CNW Research contends subprime approvals are moving higher this month at a pace possibly even better than what the exact figures indicate.

According to the firm’s latest Retail Automotive Summary, subprime approvals so far this month are registering 17.7 percent higher than September of last year. On a month-over-month basis, the increase is about a third of a percentage point; CNW pinpoints it at 0.34 percent.

“While the latter figure doesn’t seem like much, it reveals a strong but measured approach to providing loans to these folks,” CNW president Art Spinella said.

And perhaps more validity to Spinella’s assertion arrived via assessments made by Cristian deRitis, senior director at Moody's Analytics. deRitis joined Used Car Week speakers Lou Loquasto and Jennifer Reid for a webinar orchestrated earlier this week for the Consumer Bankers Association.

“As we’re thinking about these credit-challenged borrowers, consumers with credit scores below 660, the profile of these borrowers might be somewhat different than what we had prior to the recession or housing boom,” deRitis said.

“Today, we have borrowers with low scores as the result of mortgage foreclosure or the result of the housing collapse. Therefore, these are borrowers who are otherwise good credit but because of that mortgage foreclosure they have a very low credit score,” he continued.

“From a lender’s perspective, they still may be good borrowers to lend to, borrowers who will pay regularly on time,” deRitis went on to say.

Having a healthy stream of subprime borrowers likely will aid CBA member institutions to meet their objectives they shared during the webinar. A total of 68 percent of bank leaders who joined Moody’s and Equifax for the session said they expect overall auto loan and lease originations to continue to rise slowly during the next year.

That sentiment coincides with what the majority of webinar participants said was the biggest challenge going into next year. While 37 percent pointed to maintaining or increasing margins, 44 percent cited the goal of keeping growth at current rates.

Loquasto closed the webinar with a parting thought not only for commercial banks, but also any finance company that has its hand in vehicle lending.

“We consider the first approach to continuing these growth rates that we’ve had for the last few years — without having to buy deeper or give up yield — is to use the available data to better understand at a micro-level your market and different credit segments,” said Loquasto, who is part of the stable of experts who will be on hand for the SubPrime Forum, which runs during Used Car Week at the Red Rock Casino, Resort and Spa in Las Vegas.

The SubPrime Forum, an event orchestrated in partnership with the National Automotive Finance Association, is set for Nov. 10 through 12. More details and the conference agenda are available at subprime.autoremarketing.com.