The Financial Post reports in its Thursday, Oct. 23, edition that Moody's Investors Service sees trouble in bank auto lending. The Post's Barbara Shecter writes that auto lending has grown at a compounded annual rate of 20 per cent since 2007. Moody's says that growth has "significantly" outpaced the growth of even red-hot mortgages, credit cards and lines of credit. In seven years, vehicle loans jumped from $16.2-billion to $64-billion. Moody's analysts Jason Mercer and David Beattie warn that with household debt already at record levels, the concerted push into auto lending has exposed Canadian banks to the risks of soured loans and lower recovery rates in the event of a downturn. Mr. Mercer says, "If the economy takes a turn for the worst, we could see these loans becoming problematic for the banks." High unemployment rates in past severe recessions suggest there would be "a sharp increase" in soured loans. Mr. Mercer says, "We are in a much more vulnerable position." Mr. Mercer notes that some auto loans now extend for as long as eight years, up from a traditional three- to five-year horizon. More depreciation means there is less "collateral" to recover, putting the banks on the hook for higher losses.