The auto loan sector has lately become a darling of the ABS market, with issuance motoring at an ever-faster clip.

But at least one speaker at Information Management Network's ABS East detected a potential bubble forming in the subprime segment. “The number of lenders jumping into that space looks like something we’ve seen before,” said Kevin Duignan, global head of structured finance at Fitch Ratings, making a reference to the subprime mortgage market. He acknowledged that the U.S. consumer was in much better shape than before the crisis but noted that underwriting standards for auto loans to more credit-challenged borrowers could deteriorate.

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