NY Fed: US auto loans soar to highest in 8 years
WASHINGTON (AP) — New U.S. auto loans jumped to the highest level in eight years this spring, fueled by a big increase in lending to risky borrowers.
Yet the Federal Reserve Bank of New York says in a new report that loans to borrowers with shoddy credit, also known as subprime lending, still make up a smaller proportion of total auto loans than before the Great Recession.
Federal banking regulators have raised concerns in recent months over the rapid increase in subprime auto lending. Such loans could lead to more defaults, harming banks and consumers. The Justice Department is also investigating General Motors' financing arm over its subprime lending practices.
Yet the report stops short of recommending specific steps and says only that the New York Fed will "continue to monitor" the issue.