- via WSJ
- The likes of Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C) aren't likely loaning thousands for a subprime borrower to buy a car. What they're doing more and more of, though, is lending billions to nonbank operators who will make that loan.
- Bank loans to nonbank financial firms are up six-fold since 2010 to $345B, according to the report.
- Proving they've learned little from the subprime mortgage crisis, banks say this new approach is less risky than lending directly to subprime customers.
- By far, Wells Fargo is the largest player in loans to nonbank lenders, with Citi, Bank of America (NYSE:BAC), and JPMorgan (NYSE:JPM) all about tied for second place. Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) are also sizable involved.
- And by the way, these nonbank lenders aren't necessarily Joe's Car Loans. One of the largest recipients is Exeter Finance - it's majority-owned by Blackstone (NYSE:BX).
- Now read: Where's The Dividend? (Hold The Onions)
Original article