NEW YORK (Reuters) – US regulators are asking banks for more detail on their autos financing exposure, as rapid growth in the lending has prompted officials to seek to better assess the risks, according to a person familiar with the matter.
Balances remaining on auto loans have risen by about a third since April 2011, reaching an all-time high of $924.2 billion in August, according to credit reporting bureau Equifax. About a fifth of the loans are subprime.
Banking regulators fear that reckless lending may be at least helping to fuel that growth, and there are early signs that delinquencies are increasing in the sector.
The Consumer Financial Protection Bureau said in September that it is taking steps to oversee auto lenders that have previously been less regulated, and companies like GM Financial and Santander Consumer USA Holdings Inc disclosed earlier this year that the Department of Justice is looking into their auto finance practices.
The person familiar with the matter said regulators are asking banks for information about not just loans they made, but financing they have provided to other lenders in the sector, such as credit lines to finance companies.