A top financial regulator warned of risks in the fast-expanding auto-lending sector, raising the prospect of fresh regulatory pressure in an area that has been a bright spot for banks, the Wall Street Journal reported today. While policymakers have generally declared the U.S. banking system recovered from the financial crisis, Comptroller of the Currency Thomas Curry raised a rare red flag, saying in a speech that some activity in auto loans “reminds me of what happened in mortgage-backed securities in the run-up to the crisis.” “We will be looking at those institutions that have a significant auto-lending operation,” he said. The comments are likely to raise concerns in particular at firms like Wells Fargo & Co. and other national banks active in auto lending that are regulated by the comptroller’s office. Curry’s vow of closer scrutiny wouldn’t affect their competitors at lenders owned by large auto manufacturers.
