The American Financial Services Association took issue with significant portions of a Bloomberg article published this week.

The report recapped an examination of nearly 3 million subprime auto loans packaged into securities between 2021 and 2023, tracing how some finance companies work with contract holders who are delinquent.

“It is detailed but missing important perspective,” AFSA wrote in one of its longest blog posts of the year.

The association continued, “as we have stated before, vehicle lenders want to keep their customers in their cars and want to work with them to do so.

“But the analysis frames a lender’s two options for a struggling customer — rework the loan or repossess the car — as competing profit ‘playbooks.’ What the reporters never seemed to ask is what borrowers want and what the alternative costs them. In fact, there is no costless option. Loan modifications might be best for customers in certain situations and recovering the asset a better resolution for struggling borrowers in other circumstances.”

AFSA then revisited a project orchestrated by the Consumer Financial Protection Bureau, which examined vehicle repossession data before and after the pandemic began.

The association wrote, “Between 22% and 30% of repossessions ended with the vehicle returned to the borrower under an agreement resolving the delinquency. And while repossessions have risen from pandemic lows, the 2025 repossession rate was 27% below 2009’s on a credit base 35% larger.

“Lenders work to avoid repossession when a loan can be saved for a simple reason Bloomberg’s own analysis supports: they lose more money repossessing a car than working out the loan. When a lender extends a borrower’s term, it is not to trap a borrower; it is doing what is economically responsible and what its customer prefers,” AFSA continued.

AFSA also mentioned a letter sent to Sen. Elizabeth Warren in February, emphasizing how repossessions often take months to complete because of state and federal regulations that govern the opportunities consumers have to get their contracts current again before the finance company can retake the vehicle.

“Which brings us to the warning in Bloomberg’s final paragraphs, the one policy makers should consider seriously,” AFSA wrote. “As established lenders tighten their standards, the article notes, consumers may be pushed toward newer or less transparent or ethical sources of credit. That is not a good outcome for consumers, especially those already feeling financially insecure.

“For millions of Americans, a car is the difference between working and not working, and regulated vehicle financing is how they afford one,” the association continued. “The same is true for the millions of American jobs tied to the manufacturing, sale, and upkeep of vehicles. The answer to a household’s financial strain is not a policy that shrinks responsible, examined, regulated credit. It is ensuring that credit remains available, so the borrower with two jobs and a school run never has to turn to whatever fills the vacuum where a licensed lender used to operate.”