GM’s Subprime Lending Draws Justice Department Scrutiny
General Motors Co. must turn over documents related to its subprime auto-lending under a subpoena issued by the U.S. Justice Department, the Detroit auto maker disclosed in a regulatory filing Monday, reported The Wall Street Journal. GM’s car-financing unit said it received the subpoena July 28 in connection with a federal investigation of subprime auto ... Read More »
General Motors Co. must turn over documents related to its subprime auto-lending under a subpoena issued by the U.S. Justice Department, the Detroit auto maker disclosed in a regulatory filing Monday, reported The Wall Street Journal.
GM’s car-financing unit said it received the subpoena July 28 in connection with a federal investigation of subprime auto loans dating to 2007. The statement said the request was “in contemplation of a civil proceeding for potential violations of Financial Institutions Reform, Recovery, and Enforcement Act of 1989.”
In a statement Monday, GM Financial said “our understanding is that the request is focused on the subprime auto finance space in general. There are no allegations set forth in the subpoena and GMF is cooperating with the request.”
The subpoena is one more sign that federal regulators are turning up pressure on the auto finance industry. The Justice Department and the Consumer Financial Protection Bureau have been investigating whether lenders are discriminating against women and minorities. Ally Financial Inc., the former consumer credit unit of GM, agreed in December to pay $98 million to settle a probe of its lending practices by the Justice Department and the CFPB. Ally didn’t admit wrongdoing under the agreement.
The Justice Department is looking at “underwriting criteria used to originate these automobile loan contracts and the representations and warranties relating to those underwriting criteria that were made in connection with the securitization of the automobile loan contracts,” GM Financial said in a filing with the Securities and Exchange Commission.
GM’s filing was reported earlier by Bloomberg News.
The disclosure by GM Financial indicates regulators’ concerns are expanding to questions about the quality of subprime auto loans.
In June, the Office of the Comptroller of the Currency noted that the average amount of an auto loan was greater than the value of the car during the fourth quarter of 2013, as lenders bundled the costs of extended warranties, credit life insurance and dealer-installed accessories into contracts.
“The results have yet to show large-scale deterioration at the portfolio level, but signs of increasing risk are evident,” the regulator said in a report.
DriveTime Automotive Group Inc., which operates a chain of “buy-here, pay-here” auto dealerships, disclosed in a March regulatory filing that the Consumer Financial Protection Bureau had notified the company in January that the agency was
More Industry

Used EVs Defy Overall Market
While the used-car market saw three months of price declines or stagnation, the used EV segment did the opposite – rising for three straight months.
Read More →
Gone to the Dogs
A Stellantis brand decided to have some fun with one of its SUVs’ design to address growing emphasis on family pets.
Read More →
OEM Poll Sees Industry Evolution
Kerrigan Advisors’ survey of automakers finds that tariffs, technology, network tightening and other factors are poised to reshape auto retail.
Read More →
Luxe N.C. Dealerships Change Hands
A collection of Italian and English brand franchises were handed off to the owner’s friend in the business and include the Carolinas’ only Ferrari retail stores.
Read More →
Exposure Drives Interest in Chinese Cars
At a recent demonstration, consumers had the chance to ride in a Chinese-branded vehicle, a firsthand experience that improved their perceptions and purchase intent.
Read More →
Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →
Agent Advocate
Rob Mancuso, who comes from a long line of auto dealers, values general agents’ place in the industry and makes a case for them taking an even bigger seat at the table.
Read More →
Driving Under Distraction
Though consumers gave higher marks to new vehicles in JD Power’s most recent initial-quality poll, high-tech interference worsened, pointing to craving for simplicity.
Read More →
Affordable New Cars a Thing of the Past
More than one out of five new vehicles sell for more than $60,000, according to Edmunds. That's up 7% compared to prepandemic 2019.
Read More →
State Follows Federal Warning on Auto Ads
The Massachusetts attorney general cautioned the state’s automotive dealers to be upfront with the consuming public about their vehicle prices or risk punishment.
Read More →