MO' MONEY, MO' PROBLEMS

Feds Subpoena GM Over Subprime Loans

Banks may have been misled.

Car recalls and a massive list of victims' claims aren't the only thing General Motors is going to have to worry about this year. In security filings, GM revealed that the Justice Department had subpoenaed its lending unit on July 28 in an investigation into allegations that banks were misled into buying some auto loans. The Justice Department has been conducting an ongoing investigation into auto lending practices, but appears to specifically be questioning GM's criteria for underwriting auto loans and potential abuse of the easy credit for car purchases supported by the government. “There are no allegations set forth in the subpoena and GMF is cooperating with the request,” said GM Financial executive vice president Susan Sheffield. Chrysler and Ford have confirmed they were not subpoenaed by the government.