Two months ago, we reported that after the largest US bank had quietly exited the new loan issuance market, and hiked mortgage standards, JPMorgan also stopped accepting HELOCs, in what appeared to be a comprehensive withdrawal from the loan market ahead of the coming deluge of corporate bankruptcies spawned by the coronavirus shutdowns.

This was confirmed just weeks later when in the latest Senior Loan Officer Survey we found that it has become next to impossible to get a loan as bank lending standards have soared for everything from C&I loans, to mortgages, to consumer loans.

Now, in the latest indication that banks are bracing for even more default pain, this time stemming from what even before the coronavirus crisis was the next subprime disaster-in-waiting, namely auto loans.  According to CNBC, Wells Fargo is hitting the brakes on its auto loan business, until recently a major source of revenue for the company.



Read more…