Consumer Lenders Don’t Believe Current Crisis Will Eclipse 2009

Consumer lenders Ally Financial and Synchrony Financial do not yet believe the current crisis will be as bad as the financial crisis of 2008 2009; Ally Financial said its loan-loss reserves for net charge-offs on retail auto loans will be about 1.8 to 2.1 percent, a 30 percent improvement on the previous crisis; Synchrony Financial has also said they do not believe the charge off rate will be higher than the 11 percent they saw in 2009; there are a few reasons for their thinking, lenders believe their loan books are better than they were in 2008 and the government response this time around has been immediate; about half of economists surveyed by the Wall Street Journal believe we will have a “U” shaped recovery; Ally Financial said 25 percent of accounts have requested forbearance with 70 percent of those accounts having never missed a payment before. The Wall Street Journal

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