A group representing a wide range of financial institutions that provide lending for new car purchases is seeking authority from the United States Treasury Department to sell bad loans to the government. The American Financial Services Association, which represents automotive lenders like Ford Motor Credit Company and GMAC, hopes that by letting the government take over bad loans, it would restimulate the economy and help out the institutions.
“The onus is now on us to make the case for our companies to be able to sell non-mortgage related assets to the government,” Bill Himpler, the executive vice president of the American Financial Services Association, told Reuters.
The lenders are facing difficulty as more buyers default on their car loans due to the global economic slowdown. GMAC has enacted tough new requirements for lenders - a move that the rest of the industry is expected to follow in due time.
