In the wake of U.S. interest rates rising after the Federal Reserve began to ratchet up key rates incrementally in late 2016, several of BMO Harris' competitors have reduced auto-loan volume or moved upward from the riskier end of the credit pool.
That creates some space outside prime for BMO Harris, Harter indicated. The Chicago bank now is interested in new-vehicle creditworthy customers with smaller down payments than it previously would have accepted, for example.
And because it has noticed that modern automobile quality is better and vehicles remain reliable longer, BMO Harris is willing to write loans on higher-mileage used vehicles.
The bank's auto-loan portfolio remains roughly half new and half used, but Harter would like to expand on the used side, "as long as it remains balanced."
Harter is enthusiastic about continuing and expanding cooperation with BMO Harris Commercial Bank's auto retailing arm, which finances dealership floorplans under Managing Director Ghram Debes, head of dealership finance.
The two divisions help each other, share information and leads and, whenever possible, arrange for auto lending and commercial representatives to meet jointly with dealers principal, Harter said.
"It's a competitive advantage," he said. "Not a lot of banks are still strong in commercial floorplanning."
BMO Harris is a regional bank, concentrated primarily in Wisconsin and Illinois and strong in Indiana, Minnesota, Kansas, Missouri, Arizona and Florida, but it makes auto loans in 25 states overall.
The BMO Harris Dealership Finance team has offices in Chicago; Milwaukee; Minneapolis; Indianapolis; Tampa, Fla.; Kansas City, Mo.; St. Louis; and Joliet, Ill. It has opened an office in Boston and plans to expand further, spokesman Patrick O'Herlihy said.
As Debes expands the auto dealership financing infrastructure into new areas in California and along the East Coast, Harter says his staff is building retail auto lending there as well.
"We're already adding California dealers," he said. The BMO Harris network of 2,200 dealerships is increasing, he added.