JPMorgan Chase & Co. grew its outstandings auto balances, despite originations remaining flat, the bank reported in its second-quarter earnings call today. 

Chase Auto Finance’s 2Q loan and lease outstandings reached $83.8 billion — a year-over-year increase of $3.6 billion. Despite a rise in lease originations, total originations remained flat year-over-year at $8.3 billion.

In terms of global economic growth, particularly in the U.S., Chief Executive Jamie Dimon said the bank delivered record results this quarter. He attributes the growth to high consumer and business sentiment, as well as stronger competition in all fields, including its auto portfolio.

“Competition is a good thing,” Dimon said. “It’s called capitalism.”

Delinquencies 30 days or more past due dipped to 0.77% of the portfolio in the quarter compared with 0.88% in 2Q17. Charge-offs, on the other hand, rose by $2 million YOY to $50 million in the quarter. As a percentage of the bank’s portfolio, charge-offs increased to 0.31% compared with 0.29% the year prior. 

Dimon and Chief Financial Officer Marianna Lake said they are not experiencing signs of fragility in the economy. Both called the banking system healthy as consumer confidence is high. “If you’re looking for potholes out there, there’s not a lot of things out there,” Dimon said.

President Trump’s trade tariffs could put a damper on consumer sentiment, but Lake noted the bank is not experiencing any signs of that happening.

“Trade at this point is in people’s minds, but it’s not causing any change in the decisions that they’re making,” Lake said

Click here to view JPMorgan Chase’s full 2Q18 results.

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Wells Fargo Auto continues to downsize its portfolio and, as a result, is seeing fewer delinquencies and losses, the company reported during its second-quarter earnings call today.

The banks automotive net-charge offs are 10.3% lower compared with the same period the year before while delinquencies are slightly down by 2.3% over the same period.

However, the overall decline in loans past due masks an uptick in late-term delinquencies. Loans 90 days or more past due increased 15.3% to $105 million.

Still, the delinquency rate is just a drop in the bucket for Wells Fargo’s $47.6 billion portfolio, which is down 18% year over year. The bank originated $4.4 billion auto loans during the quarter — down 3.3% year over year.  

The more significant loss on the quarter was the banks $1 billion consent order with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. The bank was fined in part for allegations that it force-charged consumers for insurance they didn’t need and were already paying for from a third party.     

As part of the order, Wells Fargo was assigned to submit a plan to the CFPB in June regarding how it would pay back consumers it had harmed. Wells Fargo declined to comment on the plan.

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Consumer Portfolio Services this month issued its third securitization of the year backed by $168.8 million in auto loan receivables, and this latest issuance features “significant changes” from the company’s earlier notes, according to a pre-sale report from S&P Global Ratings.

One of the most significant changes includes the addition of more of CPS’ high-credit tier loans to the pool.

CPS’ top four credit tiers comprised 79.4% of the collateral up from 73.6% in the 2018-B issuance, according to S&P. The percentage of loans originated under CPS’ three lower credit tiers decreased to 20.6% compared with 26.4% in the prior issuance.

“It’s true that we have gradually made a shift to the upper tier of our product mix,” Jeffrey Fritz, executive vice president and chief financial officer of CPS, told Auto Finance News. “Part of that is we’ve given some pricing advantages to the dealer for lower LTV loans, and for newer vehicles and that has tended to shift the mix in our credit spectrum toward the upper tier.”

This issuance is also notable because 11.4% of the loans are made up of called collateral, which are loans that were offered in prior securitizations but have since been repurchased by the company. In this case, the loans are from three 2013 issuances. When those 2013 bonds amortized to 10% of the original pool, CPS re-acquired the remaining collateral as it usually does and is now securitizing those performing loans again.

“The called collateral is very seasoned because it’s probably four to five years old — most of the losses have already occurred,” Fritz said. “Because the called collateral is seasoned, the remaining life of those balances is materially less, and it tends to bring down the expected life of the whole portfolio, shifts the yield curve down, and can have a positive effect on the credit spread execution of the deal.”

The securitization is expected to close on July 17 and is the lenders largest pool of securitized loans since at least 2016, as the company has continually increased the size of the issuances, according to the report.

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2018 Ram Power Wagon

If Fiat Chrysler Automobiles is successful in its endeavors to form an internal captive arm, it would be a boon to the OEMs car sales, Dan Fields, president of Fields Automotive Group, told Auto Finance News.

In late May, FCA announced its intentions to form a captive arm and possibly buy the Chrysler Capital portfolio from Santander Consumer USA to jump-start those efforts, AFN previously reported. Fields said that OEMs at his dealerships “have had an inherent advantage” because of their captive finance arms.

“Even the ones that have very good partnerships with quasi-captives — which are really banks with a name in front of it — are just not the same as a true captive that will make a sacrifice for the greater good of the company,” he said. “With the bank, there’s more of a rational decisioning, and sometimes in the automotive business the emotional decisions are the right ones.”  

However, it’s not so clear the move will be net positive for Stone Mountain, Georgia-based Gwinnett Chrysler Dodge Jeep Ram. Finance Manager Michael Haywood hopes this new captive will buy in the same credit buckets that Santander does now, but they are primarily in the dark right now.   

“We have no idea because we have such limited information about what kind of bank program they will be because Santander buys all over the credit spectrum,” Haywood said. “I would assume they would buy similar to what Santander does now, but there’s no way to tell — it could affect us greatly or it might not affect us at all.”

Haywood is currently happy with Santander’s program, he added, noting that roughly 60% of the dealership’s originations go to the financial institution, which can accommodate credit scores from 500 – 850.

While FCA figures out its next moves, dealerships are more immediately concerned about the rising rate environment and are turning to credit unions that can offer the lowest rates, both dealers noted.

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Credit unions have been growing in the auto finance industry, and one of the reasons that dealerships have been partnering with them is a shared mission to retain customers, dealers told Auto Finance News. 

“We want to create lifetime customers, that’s one of our mantras,” Danny Cox, senior director of F&I at Ken Garff Auto Group, told AFN. “We know on the credit union side that it’s about serving their membership base. So there’s a match there, and when you talk to credit unions, they understand the indirect lending model, and they understand what it is that we are trying to do in regards to our customer retention and what they are trying to do.”

The Utah-based Ken Garff Auto Group has over 50 dealerships nationwide, and credit unions make up about 18-20% of the business. Through the partnership, the credits unions can advertise the dealership to their member base, while the dealer can open up their inventory for credit union customers.

Autofair Auto Group shares a similar relationship with its credit union lenders, which make up their biggest lender partners after captives.

“As we strengthened our relationships, the one thing that I found very much in common is that credit unions try to focus on maximizing the experience for their members with long-term retention in mind,” President and Chief Executive Andy Crews told AFN. “As a dealer, that’s exactly what I’m trying to do with my customers. I want to retain those customers long term and provide them the best quality service that I can and keep them for future sales and opportunities.

The focus on customer retention is one way that credit unions can differ from other lenders, who can be centered on how the portfolio is doing.

“The partnership has developed to where we can talk about what we can do to utilize what we both want for that long-term member and customer,” Cox said. “Sometimes you don’t get that so much on the traditional lender side. You talk more about portfolio performance than you do really the customer retention.”  

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Leandra English, deputy director of Consumer Financial Protection Bureau (AP Photo/J. Scott Applewhite, File)

CFPB Deputy Director Leandra English is leaving the agency with plans to file court papers on Monday that will bring an end to her legal battle challenging Mick Mulvaney’s appointment as acting director, according to statements released by her attorney.

English directly attributed her resignation to President Trump’s June nomination of Kathy Kraninger as permanent acting director of the agency. Kraninger, a deputy under Mulvaney at the Office of Management and Budget, will be questioned by the Senate Banking Committee on July 19.

“I will be stepping down from my position at the Consumer Financial Protection Bureau early next week, having made this decision in light of the recent nomination of a new director,” English said in a July 6 statement through her attorney.

Also, English will be calling it quits on her legal fight against President Trump over Mulvaney’s appointment in the wake of the Kraninger’s nomination. Now that President Trump has decided to seek Senate confirmation of a new director for the independent bureau, English’s attorney, Deepak Gupta of Gupta Wessler PLLC, said his client intends to “bring the litigation to a close,” Gupta said in a statement.

English has argued since Nov. 26, 2017, that she was the rightful successor of the CFPB after former Director Richard Cordray’s resignation — suing President Trump for allegedly relying on the Federal Vacancies Reform Act to appoint Mulvaney. English reasoned that the 2010 Dodd-Frank Act, which created the bureau, established a “clear line of succession that calls for the CFPB’s deputy director to serve as the acting director when there is a vacancy atop the bureau,” according to the complaint.

Despite her efforts, English’s appeals failed. U.S. District Judge Timothy Kelly, the judge overseeing her case in federal court, twice denied her request to be installed as acting director of the CFPB.

Meanwhile, at least one industry trade group has reiterated its overall concern for the CFPB’s structure under a single director. “The transition of power at the bureau was a circus, and we could witness it again in five years unless a bipartisan commission is created to give consumers the certainty and stability they deserve,” said Richard Hunt, president and CEO of the Consumer Bankers Association, in a statement.

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2018 Hyundai Sonata

Hyundai Capital America is partnering with MetLife Auto & Home to offer customers in the lender’s new vehicle subscription program insurance and maintenance bundled into one monthly bill, and the insurer predicts the program is cheaper than if consumers bought their auto insurance separately.

The Hyundai Plus program starts at $279 for a three-year lease that bundles insurance and maintenance into the bill.

“We worked closely with Hyundai to look at their existing lease holder profile and we were able to develop a customized pricing program that allows them to lock in a fixed rate for three years,” Kevin Chean, vice president and head of MetLife Group Auto & Home, told Auto Finance News. “It’s a competitive price because when you look at insurance costs and the cost of vehicle ownership, purchasing this coverage separately would actually cost a lot more.”

There are a couple reasons insurance may be cheaper in Hyundai Plus as opposed to a customized plan. One, Hyundai is footing the marketing bill.

“There is a lot of marketing and advertising in the insurance industry — it’s one of the most marketed industries across the board,” Chean said. “This program is offered through Hyundai so we’re not offering marketing to promote this program, Hyundai is leveraging their existing marketing program to sell cars and get consumers in the door. That marketing saving gets passed to a consumer.”

Two, because it’s a fixed rate, and customers are approved through an app at the dealership, MetLife Auto & Home doesn’t have to go through the typical underwriting process for each consumer, saving the company in time, labor, and paperwork.

That fixed rate was based on existing data Hyundai had on the makeup of its lease customers and the profile of the customer is not risky to begin with.

“In order for someone to qualify for the Hyundai Plus program they have to qualify for a lease, and in order to get a lease they have to have a good credit score,” Chean said. “A credit score is highly correlated with good driving behavior. Still, we ask some basic questions such as, ‘Has the consumer had a DUI in the past three years.’”  

The fixed rate also provides the consumer with more stability, Mark Abbasi, Hyundai Capital’s vice president of product development, told AFN.

“I have car insurance and my rates just went up last year, so under this plan, the consumer doesn’t have to worry about any increasing premiums,” he said. “It gives you stability to know what the payment streams will be.”

A similar program called Care By Volvo — which offers a lease agreement with insurance and maintenance included starting at $650 per month — was found to cost less than a typical three-year lease, according to Edmunds’ 2018 Automotive Industry Trends Midyear Update. The savings amounted to $1,589 over a three year period, according to the report. Liberty Mutual is the insurer for Volvo’s program.

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一批电动汽车制造商已经纷纷进入中国市场，但是市场内的金融融资选择却并不多。来自J.D. Power中国的营销及沟通主管Roger Zhang告诉《汽车金融新闻》。

据LMC Automotive报道，去年在中国推出了186款电动汽车车型，而且J.D. Power预计，到2025将另有1000款电动车型亮相。Roger Zhang表示，这些车型中有许多都是由该领域中新的原始设备制造商推出的，例如NIO和WEY，他们尚未拥有专属的财务分支。银行和金融科技公司可以提供融资服务，但存在风险，因为车辆价值和原始设备制造商是否会取得成功是不确定的。

尽管如此，中国对电动汽车购买的补贴非常高。在补贴之后，中国电动车的平均价格为25,000美元，比美国一些最低价车型（比如特斯拉Model 3或Chevy Bolt）的价格低约5,000美元，Roger Zhang说。

他补充道，在中国，汽车牌照是对电动汽车的另一种人为激励。上海的汽车牌照价格现在已经“飙升”到13,000美元。汽车牌照的高成本意在防止过多汽车上路导致交通堵塞，不同的城市会采用不同的方法。在北京已经出现了汽车牌照黑市，因为通过车牌摇号系统可能需要数月或数年的时间才能拿到牌照。

广州和深圳等南方其他城市，则使用摇号与拍卖相结合的系统方式。如果消费者购买电动汽车，所有这些牌照费用和等待时间都可以免除。

Roger Zhang说：“这样看来，[汽车牌照]对于电动汽车来说也是一种激励方式。在中国，消费者称想要电动汽车第二大理由就是他们想要拿到一个车牌。”

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Kathy Kraninger, President Donald Trump’s pick to succeed Acting Director Mick Mulvaney as permanent director of the Consumer Financial Protection Bureau, will be questioned by the Senate Banking Committee on July 19.

Kranginger currently serves under Mulvaney in his other capacity as director of the Office of Management and Budget. Some of the most common criticisms during the hearing are likely to be her lack of financial services experience and scrutiny over the payday and title lending rule, which is currently under review.

“You begin with the assumption that her approach would be Mulvaney-like and that she’s going to take stances Mulvaney and the president want,” Justin Hosie, partner at Hudson Cook LLP, told Auto Finance News. Mulvaney has been criticized for his ties to the payday loan industry, but Kraninger may differ from him in ways that haven’t been exposed. “It’ll be interesting to see her testimony to find out how she thinks and might be different from Mulvaney,” Hosie added.

Mulvaney has long opposed the payday lending rule that was created by his predecessor Richard Cordray and has sought to eliminate an August 2019 compliance deadline set by the original rule. However, a Texas district judge denied the request on June 12.

“The rule, as written, really clobbers the [payday] industry,” Hosie said. Although the rule sounds reasonable, he said, it disregards the need for lenders to provide emergency loans. “To tell a consumer who has an emergency need, ‘You have to be able to pay your other bills or you don’t qualify,’ is pretty self-defeating,” he added.

Proponents of the rule argue that consumers need protections from payday lending, which can place consumers in a debt trap from which they are unable to escape.

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总部位于上海的汽车金融科技服务平台灿谷有限公司（Cango Inc.）作为一家汽车贷款服务商，其公司规模不断发展增长，并于上周向证券交易管理委员会提交了申请，筹集3亿美元在纽约证券交易所进行首次公开募股。

Cango创建于2010年，其公告内容表示，Cango通过将客户与金融机构和经销商联系起来，在购车过程中为消费者提供帮助。截至3月份，Cango已与11家第三方金融机构展开合作，其中包括晋城银行，江南农村商业银行和上海汽车之家，后者提供租赁服务，并将在收购完成后成为Cango的全资子公司。

“根据Oliver Wyman报告显示，我们的业务覆盖了中国数量最多的新车经销商，截至2017年12月31日，我们推动的融资交易额是中国汽车交易服务平台中最大的”该公司指出。

在截至3月31日的三个月中，Cango为其银行合作伙伴发起了9亿美元的汽车贷款项目——与去年同期相比增长了7.2％。

随着公司融资交易的增加，其对晋城银行的依赖也逐渐减少。在第一季度，晋城银行在Cango的融资总额为33％，比去年同期的95.6％有所下降。

根据公司报告显示，该网上金融服务供应商还与37,667家注册经销商和29家其他行业参与者合作（包括原始设备制造商、在线广告平台和保险经纪人）。自成立以来，Cango已经为734,336名购车者提供了服务。

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Turn Your Bulk Auto Notes Into Cash