Ally Financial disclosed on Thursday that it had received a Justice Department subpoena as part of an investigation “related to subprime automotive finance and related securitization activities,” the New York Times DealBook blog reported on Friday. The investigation is in addition to an inquiry by the Securities and Exchange Commission. The company, the former finance arm of General Motors, said on Oct. 31 that it had received a request for documents from the SEC in connection with that agency’s inquiry into subprime loans. Ally Financial is the latest company to come under the government’s scrutiny of the booming subprime auto market. Santander Consumer USA and General Motors Financial, the current finance arm of GM, have previously disclosed that they received Justice Department subpoenas as part of the inquiry. Federal prosecutors, led by the office of Preet Bharara, the United States attorney in Manhattan, are looking at how lenders package and sell loans to investors.
