Ally Financial subpoenaed over subprime activities

Ally Financial has received a subpoena from the US Department of Justice (DOJ) asking for information related to the bank’s subprime automotive finance lending practices.

The company revealed the news in a filing with the Securities and Exchange Commission (SEC), which stated: “Ally recently received a subpoena from the DOJ requesting information in connection with its investigation related to subprime automotive finance and related securitization activities. Other financial institutions have disclosed receiving similar requests earlier this year.”

Ally will cooperate with the investigation and the subpoena, which arrived this week, a spokeswoman for the lender said.

Last week Credit Acceptance Corp indicated it had been issued with a subpoena from the DOJ, following similar revelations from Toyota Motor Credit and American Honda Finance Corp.

At the end of 2013, Ally agreed to pay $98 million to settle a DOJ and Consumer Financial Protection Bureau probe into allegations that the company had a pattern of loan discrimination against minority borrowers. Ally made no admission of any wrongdoing in the case.

Separately, Ally has also announced that has exited the Troubled Asset Relief Program, set up by the US government in the wake of the Lehman Brothers collapse, after the US Treasury sold its remaining 54.9 million shares of Ally common stock.