The Justice Department is investigating General Motors’ finance subsidiary over auto loans that it has made and securitized since 2007.
On July 28, GM Financial was served with a subpoena directing it to produce certain documents relating to the underwriting criteria used to originate automobile loan contracts and the representations and warranties relating to those underwriting criteria that were made in connection with the securitization of the automobile loan contracts, according to a filing with the Securities and Exchange Commission.
The filing said that the subpoena was part of a civil proceeding for potential violations of Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
FIRREA gives the government broad authority to bring civil claims and has less stringent requirements to establish liability than commercial fraud statutes. Justice has used it to hold banks accountable for questionable mortgages that were securitized in the runup to the financial crisis.