DETROIT —In a Securities and Exchange Commission filing Monday, General Motors Financial Company revealed that it was served with a subpoena by the U.S. Department of Justice (DOJ) late last month. According to the filing, GM Financial was directed to produce documents related to the origination and securitization of subprime auto loan contracts dating back to 2007.

The subpoena, which was served on July 28, calls for the company to turn over information from its affiliates, subsidiaries and core business “in connection with an investigation by the U.S. Department of Justice in contemplation of a civil proceeding for potential violations of Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA),” according to the filing. 

“Among other matters,” the filing stated, “the subpoena requests information relating to the 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.”

The DOJ has used the FIRREA to go after finance sources such as Citigroup in the mortgage area. Last month, Citigroup was ordered by the DOJ to pay the largest civil penalty under FIRREA in history — $4 billion — for its conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities prior to Jan. 1, 2009. 

“Our understanding is that the request is focused on the subprime auto finance space in general,” GM Financial said in an email statement issued to F&I and Showroom. “There are no allegations set forth in the subpoena and GMF is cooperating with the request.”

About the author
0 Comments