Subprime Auto Loan Default Rates Are Now Higher Than During The Financial Crisis



Posted by Ed 8 mths ago
One month ago, when discussing the most recent trends in the US subprime auto loan space, we revealed how despite a virtual halt in direct loans by depositor banks to subprime clients following the financial crisis, the US banking sector now has over a third of a trillion dollars in indirect subprime exposure, in the form of loans to nonbanks financial firms which in the past decade have become the most aggressive lenders to America's sub-620 FICO population.

As we further explained, the banks' total indirect exposure to subprime loans – not just auto loans, but also subprime mortgages, and subprime consumer loans – could be pieced together through public filings, and according to FDIC reports, bank loans to nonbanks subprime lenders soared this decade, with the following 5 names standing out:

Wells Fargo: $81 billion, up from $13.4 billion in 2010
Citigroup: $30 billion, up from $4.1 billion in 2010
Bank of America: $30 billion, up from $2.8 billion in 2010
JP Morgan: $28 billion, up from $10.4 billion in 2010
Goldman Sachs: $22 billion
Morgan Stanley: $16 billion


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