N.Y. Department of Financial Services subpoenas 2 banks over subprime auto lending
NEW YORK (Reuters) — New York state’s financial services regulator has subpoenaed financing divisions of automakers including Ford, Honda, Nissan and Volkswagen, along with banks Santander and TD Bank, as part of a probe of possible consumer abuses in subprime auto lending, a person familiar with the matter said on Thursday.
The investigation by the New York Department of Financial Services probe includes potentially discriminatory practices, the person said.
U.S. regulators are asking banks for more detail on their autos financing exposure, as rapid growth in the lending has prompted officials to seek to better assess the risks.
The companies could not be immediately be reached for comment.
Banking regulators fear that reckless lending may be at least helping to fuel that growth, and there are early signs that delinquencies are increasing in the sector.
Companies like GM Financial and Santander Consumer USA Holdings had also disclosed earlier this year that the Department of Justice is looking into their auto finance practices.
In October, No. 2 U.S. auto lender Ally Financial Inc. had said that the U.S. Securities and Exchange Commission is investigating its subprime auto lending and securitization practices.
The Consumer Financial Protection Bureau had said in September that it is taking steps to oversee auto lenders that have previously been less regulated.
The probe was first reported Thursday by the New York Post.