New York State regulators may bring an enforcement action against the German bank as early as this month; Wells Fargo’s decision to stop making loans to the dealers has more to do with credit quality than asset limits.
The consumer bureau said Approved Cash Advance improperly collected amounts that were five times higher the legitimate fee schedule disclosed to borrowers.
A Democratic measure to freeze foreclosures and auto repossessions through the coronavirus crisis while expanding eligibility for loan forbearance is getting strong pushback from banks and credit unions, which complain it would constrain credit.
One of the biggest subprime auto lenders agreed to pay $550 million to settle predatory lending charges; the bank regulator has largely completed his goal of overhauling the Community Reinvestment Act.
The lender will pay $65 million in restitution and forgive nearly $500 million in auto debt to settle charges that it steered subprime borrowers into risky loans.
A surge in demand for home loans drove the increase, but the second quarter could see a slowdown in borrowing and more delinquencies as consumers contend with the economic fallout of the coronavirus pandemic.
Lenders are throwing money at buyers with stable jobs while making it harder for weak borrowers to get loans; $50 billion in loss provisions may not be enough and could stifle lending.
Credit inquiries for auto lending, revolving credit cards and mortgages fell sharply in March as unemployment surged, according to a Consumer Financial Protection Bureau report.
Credit Acceptance Corp., the lender to car buyers with subprime credit scores, warned it's seeing a sharp drop-off in payments as people shift their financial priorities to get through the coronavirus pandemic.
After more than tripling its loan-loss provision, the $182 billion-asset company became the first large U.S. bank to report a quarterly loss as a result of the coronavirus pandemic.
