Loans Expert

Gov. Jim Doyle single-handedly banned auto title loans in Wisconsin on Tuesday.

The governor signed a bill that will regulate payday lending for the first time after years of unchecked growth by the industry. But he creatively used his partial veto power to rewrite the law, banning auto title loans and making other changes to protect consumers from what he called “predatory lending practices.”

Lawmakers approved the plan last month, but decided not to ban the short-term loans that are secured by a car title after key senators objected in the final weeks of the session. Instead, the bill that cleared the Senate and Assembly called for limiting auto title loans to one per customer for no more than 50 percent of the car’s value, excluding fees.

General Motors CEO Ed Whitacre is to announce Wednesday that the automaker will soon pay off $5.8 billion in loans from the U.S. and Canadian governments well ahead of a June 30 deadline, a move it has promised since last year.

Whitacre is to announce the payment at GM’s plant in Kansas City, Kan., and then fly to Washington to meet with House Speaker Nancy Pelosi and Michigan’s congressional delegation, people familiar with the plans said Monday.

Ford Motor Credit is expected to sell $1.09 billion of asset-backed securities supported by auto loans early this week, said market sources on Monday.

JP Morgan Securities, Morgan Stanley and RBS are underwriters for the multi-part offering whose largest tranches include $285 million of A1-plus 0.31-year short-term notes, $203.8 million of AAA-rated one-year notes, $382 million of AAA-rated two-year notes and $144.6 million of AAA-rated three-year notes, market sources said.

The deal’s smaller tranches include a $32.05 million AA-rated 4.12-year notes, $21.4 million of A-rated 4.41-year notes and $21.4 million of BaBB-rated 4.21-year notes, market sources said. Price guidance for the upcoming deal were not immediately available.

The U.S. unexpectedly lost 85,000 jobs in December, supporting Federal Reserve forecasts that a labor market recovery will take time and making it more likely interest rates will stay near zero for the next six months.

Payrolls fell last month after a revision showed a gain of 4,000 in November, the first in almost two years. The median estimate of economists surveyed by Bloomberg News projected no change in December. The jobless rate held at 10 percent.

According to TransUnion’s annual auto loan forecast, the national auto loan delinquency rate will increase about seven percent to 0.92 percent by the end of 2010. The 60-day delinquency rate is expected to be at 0.86 percent at the end of 2009.

“Our forecast indicates we will see auto loan delinquencies drop in the first and second quarters of 2010 due to many factors such as ‘cash for clunkers’ and tightening lending standards,” said Peter Turek, automotive vice president in TransUnion’s financial services group. “Delinquencies will rise in the second half of 2010 as economic pressures, along with traditional spending patterns of summer vacations, back to school and the holidays, will continue to strain consumers. While the rate of increase should be relatively mild, it is a cautionary number to those expecting an abrupt turnaround in the auto finance industry.”

Three automakers, including the Ford Motor Company, will get the first $8 billion from a $25 billion loan program intended to accelerate development of more fuel-efficient vehicles, the national energy secretary said Tuesday.

Ford, the only Detroit automaker that did not receive emergency government loans this year, will get $5.9 billion to help it retool 11 factories in the Midwest. The money, about half as much as Ford had requested, will help it make 13 of its models more fuel-efficient. Ford plans to start selling four models of electric vehicles by 2012.

Warning of a doomsday economic scenario, the top executives of the Big Three US automakers made a historic appeal yesterday for $25 billion in loans, telling Congress the money is desperately needed to stave off the collapse of the companies and the direct and indirect loss of millions of jobs.

“It’s about saving the US economy from a catastrophic collapse,” GM chairman Rick Wagoner told the Senate Banking Committee.

The chief executives of Chrysler and Ford also pleaded for the loans, which would come on top of a $25 billion package approved in September to help the automakers shift production to hybrid and other fuel-efficient vehicles. Since the passage of that measure, the credit markets have frozen, further cutting auto sales.

The White House has been in talks with Congress about finding a way to accelerate loans to automakers under a $25 billion program already appropriated for the troubled industry, spokeswoman Dana Perino said on Friday.

Asked at a briefing why automakers were not being considered for aid under the $700 billion bailout program for the financial industry, Perino said the White House was working to accelerate funding via a program approved specifically for the auto industry.

WASHINGTON – The Bush administration could quickly disburse $25 billion in loans to U.S. automakers if Congress amends the 2007 energy act that authorized the loan program, a top Bush administration official said on Thursday.

“The solution is right there. It just needs an amendment and the money can be out pretty quickly,” U.S. Commerce Secretary Carlos Gutierrez told Reuters in an interview.

The Bush administration would rather use the Energy Independence and Security Act of 2007 to aid the auto industry, than dip into the $700 billion financial rescue package, he said.

The U.S. Energy Department said today it has set the interim rules for how automakers can apply for as much as $25 billion in federal loans to help cover the costs of producing more energy-efficient vehicles.

Issuance of this interim final rule opens the process for automakers and component manufacturers to immediately apply for government funding under the Advanced Technology Vehicles Manufacturing Incentive Program,” Energy Secretary Samuel Bodman said in an e-mailed statement.

The department completed the guidelines in about half the 60-day period required by Congress, potentially giving carmakers quicker access to funds. Members of Congress, including House Energy and Commerce Committee Chairman John Dingell of Michigan, pressed the department to move quickly on the rules to help struggling U.S. automakers.