GO
Loading...

General Motors Financial receives subpoena from DoJ over subprime loans

General Motors' auto financing unit received a subpoena from the U.S. Department of Justice requesting information about the company's use of subprime automobile loan contracts, GM Financial said in a regulatory filling on Monday.

GM Financial was ordered to produce documents dating back to 2007 relating to the underwriting criteria used to originate the auto loan contracts as the DoJ considers civil proceedings for a potential violation of Financial Institutions Reform, Recovery, and Enforcement Act of 1989, the filing said.

GM Financial home page
Source: GM Financial
GM Financial home page

GM Financial said it was served the subpoena on July 28.

The subpoena also asked for information on the representations GM made about the criteria when the loans were pooled into securities.

Financial services firms have paid billions of dollars to resolve investigations under FIRREA into questionable mortgages pooled into securities in the run-up to the financial crisis. The new subpoena could be one of the first public acknowledgements that investigators are also looking at the securitization of subprime auto loans.

FIRREA, the Financial Institutions Reform, Recovery and Enforcement Act, allows the Justice Department to sue over fraud affecting a federally insured financial institution.

Separately, regulators have brought some recent cases against auto lenders over allegations of discrimination.

In December, GM's former financing arm, Ally Financial, agreed to pay $98 million to resolve claims by the Justice Department and the U.S. consumer bureau that it charged minority borrowers higher interest rates than white borrowers.

—By Reuters. CNBC contributed to this report.

Contact Autos

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More