Providers and Administrators in blue logo
MenuMENU
SearchSEARCH

GM's Subprime Lending Draws Justice Department Scrutiny

August 6, 2014
2 min to read


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."

Ad Loading...


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.

Ad Loading...


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

F&Iby Lauren LawrenceFebruary 25, 2026

Report Finds Year-End F&I Strength

Deal volume ebbed and flowed throughout 2025, but product performance remained steady, according to automotive technology and data intelligence solutions provider StoneEagle.

Read More →
Industryby Lauren LawrenceFebruary 24, 2026

China Leads Battery Production

Between 2020 and 2025, gigafactory capacity grew six-fold and is set to grow another 118% by 2030, according Benchmark data.

Read More →
Industryby Hannah MitchellFebruary 24, 2026

Overall Consumer Confidence Up

Americans’ view of present business conditions, the labor market and family finances, though, are still in the dumps, and if they plan to buy cars, many target used units.

Read More →
Ad Loading...
Auto Financeby Lauren LawrenceFebruary 23, 2026

Auto Loan Forecast Bucks Market Trend

Auto loan originations rose over 6% year-over-year in the third quarter of 2025, but TransUnion predicts a slight decline in auto loan growth this year, making it an outlier in the company's overall lending forecast.

Read More →
F&Iby Hannah MitchellFebruary 23, 2026

Some Auto Brands Cheaper to Insure

A new top 10 list ranks the least expensive for average full insurance coverage on a clean driving record and high driver credit scores.

Read More →
Industryby StaffFebruary 20, 2026

Learn to Manage the Mayhem at Agent Summit

Rob Mancuso – president of Mancuso Automotive – will present a Keynote at the 2026 event.

Read More →
Ad Loading...
Industryby Lauren LawrenceFebruary 19, 2026

Affordability Leads Top-Rated List

Edmunds’ editorial team tested 300-plus vehicles to help determine the Top Rated Awards for 2026, and one brand stood out with multiple rankings, including Best of the Best.

Read More →
Salesby Hannah MitchellFebruary 19, 2026

Auto Sales Still Sluggish

February forecast has new-vehicle deliveries still off from last year at this time amid high prices and vanished EV incentives. But J.D. Power sees business picking up from here as automakers target growth.

Read More →
Industryby Hannah MitchellFebruary 18, 2026

EVs Bring Most Satisfaction to Date

Study finds that adopters are true believers and that their satisfaction with the vehicles is growing, including for public charger experience, despite pullback of federal incentives.

Read More →
Ad Loading...
Industryby Lauren LawrenceFebruary 17, 2026

Auto Manufacturing Drives Economic Growth

The sector generates over $64 billion in annual economic impact in South Carolina, making it the largest and fastest-growing manufacturing subsector in the state.

Read More →