"The percentage of loans and leases that were 30 days late in the first quarter increased slightly from a year prior to 2.1%, according to Experian."
So about only 22 Billion of potentially delinquent debt.
Almost all held by smaller predatory lenders and more aggressive investment groups.
"J.P. Morgan’s auto-related net charge-offs fell to 0.44% in the first quarter from 0.5% in the previous quarter, but were up from 0.38% in the year-earlier period."
The big financial institutions are smart enough to avoid this toxic debt. aka, there is minimal risk of wide spread economic repercussions due to defaulting car loans.
source: http://www.wsj.com/articles/j-p-morgan-chief-james-dimon-sounds-alarm-on-car-loans-1464889444
That said, many of these loans are predatory in nature, and there is plenty of criticism for the industry that one could offer on ethical grounds.
Banks are into it, but they are in the higher levels.
The smaller lenders bundle it up and get picked up by a small investment company, that gets up by the big banks. It's a house of cards scheme, the foundation is toxic, and they all build their crappy derivatives on it.
The bank doesn't care because they are basically just scammers selling them to clients, or doing market making which minimizes exposure.
They might be invested in the companies, or their risk extends until they kick them off their books, that is if they find investors stupid enough to buy this, which the always do.
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