Truist Exits Near-Prime Auto Lending Under New CEO

Truist Financial is stepping away from near-prime auto lending, selling the loans held by Regional Acceptance Corp., the subsidiary that has handled that business. The move arrives as Michael Lyons, the bank's new chief executive, begins putting his own strategy in place.

Near-prime auto loans sit between prime and subprime in credit quality. They typically carry higher yields than top-tier paper but also produce more losses when borrowers struggle, which makes them sensitive to the economic cycle. Regional Acceptance gave Truist a dedicated channel into that segment.

The sale is the clearest sign so far of the direction Lyons intends to take. According to the report, it may not be the last such exit, with other businesses potentially facing similar reviews as the bank reallocates resources. Details such as the buyer and the size of the transaction were not disclosed.

For Truist, the shift implies a narrower set of priorities and a balance sheet tilted toward lower-risk assets. Whether that trade-off costs revenue growth is the question investors are likely to press in coming quarters. The company has not indicated how it will redeploy the capital freed up by the sale.