Manheim's Tom Webb acknowledged some finance companies are making what he called "silly loans" to subprime customers, but he's not expecting underwriting standards to tighten quickly in the short-term future.

During his recent quarterly conference call, Manheim's chief economist projected that it will be later this year at the earliest before finance companies make any significant adjustments in loans they're bringing into their portfolios.

"My sense is that there hasn't been a lot of material shift back toward in any way you call tightening," Webb said. "Subprime lending I still say is very loose. For them to pull back a little bit is probably a logical thing to do, but I don't think it's anything material."

In fact, Webb mentioned that he also heard how CarMax is intending to broaden its subprime lending strategy, a development SubPrime Auto Finance News reported here. When asked how overly aggressive strategy might create a possible impact on the subprime market, Webb responded this way.

"Yes, we're starting to get to the point where some people are making some silly loans, and they were not pricing the risk accordingly. Some of those risks you can't even price out right," Webb said.

"But in general I think it may make sense for the lenders to take a little breather in terms of their aggressiveness and see how their portfolios are performing," he continued.

"Today they're performing tremendously," Webb went on to say. "Whether they're concerned where there might be deterioration in portfolio performance in the first and second quarter of next year, yes, they might be a little concerned about that. And if it does happen, they will tighten. But I still think the credit cycle has got longer to run."

That comment prompted analysts to put Webb on the spot. Just how long will plenty of subprime paper fill finance company portfolios?

"They seem to be fairly content to me given their lending practices," Webb said. "I think they always worry because they know what's happening. The capital markets are throwing money at the lenders so lenders are pushing money at the dealers. They know where this game is going to end. I don't think they know they're at the end of the game yet."

 "You could have a turn in terms of the aggressiveness with which they're lending certainly by 2015, if not sometime this year with at least a more nuanced stance in terms of lending," he concluded.