Wells Fargo to cap subprime auto loans


Wells Fargo, the country’s fourth-largest bank, reportedly plans to impose a cap on auto loans for customers with bad credit — a move that comes amid a new boom in subprime lending.

That’s according to a report from The New York Times, which cites anonymous Wells Fargo executives saying the bank will put in place a new cap to keep the volume of its subprime auto loans at or below 10% of its nearly $30 million automotive loan business.

The Times added that Wells Fargo [fortune-stock symbol=”WFC”], which has a reputation in the banking industry for prudent risk management, could serve as a bellwether in an industry currently experiencing a boom in subprime lending that has been driven, in part, by an increase in subprime auto loans. The current boom comes less than a decade after the implosion of the subprime mortgage lending market in the lead up to…

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