Santander Consumer USA president and chief executive officer Jason Kulas insisted the finance company has “more data than almost anyone else in the subprime space.” So when SCUSA cut back on its core non-prime retail originations by 15 percent during the first quarter, Kulas emphasized how that data helped to maintain “disciplined” underwriting standards.

"What we constantly do is we look back to prior vintages and leverage the performance that we are seeing into how we price new originations to make sure we’re doing everything we can to maximize the value going forward of those new originations," Kulas said when SCUSA hosted its first-quarter conference call with investment analysts.

“And so that process of optimizing the risk return happens right now to be impacting our subprime capture,” he continued. “But it’s not an effort to reduce our exposure to subprime. It’s again a result of this optimization process that we go through constantly.”

As much as Kulas and the SCUSA team examine their own data, the finance company boss acknowledged that Santander also is watching what other players in the subprime space are doing.

“On a comparative basis, it seems that there are markets willing to be a little bit more aggressive on certain pockets of those than we are right now,” Kulas said. “Look, we don’t see any concerning overall trend in terms of individual players. But I will point out that we are seeing some of the same trends we mentioned in the last quarter, where in general the larger players, the more sophisticated players with more data as a group have lost share to the smaller, maybe less sophisticated and in some cases less disciplined competitors.”

“We will continue to focus on maintaining the right risk, we’re balanced, and making sure we originate assets that come through cycles. And in future quarters, it could be a different result; it’s booking less subprime loans as a result of that process, not the overwriting goal,” he went on to say.

More of SCUSA’s data pointed to a retraction in the subprime space. Santander reported that its Q1 2016 net charge-off rate rose to 8.2 percent, up from 6.1 percent in the year-ago quarter. Meanwhile, because of the pressure from declining wholesale used-vehicle prices, SCUSA’s recovery percentage dipped to 51 percent in the first quarter, down from 59 percent a year earlier.

“Our losses are driven by the higher concentration of deeper subprime assets that we originated in early to mid-2015,” SCUSA chief financial officer Izzy Dawood said. “Based on our analysis and historical experience, we anticipate the deeper subprime assets will have this deeper loss curve earlier in the last cycle of the loan and then transition to follow a normal loss curve over the full life.”

Dawood also touched on how all the data SCUSA has at its disposal prompted him to describe 2016 as a “transition year” in regard to the ABS market.

“Clearly I think the market — especially the capital markets — are going through a transition phase as the Fed raises rates and as investors evaluate the risk return thresholds,” he said.