AP Photo/Alan Diaz

Subprime auto loans are on the rise — with the same easy loans and quick defaults that marked America's mortgage market before the financial crisis, Bloomberg reports.

Why it matters: While no one suggests this will lead to another economic collapse – primarily because auto subprime remains much smaller than mortgage subprime – the financial risks are being spread out in a similar manner. Moreover, it shows consumers and bankers haven't learned from past mistakes.

Timeline:

  • 2009: $2.5 billion new subprime auto bonds were sold.
  • 2013: U.S. car sales began to soar.
  • 2016, $26 billion new subprime auto bonds were sold — more than the pre-crisis average.

How it happened: The partnership between Fiat Chrysler and Santander Bank has made them kings of the subprime auto market and has gotten Santander into some legal trouble. Bloomberg went through court documents and filings to find that Santander vetted incomes of borrowers fewer than once for every 10 loans, which were then packaged into $1 billion bonds. It's also easy for dealers to find ways to approve low-income borrowers for auto loans that are too much for them. On top of that, Wall Street rewards these risky activities.

Go deeper

Trump says he intends to give RNC speech on White House lawn

President Trump speaking to reporters on South Lawn in July. Photo: Jabin Botsford/The Washington Post via Getty Images

President Trump told the New York Post on Thursday that he plans to deliver his Republican National Convention speech from the White House lawn, despite bipartisan criticism of the optics and legality of the location.

Why it matters: Previous presidents avoided blurring staged campaign-style events — like party conventions — with official business of governing on the White House premises, per Politico.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 7 p.m. ET: 20,739,537 — Total deaths: 751,910— Total recoveries: 12,895,242Map.
  2. U.S.: Total confirmed cases as of 7 p.m. ET: 5,242,184 — Total deaths: 166,971 — Total recoveries: 1,755,225 — Total tests: 64,612,034Map.
  3. Politics: House Democrats to investigate scientist leading "Operation Warp Speed" vaccine projectMcConnell announces Senate will not hold votes until Sept. 8 unless stimulus deal is reached.
  4. 2020: Biden calls for 3-month national mask mandateBiden and Harris to receive coronavirus briefings 4 times a week.
  5. States: Georgia Gov. Brian Kemp to drop lawsuit over Atlanta's mask mandate.
  6. Business: Why the CARES Act makes 2020 the best year for companies to lose money.
  7. Public health: Fauci's guidance on pre-vaccine coronavirus treatments Cases are falling, but don't get too comfortable.

Fauci's guidance on pre-vaccine coronavirus treatments

Illustration: Aïda Amer/Axios

Antibody drugs and various medicine cocktails against the coronavirus are progressing and may provide some relief before vaccines.

The big picture: Everyone wants to know how and when they can return to "normal" life, as vaccines are not expected to be ready for most Americans for at least a year. Two therapies are known to be helpful, and more could be announced by late September, NIAID Director Anthony Fauci tells Axios.