One of Europe’s largest multinational commercial banks, Madrid-based Banco Santander, has a speciality: selling auto loans to people with low incomes or those who can’t afford down payments. Now, the bank is ramping up sales of these subprime auto loans in Texas – a state with the highest amount of outstanding auto loans in the country – through its subsidiary Santander Consumer USA.
Columnist Mitchell Schnurman has been reporting on this for The Dallas Morning News. He says Santander’s lending is an extreme example of a much larger issue. Nonetheless, he says the number of Santander loans is likely to grow in Texas despite the fact that almost 1 in 5 Santander auto loans defaults each year.
“When you’re growing by 11%, you’re certainly not pulling back,” Schnurman says. “They insist that they’re really committed to protecting consumers now, but I think we’ve got to wait and see whether we really buy that or not.”
What you’ll hear in this segment:
– How the number of Texans who’ve defaulted on auto loans is growing
– Why the CEO of Santander doesn’t see a problem with the company’s current lending practices
– Whether the rate of defaults on these subprime auto loans indicates a larger economic problem
Written by Savana Dunning.
