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GM Financial Arm Strengthens Loan Portfolio

Captive arm remaking loan makeup, reducing risk.

by on Mar.17, 2016

GM Financial is strengthening its loan portfolio with more prime loans by using subsidized deals.

General Motors has moved to reduce its dependence on subprime loans, according to a new report from Moody’s Investor Services.

General Motors Financial, the Dallas-based finance company GM acquired after it escaped bankruptcy in 2009, had its roots in the sub-prime finance business that fell into disfavor during and immediately after the 2008-2009 recession.

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However, as car sales recovered, the company’s collection of lower-than-prime loans, meaning loans to consumers with scores less than 680, began growing, hitting a high 83% of the portfolio in 2014. Since that high water mark, the finance company’s reshaped its portfolio. (more…)

Feds Subpoena Records from GM Finance Unit

Investigators focus on GM Financial’s subprime loans.

by on Aug.05, 2014

GM's financing arm, GM Financial, was subpoenaed by the Justice Department last month.

GM Financial’s subprime auto loans are the target of a subpoena from the U.S. Justice Department served last month. The documents requested go as far back as 2007, the company reported in a Securities and Exchange Commission filing.

Federal investigators served General Motors financial arm on July 27 with a subpoena seeking documents involving origination and securitization.

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Company executives have confirmed the request, but quickly point out that no allegations or charges have been filed. (more…)

GM Acquires Ally’s Overseas Lending Operations

Maker hopes to boost sales in Europe, Latin America and China.

by on Nov.23, 2012

Ally, the former GMAC, will shift its focus back to auto lending in the U.S. market.

Ally Financial Inc. – what used to be known as GMAC — plans sell its lending operations in Europe and Latin America, as well as its share in a joint venture in China, to General Motors Co. for $4.2 billion.

GM Financial, a wholly-owned GM subsidiary, will assume responsibility for the management of Ally’s international operations. The acquisition will also double the size of the GM Financial loan portfolio to more than $32 billion, General Motors’ Chief Financial Officer Dan Ammann said Wednesday.

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“We’re bringing those assets back into the family, which we think will help us increase our sales around the world. We have a lot of new product launches coming all around the world, across Asia and China, Ammann said during a conference call with reporters. “It will help drive top line growth,” he said, adding, “We couldn’t be more pleased.”


GM Buys AmeriCredit, Aims To Rebuild In-House Lender

GM Financial deal valued at $3.5 billion.

by on Sep.29, 2010

GM's purchase of AmeriCredit will permit it to create a new "captive finance" subsidiary.

With the $3.5 billion purchase of lender AmeriCredit, General Motors plans to create a new, in-house financing arm, GM Financial, to replace the “captive” lender long known as General Motors Acceptance Corp.

The Detroit automaker was recently rebuffed in its bid to regain control of GMAC, now known as Ally Financial.  Having a wholly-owned financing unit, GM believes, can help enhance its ability to sell cars, trucks and crossovers while providing an additional profit center of its own.

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“This acquisition allows GM to offer an enhanced range of solutions for our customers and dealers, and establishes an important strategic capability for GM,” said GM Vice Chairman and Chief Financial Officer Chris Liddell.