The auto lending business is all revved up, thanks to Wall Street.
More auto loans and leases are being cranked out at banks like JPMorgan Chase and Wells Fargo at a time when consumers are piling on more debt — and lengthier loans — to cover new and used car purchases.
JPMorgan saw auto loan and lease origination volume jump by 9 percent year over year, to $8.5 billion, the bank reported in its second-quarter earnings. Overall, the bank said its auto loans and leases rose 17 percent year over year. Wells Fargo also showed an increase in auto originations, with a 2 percent rise year over year and an 8 percent increase from the first quarter of $8.3 billion, it announced in its earnings Friday.
The total dollar amount lent to car buyers eclipsed the $1 trillion mark earlier this year, and it remains to be seen whether anything can stall growth in auto loans at a time when borrowing costs consumers so little.
JPMorgan CFO Marianne Lake said Thursday on the bank's earnings call that it has "maintained our underwriting discipline with average FICO scores." Later on the call, when pressed for specifics by an analyst who asked if JPMorgan had applied consistent standards to its auto lending, Lake said only that it has focused on consumers with "very high" scores.