As the company boosts originations to subprime and other borrowers, it remains to be seen if the improvements in asset quality will continue. A similar question mark is hanging over many consumer lenders these days.
That improvement and loan growth made up for a lower margin in a more profitable second quarter, but the loan growth relied heavily on the subprime lender's partnership with Fiat Chrysler that could be ending.
The Dallas auto lender might lose as much as one-third of its business if it severs ties with the automaker, raising fresh questions about whether its parent company will buy out shareholders and take full ownership.
The subprime lender could lose a big partner now that Fiat Chrysler has officially announced it will form its own auto finance unit, and the two are negotiating an end to their 6-year-old relationship.
The subprime auto lender paid $2.9 million to Connecticut consumers and a $100,000 fine for miscalculating balances owed on repossessed cars and for charging improper fees. It says the settlement is part of an effort to clean up "legacy issues."