With an influx of stimulus cash and large government protection programs, an adverse risk environment was effectively deferred. There is reason for optimism, but it is possible we have not seen “the full impact in terms of defaults and credit losses.”
The auto lending industry is still rationalizing the current environment. Auto lenders should prepare for any material increase in delinquency, repossessions, and charge-offs. This readiness will occur against a backdrop of increasing regulatory scrutiny and active enforcement, as signaled by the Biden administration.
We examine how auto lenders should examine the operational, compliance, and technological underpinnings of operations to maximize performance, profitability, and controls.