As Auto Lending Rises, So Do Delinquencies – New York Times
Regulators are airing “significant concern” about the millions of Americans who are falling behind on their car loans, even as auto lending continues to boom at a near record pace.
On Wednesday, the Federal Reserve Bank of New York noted increasing distress among auto borrowers with shaky credit, as subprime delinquencies rose in the third quarter.
In the third quarter, 2 percent of subprime auto loan balances became at least 90 days delinquent, up from 1.6 percent in the third quarter of 2014.
In the depths of the recession, in the second quarter of 2009, that rate peaked at 2.4 percent.
“The increased level of distress associated with subprime loan delinquencies is of significant concern,” researchers for the New York Fed wrote in a blog post on Wednesday.
The report is the most strident warning yet from the New York Fed about stresses in subprime auto lending. The New York Fed analyzes trends in borrowing by American households each quarter.