This is another year tracking 2025's record charge-offs. Loan modifications are at the highest level since they were first reported. The industry total is bad. The useful part is how unevenly the stress is spread.
CUCollector's first-quarter read puts credit union new and used auto portfolios at $479.5 billion. That is down only $514 million on the quarter, the smallest decline since 2023. Loans sixty or more days delinquent finished at $3.8 billion, a 0.80% ratio that matches the same quarter a year earlier. Charge-offs came in at $1.48 billion, above both the author's forecast and Q1 2025. On that trajectory, he expects the year to finish near 2025's record $5.6 billion. Loan modifications reached $10.1 billion, the highest level since reporting on them began in 2016.
Modifications lead the charge-off line
The modification figure is the one that repays attention. Modifications are a lender's response to stress, not the stress itself. So they move before charge-offs do, and after the underwriting decision that created the exposure. An institution running modifications well above its peer group is saying something about its book roughly two quarters before the charge-off number does.
None of this is evenly spread. The share of the loan book in auto loans varies enormously by institution. A credit union with 60% of its loan book in vehicles is in a categorically different position from one at 20%. That holds in the same state, in the same quarter, behind the same national delinquency figure. The industry line is the average of those two, and it describes neither.
For anyone selling into this (collections platforms, loss-mitigation tooling, indirect-lending analytics, deposit funding), that unevenness is the whole opportunity. A rising national delinquency rate is not a sales trigger, because it is true for everyone at once. A trigger is an institution whose auto concentration and modification trend have moved against its peer group for two consecutive quarters.
Rank auto exposure and modification trends within peer group. A national figure is context. A move relative to peers is a reason to call.
Sources
Everything above is commentary on these. Read them first if the two disagree.