Neither of the credit-rating industry’s perennial market leaders – Standard & Poor’s and Moody’s Investors Service – managed to claim a top spot during the first quarter of 2015, according to a new Inside MBS & ABS ranking. Fitch Ratings ranked as the top player in rating the bigger non-mortgage ABS market. The company rated 43 ABS issued during the first quarter that represented 64.2 percent of total issuance by dollar amount. The company rated all eight credit-card ABS issued in early 2015, along with most of the student-loan deals. Fitch raised...[Includes two data tables]

The CFPB last week promulgated its long-awaited final rule allowing it to supervise larger nonbank auto-finance companies for the first time. Currently, the bureau supervises auto financing at the largest banks and credit unions. The new rule extends that supervision to any nonbank auto-finance company that makes, acquires or refinances 10,000 or more loans or leases in a year. Under the rule, those companies will be considered “larger participants,” and the bureau may oversee their activity to ensure they are complying with federal consumer financial laws. Those laws include the Equal Credit Opportunity Act, the Truth in Lending Act, the Consumer Leasing Act, and the Dodd-Frank Act’s prohibition on unfair, deceptive or abusive acts or practices. The new rule is ...

The Financial Industry Regulatory Authority started publishing pricing data for a broad range of ABS this week in an effort to increase transparency. Industry participants suggest that the new disclosures will prompt a decrease in trading and have some impact on pricing. The ABS pricing details are available through the Trade Reporting and Compliance Engine and include deals issued as 144A private placements. “The dissemination of transaction information in ABS is...

Last week’s $9 million settlement between wholesale lender Provident Funding and the Consumer Financial Protection Bureau and the Department of Justice to resolve allegations of excessive discriminatory fees on the part of independent mortgage brokers, has some key takeaways for the rest of the mortgage industry, top compliance attorneys say. “The first is that it obviously signals that mortgage lending is still on the radar at these agencies,” even though their attention has evolved into other types of lending products, “and they are still concerned with wholesale mortgage pricing,” said Melanie Brody, partner and co-lead of the fair lending practice at the K&L Gates law firm in Washington, DC. She also noted...

The CFPB plans to release its long-awaited final rule to implement Dodd-Frank Act amendments to the Home Mortgage Disclosure Act in late summer, according to the bureau’s Spring 2015 rulemaking agenda, which was released late last month. “The proposal would help align the law with existing industry standards for collecting data on mortgage loans and applications,” said the agency. “It would also improve HMDA’s effectiveness through changes to institutional and transactional coverage, modifications of reporting requirements, and clarifications of existing regulatory provisions. We expect to release a final rule in late summer.” Elsewhere, the CFPB continues to be steadfast on the Aug. 1, 2015, effective date for its TILA/ RESPA integrated disclosure rule, and its latest rulemaking agenda betrays no ...

Slowing growth, looser underwriting and increasing regulation are likely to tap the brakes on the joyride U.S. auto lenders have enjoyed in recent years, according to recent research from Standard & Poor’s Ratings Service. “Despite the robust performance of the auto sector in the past few years, we believe bumpier roads may lie ahead,” S&P Credit Analyst Igor Koyfman said in a recent report. “As lenders compete for market share, they have extended loan terms and increased the average financing amount, while yields have declined.” Lenders have also increased...

ABS issued in recent years have included a marked increase in the use of electronic contracts, particularly for prime auto deals. Industry analysts note that e-contracts can be treated similarly to physical contracts, though issuers must address concerns from investors, lenders and rating services. “The pace of e-contract adoption has increased, and some prime auto captives are believed by industry participants to be moving to 100 percent e-contract origination by the end of 2015,” DBRS said this week. “The adoption of e-contracts has also occurred across the ABS industry, with subprime auto and timeshare lenders beginning to use them for loan originations.” Use of e-contracts in the auto space has been boosted...

Non-mortgage ABS production jumped sharply higher in the first quarter of 2015, with $50.08 billion of new issuance, according to a new Inside MBS & ABS analysis and ranking. First-quarter issuance was up 38.1 percent from the previous three-month period, although early 2015 was down 6.3 percent from a year ago. The two strongest segments of the market were vehicle finance ABS, which accounted for 46.7 percent of issuance during the first quarter, and business loan ABS, which chipped in another 30.9 percent of new production. Ford Motor Credit had...[Includes three data charts]

Two new reports from Fitch Ratings, taken together, indicate a modest weakening in the collateral backing U.S. auto ABS deals is continuing, with perhaps a temporary reprieve thanks to short-term cash flow positives for consumers, mostly tax refunds and lower gasoline prices. Still, the overall outlook is positive. U.S. prime auto ABS collateral has been marginally weakening in the last few years, most recently because of amped-up competition among auto finance companies, Fitch said in a report out this week, based on transactions issued between 2007 and fourth-quarter 2014. “The quality of prime auto loan securitized pools was...

The CFPB doesn’t have enough power as currently authorized under the Dodd-Frank Act and should be given oversight over auto dealers, according to the “mother” of the bureau, Sen. Elizabeth Warren, D-MA. “The consumer agency’s early results have been good for consumers and good for the economy as a whole, but there’s more to be done,” Warren said in a speech last week. “Right now, the auto loan market looks increasingly like the pre-crisis housing market, with good actors and bad actors mixed together.” As the senator sees it, the market is now “thick with loose underwriting standards, predatory and discriminatory lending practices,” and increasing repossessions. She then cited one study that estimated that these kinds of auto dealer markups ...