The troubles of these borrowers, both regulators and credit analysts say, underscore the disturbing signs throughout the lending market.
Last week at the annual conference of the Global Association of Risk Professionals in New York, Darrin Benhart, a senior regulatory official at the Office of the Comptroller of the Currency, which regulates Wells Fargo, noted that lenders had extended repayment periods to 84 months — 40 percent longer than the typical period — and were making loans that were far greater than the value of the car.
"Let that sink in," he told the audience. "That means it is not uncommon today for a family with subprime credit to take a loan at 110 percent of a used car's value that they will be paying off for seven years."
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Such longer loan terms, the Wells Fargo executives said, helped inform the bank's decision to impose a cap on its subprime auto originations.
Longer loan terms, while decreasing a borrower's monthly payment, can prove dangerous for lenders. If a borrower falls behind, the remaining loan balance is usually so large that it eclipses the money the lender can recoup through repossessing the car and reselling it at auction.
That calls into question one of the hallmarks of subprime auto lending: the ability to repossess a car and minimize a lender's losses.
Another pressure on the market, analysts worry, is that the value of used cars will plunge amid increased supply. The lower the value of the car, the less money a lender can recoup in a repossession.
Signs of strain are already starting to materialize. Losses on investments backed by subprime auto loans in January reached their highest level since 2009, according to a report last week by Fitch Ratings. The percentage of loans that were delinquent by 60 days or more rose to 4.75 percent in January, up 24 percent from the same period in 2014.
In some ways, the decision by Wells Fargo to cap its subprime auto originations at 10 percent is sending a more chilling message, given the bank's reputation for strong risk management.
The bank's recently imposed cap is already rippling through the auto market. Wells Fargo, like its bank rivals, makes most of its loans through auto dealers. The dealers interact with the borrowers and send their loan applications to prospective lenders.
Increasingly, Wells Fargo has been rejecting loans that dealers expected would be approved, according to people briefed on the matter who were not authorized to speak publicly.
The Wells Fargo executives emphasized in the interviews that they remained committed to auto lending and had no plans to abandon subprime auto loans altogether.
Currently, Wells Fargo's subprime auto loans are around 10 percent of its total auto originations, the executives said. The bank decided to put the cap in place near the end of last quarter. Executives briefed the board on the move late last year.
Some credit analysts expect other lenders to follow the lead of Wells Fargo. At Capital One, Richard Fairbank, the chief executive, has noted that auto lending standards have loosened, in part because they were so tight in the aftermath of the financial crisis.
Capital One, which said in a February regulatory filing that it had received a subpoena from the Manhattan district attorney related to its subprime auto lending business, says it maintains strict underwriting standards.
Still, Mr. Fairbank told analysts in January that the bank had to remain "very, very vigilant."