GE to sell stake in Hyundai Capital

Category: Auto Financing
Published: Tuesday, 29 December 2015
Written by Super User

General Electric (NYSE:GE) has signed an agreement to sell a 23.3% stake of Hyundai Capital Services to Hyundai (OTC:HYMLF) and Kia Motors (OTC:KIMTF) for 703B won ($600.8M).

GEs transaction, which represents aggregate ending net investment of approximately $0.9B, is part of a broader deal to exit its entire 43.3% ownership in the 11-year-old auto financing JV over the following months.

Previously: GE plans to announce HQ decision in January (Dec. 21 2015)



Active Momentum Stocks- The Boeing Firm (NYSE:BA), General Electric Firm (NYSE:GE)

Category: Auto Financing
Published: Monday, 28 December 2015
Written by Super User

Shares of The Boeing Firm (NYSE:BA) jumped up 1.05% during the previous trading session as the firm opened its session at $141.72 With outstanding shares of 669.98, its volume 2.79 Million was higher than average volume. Boeing Co. decided to pay a $12M penalty to the US government and make broad changes in how it builds commercial aircraft to resolvecomplaints so as to its safety and quality processes fell short of standards. The penalty is the second-highest enforcement case ever settled by the Federal Aviation Administration. Additional penalties of as much as $24 million could be levied if Boeing doesn't adhere to the accord in the next five years, the FAA stated Tuesday in a statement. Amidother requirements, Boeing must improve management oversight, accountability and internal audits; conduct more training; and "meet progressively more stringent performance metrics in the quality and timeliness" of reports to the FAA. The firm held price to earnings ratio of 17.89. Can investors take a chance on Buying BA this week? Read Considerable Report Here

Stocks of General Electric Firm (NYSE:GE) increased 0.30% to trade at $30.49 in last session with shares volume of 41.97 Million. GE (GE) reported that it has reached into contract to sell a 23.3% stake of Hyundai Capital Services (HCS) to Hyundai Motor Firm as well as Kia Motors as division of a broader accord to exit its entire 43.3% ownership in HCS over the following months. Hyundai Capital is an 11 year old joint venture among Hyundai Motor Firm and GE Capital that offers consumer financial products, comprising auto financing, auto leasing services, personal loans and home mortgages. Hyundai Motor Firm and Kia Motors are global leaders in the vehicle industry. The Firm showed a negative -5.40% in the net profit margin and in addition to its operating margin, which remained 9.50%. Will General Electric Firm retain its glamour following this report? Find Out Here Totally Free



House passes legislation that would nullify CFPB Bulletin regulating car dealers

Category: Auto Financing
Published: Monday, 28 December 2015
Written by Super User

WASHINGTON (Legal Newsline) - The US House of Representatives recently approved a piece of legislation that would nullify a 2013 bulletin issued by the Consumer Financial Protection Bureau, but would likely need the Senate to do the same by a veto-proof margin.

The Reforming CFPB Indirect Auto Financing Guidance Act targets a bulletin that gave guidance on Equal Credit Opportunity Act indirect auto lending requirements.

"The bill passed with a veto-proof margin in the House, but it will have to pass the Senate with the two-thirds majority needed to withstand the possibility of a presidential veto," said Elizabeth M. Bohn, shareholder at Carlton Fields Jorden Burt.

Bohn, who co-chairs the firm's Consumer Finance Industry Group, added that those who opposed the bill argue that it would prevent the CFPB from effectively carrying out its duty to protect minority borrowers, and promised an administration veto.

"In my personal opinion, the bill does not appear to impair the CFPB's authority to protect minority borrowers," Bohn said.

"Rather, it is aimed at ensuring that (1) the Bureau does not regulate car dealers, who are exempt from(the Dodd-Frank Wall Street Reform and Consumer Protection Act);(2) that the methodology used by the Bureau to support its regulatory guidance based on findings of disparate impact is transparent and yields reliable information about disparate impact; and (3) that industry has fair notice of CPFB regulatory action vs. guidance that appears to be de facto regulation," Bohn said.

In 2013, theCFPB issued guidance that challenged a dealer's ability to discount the annual percentage rate (APR) offered to consumers to finance vehicle purchases.

According to the bulletin, the CFPB confirmed that some indirect auto lenders use "markup and compensation policies" -- policies that allow auto dealers to "mark up lender-established buy rates" and then compensate the dealers for those markups.

And since the compensation policies are created at the discretion of the dealers, the bulletin asserted that there is a "significant risk" of creating pricing disparities based on race, national origin or other prohibited bases. The ECOA makes discrimination by a creditor "in any aspect of a credit transaction" illegal.

CFPB's bulletin proposed a strong influence over common auto industry practices, and some have wondered if the CFPBs ability to change the auto industry world sets a difficult precedent in the industry. Bohn believes it does.

"The CFPB's regulatory and enforcement activities against indirect auto lenders affect the auto finance industry and dealers alike," Bohn said.

"For lenders to implement the policies and procedures needed to comply with Bureau expectations is costly and burdensome. Those added costs and burdens imposed on lenders, along with the reduction in profitability to dealers for originating contracts, could reduce the number of deals financed and lead to fewer financing options for consumers."

Since the CFPB is supposed to deal with financial institutions, some question whether theCFPB is overstepping its boundaries by attempting to regulate the auto industry.

"The CFPB is authorized to regulate financial institutions and larger market participants providing consumer financial services, including consumer auto lenders. It isn't authorized to regulate auto dealers," Bohn said.

"The bill's sponsors claim that the Bulletin represents a Bureau effort at an end-run around Dodd-Frank's exclusion of auto dealers by attempting to regulate compensation paid to auto dealers.

Specifically, by using enforcement actions against large indirect auto lenders to pressure finance companies to lower caps they set on dealer reserve or eliminate this discretion altogether. While indirect lenders who purchase consumer auto loans may be creditors subject to the Equal Credit Opportunity Act, and subject to CFPB enforcement, I would agree that the Bulletin's expectation that lenders impose significant control on dealer compensation and mark up policies to avoid violations of ECOA swerves into regulation of auto dealers.



Royal Bank of Canada (RY) Insider Sells C$2319982.47 in Stock

Category: Auto Financing
Published: Sunday, 27 December 2015
Written by Super User

Shares of Royal Bank of Canada (TSE:RY) traded up 0.82% during midday trading on Wednesday, reaching $75.00. The companys stock had a trading volume of 1,363,998 shares. Royal Bank of Canada has a 52 week low of $68.05 and a 52 week high of $81.53. The company has a 50 day moving average of $75.26 and a 200-day moving average of $75.05. The stock has a market capitalization of $111.38 billion and a price-to-earnings ratio of 11.15.

RY has been the topic of a number of recent analyst reports. Barclays reduced their price target on Royal Bank of Canada from C$74.00 to C$71.00 and set an underweight rating on the stock in a research report on Thursday, September 10th. Banc of America Sec reduced their price target on Royal Bank of Canada from C$77.00 to C$72.00 and set a buy rating on the stock in a research report on Saturday, August 29th. cut their target price on Royal Bank of Canada from C$80.00 to C$76.00 and set a sector perform rating on the stock in a research report on Thursday, August 27th. Scotiabank set a C$79.00 target price on Royal Bank of Canada and gave the company an outperform rating in a research report on Wednesday, September 30th. Finally, CIBC cut their target price on Royal Bank of Canada from C$84.00 to C$83.00 in a research report on Tuesday, September 1st. Two investment analysts have rated the stock with a sell rating, four have issued a hold rating and five have issued a buy rating to the company. The stock has a consensus rating of Hold and a consensus target price of C$82.42.

Royal Bank of Canada is a banking company. It serves over 16 million personal, business and corporate clients across a diversified mix of businesses in 40 countries. The Company's five business segments include Personal Commercial Banking, Wealth Management, Insurance, Investor Treasury Services and Capital Markets. The Company's Personal Commercial Banking consists of personal and business banking operations, auto financing and retail investment businesses. Wealth Management consists of Canadian Wealth Management, United States and International Wealth Management and Global Asset Management. Insurance consists of its insurance operations in Canada and globally and operates under two business lines: Canadian Insurance and International Insurance. Investor Treasury Services segment offers global custody, fund and pension administration. Capital Markets consists of a majority of its global wholesale banking businesses.

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