Auto lending

Chemical CEO David Ramaker has a wide range of options — diversify business lines, expand organically in several Midwestern states, pursue M&A or all of the above — following his recent acquisition of Talmer. But new challenges accompany Chemical's higher profile, too.

First Commonwealth Financial in Indiana, Pa., has hired a former Regions Financial executive to lead several of its consumer lending groups.

Smaller institutions have increased the size of their auto books in the last year, with the 25 most-active lenders reporting a nearly 7% increase. More borrower demand and a pullback by some bigger lenders are contributing to the rise.

Lawsuits can be costly and time-consuming for all parties, so many plaintiffs’ attorneys are now trying to win quick settlements for their clients by bombarding banks with letters simply threatening them with lawsuits. One plaintiffs’ attorney admits to sending 250 such letters a month.

The decisions by JPMorgan Chase, Fifth Third and other banks to keep subprime auto lending in check look wise after new delinquency data from the New York Fed.

Ally Financial in Detroit has agreed to pay $52 million to settle probes and claims related to its role as the underwriter for subprime residential mortgage-backed securities in 2006 and 2007.

Applicants for credit cards, auto loans and mortgages are more frequently being told "No," and the reason appears to be more about lenders' new marketing efforts than stricter underwriting or weaker credit profiles.

Ally Financial, one of the nation's largest automobile lenders, saw profits fall during the third quarter as more motorists fell behind on their car payments.

The online lender is entering the car-loan market at a time when some banks are scaling back and regulators are sounding the alarm about deteriorating underwriting standards.

Amid shrinking yields, rising delinquencies and repeated warnings from regulators about frothy market conditions, several banks said on earnings calls that they plan to scale back or hold the line on indirect auto lending.