Cerberus Capital Management LP is seeking buyers for the auto lender Chrysler Financial, which the private-equity firm acquired as part of its takeover of Chrysler LLC in 2007, said people with knowledge of the matter.

Cerberus has begun soliciting interest in the Farmington Hills, Mich., business from large banks, said the people, who spoke on condition of anonymity because the discussions are private.

The former lending arm of Chrysler has a book value, or assets minus liabilities, of about $6 billion or $7 billion, the people said Nov. 23.

Wells Fargo & Co., and JPMorgan Chase & Co. are among the banks that could benefit from expanding auto lending as sales rebound, said Gerard Cassidy, an analyst at RBC Capital Markets in Portland, Maine. An improved used-car market and more-conservative underwriting standards are reducing losses on bad loans, he said.

"Auto lending is a very attractive line of business for the commercial banks," Cassidy said. "The banks that are in the business are making very good money in the business because the credit losses are unusually low."

A sale of Chrysler Financial would represent another step in unwinding Cerberus founder Stephen Feinberg's bet on the U.S. auto industry.

His takeovers of General Motors Corp.'s auto lender in 2006, followed by Chrysler in 2007, preceded a decline in U.S. auto sales that sent both carmakers into bankruptcy.

Feinberg subsequently lost control of GMAC and Chrysler and held on to Chrysler Financial. The lender repaid its $1.5 billion in Treasury Department bailout funds last year and in July sought to return to large-scale lending.

Peter Duda, a spokesman for Cerberus, declined to comment. A representative for Chrysler Financial didn't return a call.

There are only a "handful" of commercial banks, also including U.S. Bancorp of Minneapolis and PNC Financial Services Group Inc. in Pittsburgh, that could afford Chrysler Financial, Cassidy said. The company would be a good fit for Wells Fargo, which already has an auto-lending arm, he said.

"Here's a juicy asset that has incredible yield to it and if you know how to run the auto business like Wells, it may make a lot of sense to consider this one," Cassidy said.

Mary Eshet, a spokeswoman for Wells Fargo, of San Francisco, declined to comment.

Chrysler Financial had $26 billion of loans and had issued less than $100 million of new loans in the first half of this year, a person with knowledge of its business said in July.

The past few years have seen GM and Chrysler severed from their captive lenders.

GM sold Cerberus a 51% stake in GMAC in 2006. Bailouts of that lender, now known as Ally Financial Inc., left the U.S. in control and shrunk Cerberus' stake to 14.9%.

Cerberus bought a majority stake in Chrysler for $7.4 billion from DaimlerChrysler AG in 2007.

Chrysler, the third-biggest U.S. automaker, went bankrupt in 2009 along with GM, and Ally supplanted Chrysler as the primary lender for Chrysler dealers.

Meanwhile, GM this year got back into captive lending, acquiring the subprime lender AmeriCredit Corp. for about $3.5 billion as its new finance arm.

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