Via Ron Cogswell/ Flicker
Though Wells Fargo Auto’s portfolio declined in the third quarter, the bank posted higher origination volume and improved credit performance in its third-quarter earnings released today.
Originations increased 10% year over year to $4.8 billion, yet Wells Fargo’s auto portfolio declined 17% to $46.1 billion. The bank noted the downsized portfolio is “reflecting our focus on growing high-quality auto loans following transformational changes made to the business,” according to the earnings report.
Meanwhile, third-quarter delinquencies fell 2.7% year over year to 4.2%, while net chargeoffs plunged 35.6% to $130 million.
Wells Fargo’s auto portfolio is expected to continue its runoff following the bank’s latest scandal with the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau. In April, the bank was fined $1 billion for allegations that it force-charged consumers for auto insurance they didn’t need and were already acquiring from a third party.
However, last week the OCC said it was dissatisfied with Wells Fargo’s efforts to reimburse affected customers. “We are not comfortable where we are with them,” Joseph Otting, chief of the OCC, told senators at a hearing last week, according to Bloomberg. It is uncertain what the OCC will do in regards to Otting’s comments.
In addition to the fines imposed on Wells Fargo by the OCC and CFPB, the Federal Reserve banned the bank from growing until it fixes its internal issues.