Wells Fargo: Another Dominant Move
Wells Fargo is like the fat kid at the lunch table eyeing your Twinkies. It's got a dominant one-third share of the U.S. mortgage market these days. And it's looking to make further inroads in the auto loan space after 18% year-over-year growth in the second quarter.
Specifically, Wells is going after Ally Financial's Twinkies. Ally was spun out from GM after the financial crisis (it used to be GMAC) and is still GM's "preferred lender" ... at least until the end of 2013. Recently, Wells made an agreement with GM to increase the amount of territory it can offer "subvented" loans to. These are the loans at below-market interest rates you see advertised on TV (if you're wondering, the auto manufacturers make the lenders whole).Fool analyst Anand Chokkavelu would watch out for an increasingly hungry Wells Fargo if he were Ally Financial. He explains in the video below.
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The article Wells Fargo: Another Dominant Move originally appeared on Fool.com.Anand Chokkaveluowns shares and long-dated options in Wells Fargo and shares of GM.Andrew Tonner owns shares of Wells Fargo. The Fool owns shares of and has created a covered strangle position in Wells Fargo.Motley Fool newsletter services recommend General Motors Company and Wells Fargo & Company. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.