Pierre Money Mart Blog

WESTLAKE VILLAGE, Calif. — What is the best way to drive lender success in these troubled times? According to J.D. Power and Associates it boils down to just one thing — dealer relationship.

Releasing its J.D. Power and Associates 2008 Dealer Financing Satisfaction Study this morning, which for the first time analyzed subprime dealer satisfaction, officials stressed that developing the dealer-lender relationship is particularly important given the current economic struggles and market turmoil.

For instance, within the floor planning segment, 44 percent of dealers report that the relationship with a lender is their primary reason for selecting a provider.

Similarly, the dealer-lender relationship is cited most often as the primary reason for choosing a finance provider in the subprime retail credit segment.

“In today’s tough times, automotive lending priorities may be focused on the issues of liquidity and risk rather than dealer satisfaction, but lenders cannot afford to miss the growth opportunity tied to dealer satisfaction,” explained Rich Howse, senior director of the automotive finance practice for J.D. Power.

“Dealers recognize those lenders that make the effort to partner with them for the long haul, so building and maintaining strong relationships with dealers will be the foundation of future revenue growth as the industry rebounds,” he highlighted.

Going hand in hand with relationship, auto finance providers that achieve high levels of satisfaction among dealers also tend to receive a larger share of business from those dealerships.

Some aspects of financing service that are particularly important to maximizing dealer satisfaction are the ability to interact with a single credit buyer, short application approval times and expedient funding, the company indicated.

Within the prime retail credit segment, dealers who are “delighted” with their lender provide the lender with 53 percent of the loan originations generated at the dealership on average, while dealers who report being merely “satisfied” provide lenders with 40 percent.

In contrast, however, dealers who are “dissatisfied” with their lender give the company only 26 percent of their business, on average

“Dealer satisfaction with automotive lenders clearly impacts the volume of retail business a lender receives,” noted Howse.

“With more than 20,000 dealerships in the U.S., the potential revenue linked to increasing satisfaction can translate to billions of dollars. For instance, in the prime retail credit segment, the difference between just one dealer who indicates they are ‘delighted’ and one who indicates they are ‘dissatisfied’ can mean an average of more than $3 million in additional loan originations in one year,” he pointed out.

Breaking it down, the J.D Power study investigated dealer satisfaction with finance providers in four segments: prime retail credit; retail leasing; subprime retail credit; and floor planning.

It examined five key factors that contribute to satisfaction within the prime retail credit, retail leasing and subprime retail credit segments, including provider offering, credit personnel, application/approval process, termination policy/service and sales representative relationship.

Furthermore, four factors were measured in the floor-planning segment, including provider offering, floor plan support personnel, inventory process and process/service.

After all these categories were tallied, J.D. Power found that one lender swept them all — BMW Financial Services.

“We’re proud of our consistently high rankings on this important study. We have more top awards for dealer satisfaction than any other individual financial services company since this study was introduced 14 years ago, explained Edward Robinson, president and chief executive officer for BMW Financial Services, Americas region.

“But to capture four top rankings in one year is phenomenal and a demonstration to our dedication to serving our dealer customers,” he continued. “This is the fifth consecutive year that we are at the top of the retail lease category.

He went on to say that, “In a difficult business environment, when many lenders have abandoned all or segments of the automotive finance business, we remain committed to providing a full complement of financial services to our dealer customers.

“Our dealers acknowledge the importance we place on their business and our role in supporting them. We appreciate their support with the feedback provided in all the measurements that comprise this comprehensive study,” he added.

According to J.D. Power the rankings came in as follows:

Prime Retail Credit

BMW Financial Services took the highest ranking in prime retail credit satisfaction with an index score of 946 on a 1,000-point scale, performing particularly well in four factors driving dealer satisfaction, credit personnel, application/approval process, termination policy/service and sales representative relationship.

Alphera Financial Services (a BMW Financial related provider) at 940 and Volkswagen Credit at 938 followed BMW Financial Services in the rankings.

Retail Leasing

With a score of 942, BMW Financial Services also ranked highest in retail leasing satisfaction for a fifth consecutive year, performing particularly well in credit personnel, termination policy/service and application/approval process.

Volkswagen Credit at 934 and Mercedes-Benz Financial at 924 follow in the segment.

Subprime Retail Credit

In the subprime retail credit segment, which is new to the 2008 study, interestingly enough, BMW Financial Services took home the highest rank, with a score of 966, performing well across all factors driving satisfaction.

Volkswagen Credit followed with 943, and GMAC ranked third in the segment with 922.

Floor Planning

Continuing its sweep, BMW Financial Services ranked highest in floor planning with a score of 963, performing well in all four of the factors that drive satisfaction.

Volkswagen Credit followed closely in the rankings at 960 and Audi Financial Services ranked third in the segment with 940.

The 2008 Dealer Financing Satisfaction Study was based on responses from 4,770 dealer principals who were surveyed March through July 2008.

NEW YORK — GMAC Financial Services confirmed today that it is in discussions with federal regulatory authorities seeking bank holding company status under the Bank Holding Company Act of 1956, among other things.

As a bank holding company, GMAC explained that it would obtain increased flexibility and stability to fulfill its core mission of providing auto and mortgage financing to consumers and businesses.

The lender indicated that it also expects to have expanded opportunities for funding and for access to capital as a bank holding company.

In connection with this initiative, GMAC said it is considering raising and maintaining significant amounts of additional capital to meet regulatory requirements related to bank holding company status.

In this regard, GMAC reported that it intends to commence a private offer to exchange a significant amount of its outstanding indebtedness for a reduced principal amount of new indebtedness.

Details of this offering will be disclosed in the near future.

Offering a cautionary statement, GMAC officials said they cannot assure that the company will become a bank holding company, that it will undertake the private exchange offer, or that if undertaken, that such private exchange offer will be completed or if completed, whether it will achieve a sufficient amount of capital to satisfy the applicable capital adequacy requirements.

“The benefits of this type of restructuring would allow us to put additional capital and liquidity resources immediately to work in financing consumers and automotive dealers,” explained Alvaro de Molina, GMAC chief executive officer.

GMAC Halts Auto Originations in Some Countries

In other news this week, GMAC announced adjustments to its European auto finance business as part of a strategic approach to manage resources during this time of significant capital and credit market disruption.

The actions include ceasing retail originations in Czech Republic, Finland, Greece, Norway, Portugal, Slovak Republic and Spain, effective Nov. 1.

In these markets as well as in Hungary and Denmark, officials said they will assess the implications of this challenging environment with the aim of diversifying funding sources for dealers over time.

GMAC said it will also implement a more conservative pricing policy throughout its European markets to more closely align lending activity with the current capital markets.

Masterlease, GMAC’s global full-service leasing business will not be affected by these changes, executives noted.

DALLAS — In an exclusive interview with SubPrime Auto Finance News, Inspire Auto Finance, a subprime auto finance lender, announced its entry into the market.

The management team spent 18 months developing a custom technology solution and reworking its subprime lending model to create company with a high standard for decisioning, customer care and profitability, in addition to automation and performance.

“Over the past 18 months, in order to achieve ‘The New Standard,’ Inspire built a revolutionary patent-pending credit module and dealer-desking tool — iLender,” Burton Brillhart, president, told SubPrime Auto Finance News this week.

“The company developed all capabilities and infrastructure in-house and formed strategic alliances in technology, origination and servicing to operate efficiently, effectively and safely in the national subprime marketplace,” he continued

The credit profiles of Inspire’s borrowers fall into the ‘D’ market.
Brillhart indicated that the company has already obtained sales finance licenses and regulatory approvals in all 50 states.

“The company has the complete flexibility to target and enter any market at any time,” Brillhart explained. “Inspire intends to roll out the program using a three-phased approach. Inspire is presently operating in Texas with a select group of dealers.”

And it will expand to encompass seven additional states by the end of the year, targeting select multi-state dealer groups. The company said it intends to go national within the next 24 months.

“Our intention is to serve franchised dealers who generate consistent subprime loan volume at predetermined levels,” Brillhart pointed out. “We have pre-populated our dealer application program with 12,000 dealers meeting these criteria. These dealers will have immediate online access to the dealer agreement and once executed can begin submitting applications within 24 hours.

“Interested franchise dealers who are not pre-populated will be asked to provide additional information and interview with a member of our marketing team before they are granted access to the dealer agreement,” he highlighted.

The application process is available at www.inspireautofinance.com.

Basically, Brillhart said, “Inspire takes a balanced approach to our loan approval process. While our decision is not FICO driven, our customers typically do have low FICO scores, which can drive interest rates higher. We look for customers who demonstrate stability at both their residence and employment, and do not purchase first-time buyers and self-employed individuals.

“At the heart of our program, we give weight to loan structure and collateral value retention,” he continued. “Our commitment is to place customers in cars they can afford to drive for the long term and encourage dealers to sell more economical units when the consumer cannot afford the vehicle they initially desire. When dealers meet this challenge, they are given a rational price, which balances the risk and return hurdles for the company on the specific piece of collateral and dealer profitability.”

The loan contracts will require significant cash down payments, conservative and consistent loan advance rates and low-mileage, affordable cars.

As part of its redesigned lending model, Inspire deployed new dealer-specific platforms set to raise the industry standard, including:

—iLender, Inspire’s patent pending, “thinking system” for decisioning.

—iRewards, a world-class dealer rewards program.

—iRep, dedicated virtual services and representatives for dealers.

Inspire partnered with DealerTrack, Credit Management Solutions, CenterOne Financial Services and Black Book to deliver a superior service and world-class financing solutions to dealer partners and consumers.

“More so than any other time in our industry’s history, we recognized the importance of providing a solution that would shorten the decisioning process while minimizing the risk for both the consumer and our dealer partners,” said Thomas Brower, chairman and chief executive officer. “As we enter the market, our innovative solutions and proven platforms help our dealers drive greater sales while also helping consumers with their loan financing.”

The ultimate goal of the company, Brillhart indicated, is taking the approach that each operational element of the auto finance business is an opportunity to turn the traditional processes inside out and make them “smarter, more efficient and more consistent.”

“Through this ‘whiteboard’ approach, Inspire has created a platform where its dealers can qualify, contract and fund a subprime contract within 24 hours,” he remarked. “Inspire believes this process will be ‘The New Standard’ of subprime.”

Brillhart pointed out to SubPrime Auto Finance News that the new lender has a “very talented and experienced management team.”

“The team has a combined strength of more than a century of experience in auto finance industry. This experience has survived several subprime economic cycles and weathered many a storm,” he explained “Our thoughtful approach for strategic planning and implementation, and our willingness to take decisive action is what drives our success.

“During the 2002 economic downturn, the subprime industry faced depressed inventory prices; decisive action allowed our management team to not only save but grow a company,” he added. “By increasing prices and simultaneously decreasing PTI minimums, growth projections were slashed. While the action was unfavorable at the time due to the perception of volume reduction, the result was a reduction of capital dependence and an increase in revenues.”

The management team consists of:

Chief Executive Officer and Chairman: Brower

Brower founded the first subprime company, Finance Security, which he merged with Summit Acceptance Corp. (now Capital One) and instituted subprime lending, officials indicated. He also founded Drive Financial Services (now Santander Consumer USA), which became one of the nation’s largest privately held subprime lending companies.

President: Brillhart

Brillhart served as general counsel for Drive Financial Services where he oversaw the company’s litigation and $800 million sale. He also served as senior partner of the Dallas law firm Godwin Gruber PC, where he focused on banking and consumer financial services, employment and intellectual property.

Chief Operating Officer: Mark Gallas

An operational veteran of the auto finance industry, Gallas served as the first vice president for loan administration at Countrywide Financial. He also served as senior vice president and compliance officer for Drive Financial Services.

Chief Financial Officer: Jody Day

A long-time senior financial and accounting expert of the auto finance industry, Day served as the chief accounting officer for Drive Financial. He also served as the chief financial officer of First City Funding and vice president and controller of Sovereign Credit Corp.

Chief Information Officer: John Fineout

Fineout served as the senior technology leader at Tatum LLC, Carreker Corp., Capital One Auto Finance and Banctec.

Chief Credit Officer: Craig Allen

Allen founded Delphi Structured Finance Corp. and related companies, providing asset-securitization and credit evaluation services in the U.S. and Europe. Allen was an early pioneer in non-prime auto finance. He served as a founding partner of the Aegis Holding Corp., which went public as a consumer finance company in 1994. He began his structured finance career at Bear Stearns in 1987.

So despite the weakened economy that is causing many other lenders to scramble, Brillhart said his company actually sees the current environment as an opportunity.

“What is being called a ‘credit crisis’ is a global adjustment to lending at sustainable levels. This creates a great opportunity for Inspire because it has forced our competitors to eliminate most of their aggressive unsustainable and irrational lending practices, paving the way for a sensible program that puts customers in a position to succeed,” he explained.

“Unburdened by portfolios originated in the form credit environment, Inspire is free to focus on current originations. Inspire’s program, born out of Inspire’s management experience, is based on the sound principals of ability to pay, commitment to vehicles that have demonstrated reliability and utilization of current technology to consider total cost of ownership and maximize efficiency. We feel our product is perfectly suited to the credit environment moving forward,” Brillhart stated.

Historically speaking, subprime lending on transportation has been around for a very long time, he noted. And the recent hard times will not alter this course.

“It fulfills a true human need and will continue to serve this need well into the future. The forced de-leveraging of financial institutions has resulted in the forced de-leverage of the consumer,” Brillhart said. “This does not mean the elimination of leverage for either the consumer or financial institutions. The capital continues to be available for prudent leverage opportunities. Application of credit fundamentals, discipline of execution and attention to detail has been and will determine our success.”

Another big part of the company’s mission is giving back. To do this, the company created the Inspire Foundation, www.inspirefoundation.net, as a national nonprofit organization that donates 10 percent of company earnings to various charities.

“In addition to monetary assistance, the foundation plans to offer educational opportunities and a variety of inspirational programs where they are needed most,” Brillhart concluded.

PROSPECT HEIGHTS, Ill. — During a Monday conference call to discuss half-year results, HSBC announced it has decided to exit the indirect auto finance business.

“We’re going to discontinue new auto loan originations via our indirect origination channel (or through dealers),” Cindy Savio, a company spokesperson, told SubPrime Auto Finance News this morning.

“As we stated previously, we have been under strategic review for some time. By exiting this business, it will allow HSBC Finance Corp. to focus on its core business of credit cards and consumer lending,” she continued.

She indicated that the business will continue direct auto loans in consumer lending branches until it can find an alternative third-party to take this over. The online direct network has also ceased originations.

In the conference call Monday, Michael Geoghegan, group chief executive, explained, “Today, we have announced the run-off of our vehicle finance business. Our vehicle finance portfolio actually improved credit quality over the period but the business does not have sufficient critical mass or the pricing power to provide an acceptable return to the group, and so we will not be originating further loans.

“We expect an orderly run-off of about 80 percent of the portfolio of $13 billion (U.S.) to be achieved in three years, with the remaining balance trailing off after that time. Our U.S.-based consumer finance business will now be focused mainly on cards and consumer lending,” he continued.

Overall, in the U.S., Geoghegan said the company’s personal financial services business posted a loss of $2.2 billion (U.S.).

“Loan impairment charges and other credit risk provisions rose by 85 percent on the first half of 2007 to $6.8 billion (U.S.), but declined by 15 percent compared with the second half,” he reported.

“The U.S. remains a difficult market, with rising unemployment and falling house prices, and we have recognized this with an impairment charge of $527 million (U.S.) on the goodwill of our North American Personal Financial Services business at the group level,” Geoghegan indicated.

Discussing overall company results, Stephen Green, group chairman, told investors, “In the first half of 2008 we remained profitable in all our customer groups. We also remained profitable in all of our geographical regions with the continuing exception of North America. Revenue rose by 3 percent compared with the first half of 2007; loan impairments were up by 58 percent, but were 8 percent lower than in the second half. Costs on an underlying basis were well contained, growing by only 4 percent compared with the first half of 2007, and down by 2 percent on the second half.

“Compared with the second half of 2007, we improved profitability in all our customer groups and for the group as a whole by 2 percent. In particular, it is notable that profitability in Global Banking and Markets — where extremely difficult market conditions led to write downs of U.S. $3.9 billion — was 37 percent higher than the second half of 2007,” according to Green.

“Meanwhile, our U.S. consumer finance business continues to face difficulties, but performed within our expectations, with loan impairments of U.S. $6.6 billion, lower than in the second half of 2007 by 17 percent,” he stated.

DETROIT — Late yesterday, GMAC Financial Services announced it has significantly tightened underwriting requirements for its auto loans on an indefinite basis.

More specifically, the changes include limiting purchases to contracts with a credit score of 700 or above.

Additionally, the company reported it will restrict contracts with higher advance rates and longer terms. Last week, the company said it grew the rate it charges dealers for providing non-incentivized consumer auto financing by 75 basis points.

“GMAC Financial Services today (Monday) implemented a more conservative purchase policy for consumer auto financing in the U.S. as a result of the lack of stability in the global capital and credit markets,” the company indicated in its statement.

“These changes in pricing and underwriting are related to the current market environment, which has reduced access to funds and increased the cost of funds. The company currently expects these actions to remain in place until the credit markets stabilize and accessibility improves,” it continued.

Meanwhile, GMAC’s wholesale auto finance business is unchanged by the actions, according to officials.

“The economy continues to force lenders to tighten their loan criteria while consumers are faced with increased difficulty in repaying those loans on time,” explained Scott Waldron, president of Experian Automotive, in a recent study by the company.

For June through July of this year, Experian discovered that 23 percent fewer loans financed fell below 739.

“Part of this shift is the result of lenders tightening their credit requirements. During this same period, the percentage of loans that scored 740 and above grew 19 percent,” according to the company.

Experian Automotive also recently identified the top 15 auto lenders by market share, then broke the details down further by type.

This AutoCount data indicated that GMAC was No. 2:

GMAC

All vehicles percentage: 6.2

Total loan percentage: 5.23

New loan percentage: 8.98

Used loan percentage: 2.98

Total lease percentage: 13.01

New lease percentage: 13.46

Used lease percentage: 7.97

NORTH RICHLAND HILLS, Texas — Triad Financial stopped all originations via its indirect dealer channel as of May 23, company officials told SubPrime Auto Finance News this week.

However, Triad continues to originate loans through RoadLoans, its direct lending channel, executives indicated.

Discussing the reasoning behind the move to cease operations in its indirect channel, the company explained, “Conditions in the financial markets have been extraordinarily unstable and have hindered our ability to adequately and cost-effectively fund future business through traditional methods, including asset-backed securitizations.”

The statement went on to say, “Triad has served the dealer community for more than 18 years and values the relationships we have enjoyed with these dealers and the customers we share. We will no longer accept new applications as of 5 p.m., May 23.”

The company also reported that it will honor existing approvals and fund eligible contracts forwarded by dealers through June 23.

Overall, officials said, “This announcement affects approximately 220 employees who work primarily in the indirect lending organization.”

In addition to continuing to approve loans via its direct lending channel, Triad reported it will “also continue its portfolio management operations at its corporate headquarters in North Richland Hills, Texas, with related customer care, loan servicing, loss recovery and remarketing functions there.”

Moreover, the company said it will continue to employee support staff at both its Texas-based and Huntington Beach-based facilities, representing almost 1,000 associates.

Looking to the future, Scott France, senior vice president of portfolio management, told SubPrime Auto Finance News, “We have a multibillion-dollar portfolio to manage, and we are very pleased with our results in terms of improved servicing levels and decreased delinquency.

“In addition, we have been working on a new and improved remarketing program, including the development of a best-in-class certification program, which we look forward to rolling out this summer. This new program will better meet the needs of dealers and auctions, and boost revenue for everyone involved,” he added.

Triad’s Latest SEC Filing

According to the company’s latest quarterly SEC report filed May 14, in early May, Triad Financial and some of its subsidiaries agreed to amend its Warehouse Lending Agreement, which was dated April 29, 2005.

The amendments included several items:

—Triad will borrow a maximum of $125 million between May 6 and June 30 to purchase newly originated contracts, in addition to the amount currently drawn under the facility, which was about $505 million as of May 6.
—After June 30, there will be no additional borrowings.

—After June 1, all collections from contracts pledged under the Warehouse Lending Agreement will be used to pay down the loans.

Furthermore, in the SEC filing, the company indicated that its Master Residual Loan Agreement also underwent some amendments:

—After May 8 there will be no new borrowings, in addition to the amount currently drawn under the facility, which is about $67 million as of May 6.

—For the period of May 6 to June 30, after payments of interest and fees, 75 percent of remaining collections from the securitization trusts’ residual assets will be paid to the lender in respect of principal, and any amounts remaining thereafter will be distributed as set forth in the Residual Loan Agreement, including for payment to Residual LLC.

—After June 30, after payments of interest and fees, 100 percent of remaining collections from the securitization trusts’ residual assets will be paid to the lender in respect of principal, and any amounts remaining thereafter will be distributed as set forth in the Residual Loan Agreement.

Triad Financial stated that it is in negotiations to gain new facilities to provide alternative funding.

“The company entered into a $49.5 million unsecured promissory note with one of its indirect equity holders, Hunter’s Glen/Ford Ltd. To provide interim funding on May 11, 2008,” the SEC report said.

In other news, the filing indicated, “The company and Residual LLC are also in negotiations to enter into a new residual facility with Hunter’s Glen/Ford Ltd. And GTCR Golder Rauner II, LLC, two of the company’s indirect equity holders, to provide funding to replace this promissory note. This new residual facility will be secured by a second priority security interest in the securitization trusts’ residual assets pledged under the Residual Loan Agreement. Once the Residual Loan Agreement is paid in full, the new residual facility will have a first priority security interest in the securitization trusts’ residual assets.”

Triad also reported its latest quarterly financial results for the period ending March 31. The company’s net income came in at $0.9 million, compared with $8.9 million for the same time frame of 2007.

“The decrease in net income was primarily due to a decline in other revenues (expenses) and lower net interest margin, partially offset by a lower provision for credit losses,” officials stated.

“Our results included $15 million and $0.8 million in losses on our derivative financial instruments for the three months ended March 31, 2008 and 2007, respectively,” they continued.

Average-owned receivables were down by 7.7 percent for the quarter, compared to last year. Executives attributed this to a lower level of originations, along with repayments and charge-offs as the portfolio ages.

“We purchased and originated $249.6 million of auto contracts during the three months ended March 31, 2008, as compared to $304 million during the three months ended March 31, 2007,” officials wrote.

Overall, the company said, “This decrease in originations was primarily due to lower levels of originations in both our direct and dealer channels. In response to higher than expected losses on receivables originated during 2006, we modified our contract origination strategy to better manage our credit risk, which resulted in lower volume levels during the last quarter of 2006 and throughout 2007.”

In another move, officials said, “Additionally, in response to problems currently being experienced in the asset-backed securitization market for non-prime loan originations, the company further tightened its underwriting criteria and increased pricing during the first quarter of 2008, which resulted in lower volume levels during the first quarter. We have also reduced the number of dealers we buy contracts from and have ceased accepting online applications from some direct lending sources.”

The median new contract size came in at $17,945, down a bit from $18,476 in the previous year.

Looking further at the credit markets, the company reported that as of March 31, the cumulative net loss ratio for Triad’s 2006-B and 2006-C trusts each exceeded one of their target ratios. This means that “the credit enhancement requirement to maintain cash reserves as a percentage of the portfolio immediately increased from 2 percent to 3 percent, resulting in a delay in cash distributions to the company. This requirement will remain at 3 percent until the trusts are back in compliance with their targets for three consecutive months.”

Given the current economy, Triad said it could lead one or more of its ratios to surpass targeted levels, causing stress on the company’s liquidity position.

“If that occurred, we could be required to significantly decrease contract origination activities and implement other significant expense reductions if securitization distributions to us are materially decreased for a prolonged period of time,” the report stated.

“The past several months have seen unprecedented turmoil in the global credit markets in general, and the asset-backed securitization markets in particular,” the document continued. “The well-publicized problems involving credit insurance providers may also have an impact on our ability to execute securitizations.

“Recently, AMBAC Inc., which has provided credit enhancement insurance on three of our securitization transactions since May 2005, announced that it would not provide such insurance on automobile securitizations in the future. Those companies that continue to provide credit enhancement insurance may be less likely to do so at the rates and on the terms at which prior transactions were executed in 2006 and early 2007,” executives explained.

Continuing on, the SEC filing said, “We believe that we will continue to require the execution of securitization transactions, along with borrowings under our warehouse and residual facilities in order to fund our future liquidity needs.”

Triad indicated that it can make “no assurance that funding will be available to us through these sources or, if available, that it will be on terms acceptable to us. If these sources of funding are unavailable to us on a regular basis, we may be required to further decrease contract origination activities and implement additional expense reductions, all of which may have a material adverse affect on our ability to achieve our business and financial objectives.”

On a positive note, in late May, AmeriCredit announced a $750 million asset-backed securitization under its automobile receivables trust, which mostly covers subprime auto loans. So perhaps the reins on the credit market are loosening a bit, which could mean good news for Triad down the road.