A decade after the mortgage crisis financial companies continue to extend risky loans at high interest rates, bundling those loans into securities to sell to eager Wall Street investors, and booking big profits and revenues. This is today’s subprime auto lending business and regulators and attorneys general in multiple states are taking note. The industry is worth more than $26 billion and growing fast, and it poses a threat to low-income consumers who need transportation to remain in the labor market. Its aggressive lending and collections practices have the potential to impact the economic well-being of millions of families.
First among subprime auto lenders is Santander Consumer USA, a Dallas-based subsidiary of the Spanish global banking giant Santander Group. Santander has spent the years since the Great Recession purchasing debt in the subprime auto lending market and now controls nearly a third of this lucrative market.