Subprime lending

More than 45% of collateral for the $254.4 million CPSART 2019-A are either "preferred," "super alpha” or “alpha plus”; that's up from 42.4% of collateral for the prior deal.

The latest deal from the sponsor's DRIVE platform for deep subprime loans benefits from recent improvements in underwriting; both S&P and Moody's have lowered loss expectations.

It’s a trend that bears watching, particularly for holders of the riskiest securities issued in subprime auto securitizations, according to S&P Global Ratings.

The $175 million deal is backed by loans with an average balance of $2,365; fewer of them are "renewal loans" to existing borrowers who qualify to borrow more because of previous on-time payments.

The agency alleges the subprime auto lender violated consumer finance laws by misrepresenting the level of guaranteed insurance protection.

The rating agency is now considering lowering its BBB rating on the class B notes. The rating agency also downgraded the class C notes issued in the deal, for a second time, to CC from CCC+.

Subprime originations are climbing in multiple consumer loan categories, including mortgages, but the increase is much smaller in the home loan sector than it is in other markets, according to TransUnion.

Flagship, Santander Consumer USA and AmeriCredit are printing $2.3 billion in new notes backed by subprime auto-loan originations.

Both Kroll and S&P expect losses on collateral in the subprime consumer lender's latest deal to be higher than its 2017 deals; Kroll alone assigned a lower rating to the senior tranche.

The deal comes a year after the captive finance company began excluding low-FICO loans from its primary auto loan ABS platform.

Sales of older vehicles are on the rise and prices are headed back up, so there's more collateral available and it is also performing better.

In a move designed to improve access to financial products for consumers with low credit scores and short credit histories, Experian, FICO and Finicity are developing an "UltraFICO" score that lets individuals share checking and savings account data and help lenders better assess risk.

Both S&P and Moody's have cut expected losses on $732 million deal, yet credit enhancement on the senior tranches is unchanged from the prior deal.

The credit quality of loans backing the Cailfornia-based lender's $183 million securitization is better than that of its inaugural deal, which was only rated 'A' by Kroll.

The California-based CDFI has a growing portfolio of renewal loans from prior borrowers eligible for higher credit limits.

The fifth SDART deal of the year benefits from the same improvement in credit quality as other recent transactions from the platform.

Consumer Portfolio Services' fourth auto-loan securitization of the year has a 3.97% share of loans previously assigned to CPS asset-backed portfolios, compared to an 11.97% share in its last transaction.

DriveTime is making less-risky loans under a $750 million contract purchase agreement with Ally Financial; it appears that the sponsor is also funding some of this lending through its own securitization platform.

Gov. Jerry Brown’s administration sent letters Wednesday to 20 nonbank lenders that charge triple-digit annual percentage rates to try to determine if their use of online referrals is steering borrowers into larger loans than they want or need.

The nation's fifth-largest bank on Monday rolled out a three-month consumer loan that is far less expensive than the typical payday loan. The move comes as regulators are encouraging banks to reach out to the subprime market, which they largely abandoned.