Accounting firm Arthur Anderson has been chosen by Compass Bank to look into residual auto loan securitization. The Birmingham, Ala.based bank has been mulling a securitization of residuals from its auto loan portfolio as a way to avoid buying residual value insurance, which has been described by some in the industry as expensive and shoddy.

Thus far, the only alternative to purchasing the residual coverage has been for the company to eat the losses on the collateral. Residual securitization is being looked at as an out from these costs.

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