Another Auto Loan Firm Reports Loss

Reliance Acceptance Group Inc. said it would report a fourth-quarter loss because of problem loans, the latest auto loan company to run into financial trouble. Reliance, like other lenders to car buyers with troubled credit histories, will set aside a “significant provision” for lending losses when it reports earnings about Friday, resulting in a loss for the quarter. Even so, the San Antonio-based company said it will report a profit for all of 1996 and has a cushion of $100 million in capital because of the recently completed spinoff of its Cole Taylor Bank unit. The so-called subprime auto loan industry has been in crisis since late last month, when Mercury Finance Co. revealed it had overstated earnings for the last four years. Another competitor, Jayhawk Acceptance Corp., subsequently filed for Chapter 11 Bankruptcy Court protection after it lost lines of credit. Reliance this week changed its name from Cole Taylor Financial Group Inc.