NEW YORK — Wells Fargo & Co. just ended its 3 1/2 year reign as the king of U.S. auto lending.
The bank’s decision months ago to pull back from making new loans cleared the way for Ally Financial Inc. to become the industry’s biggest source of funding, according to filings the firms submitted this month to the Federal Reserve. The documents show that by the end of June, Wells Fargo held about $58 billion of outstanding auto loans, compared with $59.8 billion at Ally.
Seven straight years of increasing U.S. auto sales have left a glut of vehicles on the road, hurting resale prices and making it harder for lenders to blunt losses by repossessing cars when borrowers default.
While Wells Fargo has said it’s pulling back, Ally — which makes more of its money from auto lending than any other major U.S. bank — has said it’s standing by the business.