Subprime Auto-Loan Bonds Called Small Part of Loan Growth

The ability to bundle car loans into securities isn’t fueling a credit bubble, said Chris Pink, a managing director at Wells Fargo & Co.’s securities arm.

About $30 billion to $40 billion of subprime car loans are held within asset-backed securities, compared with the $203 billion of such loans outstanding, Pink said today during a panel discussion at a conference in Las Vegas. While subprime volumes are growing, borrowing by the weakest-credit borrowers represents only about 20 percent of auto-loan originations, compared with a peak of about 30 percent before the 2008 financial crisis, he said.