BIRMINGHAM, Ala. — About 2,600 dealers were recently impacted when Regions announced late last week that it will no longer support indirect auto loans, a company spokesperson explained to SubPrime Auto Finance News.

As of Thursday, Regions has halted acceptance of auto loan applications from dealers, said Mel Campbell, a company spokesperson.

Even though some companies are struggling during these economic times, Campbell said that is not the reason for this move. It was not due to an uptick in losses in the auto portfolio or other divisions, he said, although the company does offer mortgages.

"Indirect auto lending is not a part of our core business. We've got 2,000 branches scattered across 16 states. So basically we will be leveraging our branch system for consumers interested in obtaining a car loan," he explained.

Campbell indicated that the auto loan business is only a small part of the company.

"This was strictly a business decision. We've had long-term relationships with many of these dealers. We wish them the best in the future," he said.

With $114 billion in assets, Regions is a full-service provider of consumer and commercial banking, trust, securities brokerage, mortgage and insurance products, in addition to services.

Region covers 16 states throughout the South, Midwest and Texas.

Discussing overall second-quarter company results earlier this year, Dowd Ritter, chairman, president and chief executive officer, said, "Credit quality deterioration is today's overriding issue for financial services companies, and Regions is not immune.

"While we are prudently managing our credit risk and taking steps to strengthen our capital position, we are also focusing on growing revenue and managing costs to maintain a strong foundation for long-term growth and profitability," he added.