Dealers’ Financial Services history

The General Motors Acceptance Corporation was formed by GM in 1919 to provide customers with car loans.

In 1928, Ford set up an auto loan subsidiary.

By 1930, about two-thirds of all cars were bought on credit.

Speaking of demand, the 1956 Federal Aid Highway Act which created the United States Interstate System fueled demand for automobiles and enlarged the market for car financing.

In 1959, Ford Motor Credit Company LLC was founded to take over car financing/leasing operations for customers and dealerships.

Truth in Lending Act (1968): Standardizes the way costs and terms are disclosed.

In 1973, Earnest S. Rady, chairman of Westcorp, the parent company of Western Financial Bank, founded an independent lending company to provide car and truck loans to consumers.

Originally part of the Truth in Lending Act, it was revised and separately implemented in 1981 as Regulation M. The Act also specifies the information that must be provided in advertisements for leases.

In 1988, it incorporated as Western Consumer Service, a wholly owned consumer finance subsidiary of Western Financial Bank, to provide non-prime automobile finance services.

In 1990, Western Consumer Service changed its name to Westcorp Financial Services.

By 1991, the company had 32 offices.

By 1995, WFS had a network of 14 dealer centers and 63 branch offices that covered 13 states, including two states in which the company did not have offices.

By 1997, the company had issued loans in 32 states, with non-prime loans accounting for fully 50 percent of the loans issued.

——, "WFS Financial Posts Loss for First Quarter," Orange County Register , April 23, 1998.

By 1999, WFS Financial's turnaround was complete, and the company filed to sell two million shares of common stock, leaving its parent, Western Financial Bank, with an 80 percent share of the company.

The year 2000 was a good one for WFS Financial.

However, WFS Financial's stock price continued to decline, leading Westcorp to decide in 2002, that it intended to acquire the outstanding 16 percent of common stock.

In 2003, industry experts estimated that the automobile finance group was the second-largest consumer finance industry in the country, with more than $684 billion of loan originations that year.

Then, in 2008 it became a bank holding company and qualified for a 17.2 billion bailout from the United States Treasury.

Ally finished repaying the Treasury in 2014, shelling out $19.6 billion in total.

By the end of 2016 banks made up 35.6 percent of all United States auto loans.