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New Ally CEO eyes expansion in subprime auto loans
February 5, 2015 / 3:58 PM / 3 years ago

New Ally CEO eyes expansion in subprime auto loans

NEW YORK, Feb 5 (Reuters) - Ally Financial Inc’s new chief executive said on Thursday that the auto lender plans to boost its revenue through steps including making more loans to riskier borrowers.

Jeffrey Brown, in his first public remarks as Ally’s top boss, said that over the past few years the company has fallen short of subprime auto lending targets set by the board and that it was an area he was looking at to grow.

Brown, speaking on a conference call with analysts, said that over time he expects subprime borrowers to account for somewhere between 12 to 15 percent of the loans it makes, from its current level of around 9 percent.

Ally is one of several auto lenders who have received subpoenas in recent months from the U.S. Department of Justice over subprime lending practices, an area that prosecutors are examining as they near the end of crisis-era cases.

Reporting by Peter Rudegeair; Editing by Meredith Mazzilli

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