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

Line graphic showing week-over-week wholesale auto price changes
Industryby StaffApril 22, 2026

Black Book: Weekly Market Update

Wholesale auto conversion rates dropped slightly as auction buyers proved picky last week, analysts observed.

Read More →
pavement with car and charger wrapped around it painted on
Industryby Lauren LawrenceApril 16, 2026

EV Battery Cycle Life at Risk

Fast charging of electric vehicles provides a solution for range anxiety, but it also poses a risk to battery cycle life due to increased temperatures, according to an EV supply chain data provider.

Read More →
Photo of exterior facade of Beardmore Chevrolet store
Industryby Hannah MitchellApril 14, 2026

Founding Family Sells Nebraska Dealerships

Expanding Midwest automotive group picks up three stores as part of the robust transaction activity early this year.

Read More →
Ad Loading...
Up-close photo of car battery
Industryby Hannah MitchellApril 13, 2026

Automaker Increases Parts Recycling

Stellantis is adding a third end-of-life vehicle dismantling facility to feed its growing reuse business sparked in large part by autos’ growing lifespans.

Read More →
Photo of white 2026 Ford Bronco on a sandy beach
Industryby Hannah MitchellApril 10, 2026

March New-Vehicle Sales Don’t Reflect War

Cox Automotive data shows Americans doubled down on big-is-better despite price increases. Slightly higher incentives helped fuel the demand.

Read More →
Photo from the rear of the XC60 SUV
IndustryApril 8, 2026

Volvo to Shift Some EV Production to U.S.

The automaker says its movement of some electric-vehicle work to the S.C. factory is part of a more tailored product focus. It also plans to add a new hybrid model to the plant’s itinerary.

Read More →
Ad Loading...
Bar graphic depicting week-over-week change across the various vehicle segments
Industryby StaffApril 7, 2026

Black Book: Weekly Market Update

Last week's wholesale automotive auction activity continued in a healthy mode, though buyers practiced selectivity.

Read More →
red car at a gas station being filled with gas. Efficiency Drives Demand. Providers and Administrators logo
Industryby Lauren LawrenceApril 7, 2026

Gas Prices Driving Consumer Interest

CarGurus’ first quarterly review of 2026 shows that affordability concerns are continuing to drive consumer purchases with a shift to more fuel-efficient options.

Read More →
Blurred photo of red car moving down a road
Industryby Hannah MitchellMarch 31, 2026

Automakers Have More Tricks Up Their Sleeves

JD Power analysts see auto retail faring this year’s storms well through various means, though it acknowledges conditions are challenging to accurately predict.

Read More →
Ad Loading...
background view of Washington D.C. with the capitol building and cherry trees. Text says 'What's the Cost?' with two diverging arrows and the Providers and Administrator's logo
Industryby Lauren LawrenceMarch 31, 2026

Insurance Rates Continue to Fall

Car insurance premiums have continued to decline so far this year, the overall national average settling at $138 per month in March, according to Insurify data.

Read More →