Bank of America will continue to expand into the auto loan sector despite the fact that regulators show the industry could decline. The company is also moving ahead at a time when their competitors are approaching auto loans much more cautiously owing to the fact that many have experienced losses. Bank of America began exploring this area in May 2015, adding auto loans to their offerings alongside home equity loans and checking accounts.
Interviews with D. Steve Boland and mortgage executives, John Schleck and Matt Vernon, the two in charge of the bank’s auto loan division, state that they believe Bank of America can expand into this area by offering auto loans to customers who have good credit. To that end, the company has made a number of hires in anticipation of an increase in their customer base.
But despite Boland, Schleck and Vernon believing Bank of America is on the right track, other lenders and industry experts are not certain the company has made the right move. Many believe that auto sales are about to reach their peak, while others point to the apparent weakness in consumer credit as a reason to step back from auto loans. The Federal Deposit Insurance Corp has reported that in the fourth quarter of 2015, $1.1 billion dollars in auto loans was classified as uncollectible by banks. That is an increase of 15 percent from the last quarter of 2014. With those numbers, many wonder whether Bank of America’s decision will only result in losses for the company.
If you are interested in a personal loan, visit our curated list of top lenders.