The subprime auto lender funded loans through a group of car dealers that it knew had track records of high default rates and fraud, authorities in Massachusetts and Delaware said.
Wells Fargo engaged in an "extensive and pervasive pattern" of discriminatory and illegal lending practices for years, the OCC said in slashing a key rating of how the bank serves communities.
By bending over backwards when borrowers trade in an older car for a new one, lenders are said to have embarked down an unsustainable path. The warning, by Moody’s, adds to concerns about credit quality in auto lending.
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In a further illustration of weakness in the auto sector, Ally Financial said Tuesday that its 2017 profits will likely be dinged by rising delinquencies on subprime auto loans, as well as by falling used-car prices.
Bankers and housing advocates say many low-income housing projects simply won't get built if the White House and Congress move to eliminate two federal block grant programs.
