 20, 2014
Asbury Automotive Group's improvement in average F&I revenues per vehicle retailed has stalled this year. Like other publicly traded auto retailers, Asbury plans to concentrate on squeezing improvements out of its bottom performers in F&I revenue per vehicle retailed.... Read More »

 

Subprime auto loan growth is 'less pronounced' in context, Fed analysts say

12:01 am U.S. ET | Aug. 20, 2014
While auto lending is rising in all credit categories, subprime auto loans are growing the fastest because that segment dropped the most during the downturn, according to a study by four analysts from the Federal Reserve Bank of New York.... Read More »

 

U.S. Treasury to cut Ally stake

10:56 am U.S. ET | Aug. 14, 2014
The Treasury Department plans to cut its stake in Ally Financial by selling stock on the open market in its first divestiture since the company's initial public offering in April.... Read More »

 

Toyota: Favorable auto finance climate to continue driving U.S. retail volume

12:01 am U.S. ET | Aug. 13, 2014
An auto finance environment favorable to many U.S. consumers will continue to provide a tailwind for higher retail auto sales in 2014, a top Toyota executive said Tuesday.... Read More »

 

JIM HENRY

N.Y. Times' demands are misguided

12:01 am U.S. ET | Aug. 13, 2014
Subprime auto loans have gotten most of the attention, but an editorial in The New York Times on Saturday makes other demands dealers and lenders are sure to dislike.... Read More »

 

NADA, AFSA dispute New York Times editorial on subprime auto loans

12:01 am U.S. ET | Aug. 13, 2014
Auto dealer and lender groups are howling in protest at an editorial in Saturday's New York Times that equated subprime auto loans with subprime mortgages. The groups insist there is no comparison between the two types of loans. At the same time, a recently disclosed U.S. Department of Justice investigation into subprime auto loans is very much part of the debate.... Read More »

 

Q&A

Flat fees for F&I products? It's possible

12:01 am U.S. ET | Aug. 13, 2014
It's a matter of "when" rather than "if" U.S. regulators will force auto lenders to switch to flat fees from dealer reserve, says John Pappanastos, CEO of EFG Companies, a major F&I administrator. Flat fees for F&I products could follow, he says. And if that happens, he says dealerships likely will reap lower revenues per vehicle and try to make up for it by selling F&I products to a greater share of customers.... Read More »

 

Subprime lender learns FTC's 'not cutting any slack'

12:01 am U.S. ET | Aug. 11, 2014
Subprime auto lender Consumer Portfolio Services learned some costly but valuable lessons from a $5.5 million consent order with the Federal Trade Commission this year.... Read More »

 

High-tech toys drive service contract sales

12:01 am U.S. ET | Aug. 11, 2014
In-vehicle, high-tech toys and consumers' urge to protect them are driving sales of extended service contracts, some finance and insurance professionals say.... Read More »

 

After probe of Santander, GM Financial, who's next among subprime auto lenders?

2:54 pm U.S. ET | Aug. 8, 2014
Other subprime auto lenders that issue asset-backed securities are wondering whether they're next after Santander Consumer USA followed GM Financial as the subject of a subpoena from the U.S. Department of Justice.... Read More »

 

JAMES B. TREECE

GM Financial subpoena shifts investigation away from dealers

12:01 am U.S. ET | Aug. 6, 2014
When dealers saw headlines saying the U.S. Department of Justice had subpoenaed GM Financial ast month to produce documents relating to its subprime auto loan contracts, they could be excused for worrying that this represented another threat to their arranging car loans for consumers.... Read More »

 

NEWS ANALYSIS

GM Financial subpoena opens new front in auto lending crackdown

12:01 am U.S. ET | Aug. 6, 2014
The U.S. Department of Justice opened a new front in a multifaceted crackdown on auto lending by federal regulators when it subpoenaed GM Financial last month to produce documents relating to its subprime auto loan contracts.... Read More »

 

Chrysler Capital seeks to regain retail share lost in Q2

12:01 am U.S. ET | Aug. 6, 2014
Chrysler Capital, the preferred lender for Chrysler Group, cut back on some near-prime and subprime originations to Chrysler Group customers in April and May because competition had driven margins unattractively low, Santander Consumer USA, the lender behind Chrysler Capital, said last week during a conference call for investors.... Read More »

 

Ally's insurance operations reap fewer revenues in Q2

12:01 am U.S. ET | Aug. 6, 2014
Ally Financial's revenue from the sale of extended service contracts dropped slightly in the second quarter, partly as a result of increasing lease volume. Ally's insurance operations took in $266 million in revenues in the second quarter, down from $271 million, or about 2 percent, from the year-earlier period.... Read More »

 

Penske taking steps to improve F&I revenue

12:01 am U.S. ET | Aug. 6, 2014
Penske Automotive lags its publicly traded dealership-group peers in finance and insurance revenue per vehicle retailed, largely because Penske dealerships lease vehicles at rates above the industry average. But Chairman Roger Penske isn't content with the current F&I results. He wants to raise the numbers. And he's already seeing results.... Read More »

 

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At Courtesy Auto Group in Illinois, Ray and Rik Fregia are seeing sales boom after million-dollar overhauls at their three stores. Mon., September 15
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