Capital One

This could be the second year in a row that the market for U.S. bank preferred shares has shrunk, something that hasn't happened since the lenders were replacing obsolete capital after the global financial crisis.

Amid troubling news of tariffs and layoffs, dropping delinquencies offer a rare sign of consumer health.

Tax liens have so-called super priority in repayments, even placing ahead of a previously filed mortgage.

CEO Richard Fairbank told analysts executives have their "microscopes" out for any signs of trouble, but consumers remain "in a great place."

FCI Funding 2024-1 has an additional tax liens account that can purchase up to $23 million of qualified assets on or prior to the second anniversary of the deal's closing date, while the subsequent tax lien account will be funded to $5 million for use during the reinvestment period.

Yields on the notes are expected to range between 6.36% on the AA- and Aa2 notes--as rated by KBRA and Moody's Ratings, respectively–to 10.08% on the BB notes, as rated by KBRA.

The pool luxury vehicle loans, which represent 5.4% of the pool, an increase from 4.0% from the level seen in VEROS 2023-1. The luxury vehicles had an average balance of $227,457, compared with $17,681 for all the loans in the pool.

The lawmakers, led by Sen. Elizabeth Warren, D-Mass., said the deal would further anti-consumer bank consolidation, but also criticized the OCC's proposed changes to the merger process, asking that they be strengthened.

The blockbuster merger proposal will be reviewed at a time when the Biden administration is expressing skepticism about consolidation. Its analysis will have to account for markets dominated by both big banks and the likes of Visa and Mastercard.

The stable outlook is an indication that — at least for some lenders — the much-feared cycle of cardholders defaulting on their obligations in the wake of the COVID-19 pandemic may not turn out to be so bad.

JPMorgan Chase, Wells Fargo and TD Auto Finance all see opportunities in providing financing to dealers for inventory, the purchase of competitors and the addition of infrastructure for electric vehicle sales. Two other banks recently said they're exiting the business, which could provide a further opening.

The $500 million in notes from the current deal are part of a multi-issuance series consisting of classes A, B, C, and D, with a 21.00% level of credit enhancement on the class A notes.

The McLean, Virginia, company is starting to “trim around the edges” of its auto portfolio, CEO Richard Fairbank said. That move stands in contrast with Capital One's leaning into its credit card business, which helped push marketing spending above $1 billion.

Payment rates for auto lenders and credit card issuers have remained strong despite a spike in unemployment. Whether these trends continue into 2021 will depend largely on the actions of Congress and the pace of medical advances.

Lenders have spent months puzzled by the persistently low delinquencies on their credit cards. Now, they’re seizing the moment.

Delinquencies have been ticking up since the start of the coronavirus pandemic and Capital One is warning of more pain unless the government provides additional relief to tenants and landlords.

Since March, issuers have tightened their criteria for opening new accounts and closed millions of existing ones in hopes of avoiding waves of defaults.

The ratings firm also took negative action with respect to Ally, Synchrony, Discover, Sallie Mae and Navient, citing the impact that the coronavirus crisis is having on their revenues and profits.

Closed showrooms, temporary bans on repossessions and a sudden spike in unemployment have dimmed the prospects of a sector that has boomed since the last recession.

The average price of a previously owned car has fallen in two consecutive months, and if the trend continues, lenders could see losses mount, Richard Fairbank said this week.