Explosion in Sub-Prime Auto Lending
The Fed has contributed to the explosion of sub-prime lending due to their activities.
Sub-prime lending encompasses “customers with an average credit score of 556 and average annual income of $38,393, according to the pitch book. These borrowers pay an average interest rate of 21.4 percent a year. (Median U.S. household income was an inflation-adjusted $50,054 in 2011, according to the Census Bureau. On the widely used FICO credit-scoring scale, produced by Fair Isaac Corp, 640 or less is considered subprime.)” Read more at: http://www.reuters.com/article/2013/04/03/us-usa-qe3-subprimeauto-special-report-idUSBRE9320ES20130403