Ford Credit Will Close Its Subprime Lender, Fairlane Credit
Ford Motor Credit said March 8, 2002 it will close Fairlane Credit, a unit formed nearly six years ago to make vehicle loans to customers with bad credit histories, according to a March 8, 2002 article in the Detroit News. Ford Credit, which suffered heavy losses last year due to an increasing number of bad vehicle loans, will phase out Fairlane Credit this summer and integrate much of its operations into its main lending operation, said John Noone, executive vice president. Ford Credit, the world’s largest automotive finance company, has said it is moving away from aggressive “subprime” lending and slowing down growth after it was forced to reserve several hundred million dollars for credit losses in the fourth quarter. Subprime refers to loans to customers who are seen as credit risks. Ford Credit has no plans to shutter its other subprime finance subsidiary Triad Financial Corp. but could make some changes to its operations, Noone said. Fairlane Credit originated 113,000 contracts last year and has about $2.5 billion in assets, or 1 percent of Ford Financial's portfolio.