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Auto lending is vigorous even as high-risk delinquencies build

“In all, there were $1.2 trillion in auto loans outstanding in the U.S., up $23 million from the previous quarter” writes Rachel Koning Beals for Only about one-third of all outstanding subprime auto debt, that carried by the lowest-rated borrowers, was originated by banks and credit unions.That’s more than double the 4.4% delinquency rate for subprime loans made by traditional banks, a number that’s largely improved since the end of the financial crisis.Auto loans have grown for 26 straight quarters, drawing more scrutiny of the expansion of the riskiest slice of the market, where delinquency rates are also up, a New York Federal Reserve report out Tuesday showed.Looser borrowing in this category risks exposing troubled loans should the economy turn south, Fed commentators said.

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