WASHINGTON — The American Financial Services Association (AFSA) is continuing to push the U.S. government to include auto loan-backed assets in its plans for the $700 billion in federal funds made available by the Emergency Economic Stabilization Act.
Bill Himpler, AFSA's executive vice president, told Reuters.com that the association would "cast as wide a net as possible" to ensure that companies with defaults on their books would get a chance to improve their portfolios by extending credit to new customers. He noted that auto loans tend to perform well over the long term, despite a recent trend of rising delinquencies and defaults.
"The onus is now on us to make the case for our companies to be able to sell non-mortgage related assets to the government," Himpler said. "We're in the process of putting together our case ... that auto paper is key to financial market stability."
"Most vehicle finance companies have not changed their criteria for granting credit," said Chris Stinebert, the trade group's president. "Customers are simply more reticent to buy because they — and many large institutions — lack confidence in the market right now."
AFSA represents a wide spectrum of more than 150 mortgage companies and captive and non-captive auto financing firms, including subprime lenders such as AmeriCredit Corp. and Sixth Gear Solutions.
