Credit quality might still be squeaky clean at many of the large traditional banks, but it's deteriorating much faster at Ally Financial (NYSE: ALLY), a large consumer digital bank that specializes in auto lending. Loan losses and delinquencies -- which have been extremely low thanks to pandemic stimulus and built-up savings -- began surging higher in the third quarter faster than some might have expected.

Ally received a big endorsement this year when Warren Buffett's Berkshire Hathaway opened a position in the first quarter and then bought more in the second quarter. Ally is a relatively small stake in Berkshire's massive equities portfolio, but the conglomerate now owns close to 10% of Ally's outstanding shares.

With credit now weakening and a recession on the horizon, did Buffett and Berkshire make a mistake? 

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Source Fool.com