GM Finance subpoenaed over subprime auto loans
New York: GM Finance says it has received a subpoena from the US Department of Justice for documents related to subprime auto loans.
The affiliate of General Motors Co said in a filing today with the government that the Justice Department requested documents related to the origination and securitisation of subprime auto loan contracts since 2007. Subprime loans generally are made to borrowers with questionable credit repayment histories.
GM Finance said the Justice Department is considering a civil lawsuit for potential violations of the Financial Institutions Reform, Recovery and Enforcement Act, a federal law that was passed following the savings and loan crisis in the 1980s.
General Motors Financial Co said it received the subpoena on July 28. It disclosed the request in a filing with the Securities and Exchange Commission.