I hear US Bank is layoff 45% in their Auto division
9 replies (most recent on top)
Lending businesses (whether it's mortgage, auto lending, whatever) go through cycles where volume fluctuates significantly. During bo-m times, banks ramp up hiring, and when volumes decline they have to scale back. It su-ks if you're part of that "variable" workforce during a decline but that has always been and will always be the reality of lending businesses.
If subprime borrowers with less than a 600 FICO score can't get loans, how many people above that 600-660 are being denied loans as well? While not defined as subprime, many borrowers in that category might be losing access as well. Capital One cut their originations by 35% and around half of their loans are to people under 660. Maybe 600-710 people are having some trouble.
It does not have to do with the dealership floor plan end at all. At least not for now. The current issue is the losses and lack of activity on banks consumer loan end (retail).
Are the dealerships paying their floor plan expenses on a timely basis or are the banks letting them not pay out of fear they will put the dealership in bankruptcy?
I worked in Consumer Dealer Services at USB and was laid off yesterday (11/15/23). About half my team was let go. And others moved from auto lending to various sales departments.
It's similar to the mortgage environment. High rates plus high prices of cars just mean that car payments are getting further out of reach for the average person. The number of loan applications is down big time.
Is there a specific reason why?
Just the auto segment?
I worked in Auto at USB, and was let go today. From what I could tell about half the people in my position were let go.
It is large and ongoing at present