Declining mortgage refinance rates are causing a slowdown in solar ABS prepayments, increasing risks for investors.

CRT deals involving auto loans typically have a pro rata structure, which can create more risks for investors than the sequential pay structure in ABS transactions. Structures are also evolving, including a deal issued by a nonbank in partnership with a bank.

Santander Consumer USA is a long-time issuer of auto ABS, but its affiliated Santander Bank only started originating auto loans in recent years. And to this point, the bank has issued only CRT with auto loans.

GreenState Credit Union issued its first auto ABS this week and M&T Bank returned to the market for the first time since 2013.

The new credit card late fee rule could increase charge-offs and lead to tighter credit card underwriting standards.

Investors have shown increasing demand for ABS with home improvement loans and other esoteric assets.

Bank ABS holdings rose unexpectedly in the fourth quarter, but most of the gain came from a portfolio securitization of consumer loans by one institution. (Includes two data tables.)

Attendance at the SFVegas conference this year hit another record. Demand for MBS and ABS is exceptionally strong, with few concerns on the immediate horizon.

New prohibitions against conflicts of interest in the MBS and ABS market will take effect in June 2025. But SEC officials are urging industry participants to raise compliance concerns, if any, as soon as possible.

Higher vehicle prices and inflation are reducing auto lending to subprime borrowers and lifting the prime sector’s share of ABS issuance.