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New arena at Will Rogers takes shape


The proposed Will Rogers Memorial Center arena continues to take shape as voters head for a Nov. 4 election to decide whether to approve new taxes to help pay for the $450 million facility.

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Cooking Class: Fort Worth chef brings home the gold

Toques off to Timothy Prefontaine. The executive chef at the iconic Fort Worth Club is currently the best in the nation, according to the American Culinary Federation. Prefontaine earned the title of 2014 U.S.A.’s Chef of the

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Fort Worth-based Woodmont plans $80M Hard Rock Hotel retail center

Woodmont Outlets of Fort Worth, an affiliate of The Woodmont Co., has partnered with Cherokee Nation Businesses for a proposed upscale retail development at Hard Rock Hotel & Casino Tulsa.

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Fort Worth firm 'simplifies' advertising

Reaching customers requires more than price slashing and flashy ads. In today’s competitive marketplace, machines – not men and women – are essential to tapping new markets and

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Trinity Valley School leader to leave in May 2015

Gary Krahn, head of school for the past eight years at Trinity Valley School in Fort Worth, will leave his position in May 2015 when he and his wife Paula will move

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GM Financial says Justice Department seeks subprime records

Tim Higgins and Sarah Mulholland
(c) 2014, Bloomberg News.


DETROIT — The lending unit of General Motors, the largest U.S. automaker, said Monday that the Department of Justice has subpoenaed documents related to its subprime lending practices.

The July 28 subpoena covers documents related to origination and securitization of subprime loans since 2007, GM Financial said in a filing Monday with the Securities and Exchange Commission. The Justice Department also is seeking information on underwriting criteria and warranties.

The inquiry by federal prosecutors adds another challenge for GM Chief Executive Officer Mary Barra, who is already grappling with a separate Justice Department investigation over the automaker's slow handling of potentially fatal defects in millions of its small cars. While that crisis has roiled for six months, GM's U.S. sales have kept increasing with new products such as the Chevrolet Tahoe and Buick Encore.

Easy credit has helped fuel industrywide U.S. auto sales, which are on pace for the best year since 2006.

"There's just so much capacity being added and so much more room for easy auto credit to keep pushing ultra-low monthly payment loans on a lower and lower quality of consumer," Adam Jonas, an industry analyst with Morgan Stanley, wrote in a note to investors Monday. "As one dealer recently told us — 'You have to be a loser to not get 0 percent for 72 months on your car loan.'"

GM Financial, the captive-finance arm of Detroit-based GM, represents the automaker's efforts to rebuild its ability to finance cars in-house after selling off 51 percent of then-GMAC to Cerberus Capital Management in 2006.

Following a bankruptcy reorganization in 2009, the automaker in 2010 purchased Fort Worth, Texas-based AmeriCredit Inc., which it renamed GM Financial, for $3.5 billion to write loans for subprime consumers and boost car sales. In late 2012, GM announced a deal to purchase Ally Financial Inc.'s international operations to help expand GM Financial's efforts overseas.

The Justice Department has been looking closely at the auto lending industry. In December, Ally agreed to pay a record $98 million to settle Justice Department and regulatory claims that the firm helped car dealers inflate the cost of auto loans to black and Hispanic borrowers.

Since 2011, Ally Financial has caused about 235,000 minority borrowers to pay higher rates, according to a complaint filed in December at federal court in Detroit. Ally was required to pay $80 million to settle the U.S. civil allegations and $18 million to resolve parallel claims by the Consumer Financial Protection Bureau, according to a Justice Department statement.

The Justice Department and CFPB are investigating other lenders for similar practices, Eric Halperin, acting deputy assistant attorney general, said in December.

The subprime auto segment has ballooned since contracting following the financial crisis. Private-equity firms, attracted by the high margins, have flocked to the business during the past three years. New York-based Blackstone Group acquired Irving, Texas-based subprime lender Exeter Finance Corp. in 2011, the same year that Perella Weinberg partnered with CarFinance Capital.

The influx of new firms to the business has fueled concern that companies are lowering underwriting standards to win business.

— Mulholland reported from New York.

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