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Scott Jacobs/AP

Some on Wall Street are worried that subprime auto lenders like Credit Acceptance Corp, Ally Financial, and Santander will soon be in trouble, given reports that a rising share of borrowers with low credit scores are delinquent on their loans.

Auto lenders are behaving similarly to mortgage lenders in the run-up to the 2008 financial crash, but experts say we are not headed into another crisis (more below).

Why it's still cause for worry: Lenders are making fat profits, but there is growing evidence that a significant minority are engaging in fraudulent behavior. Borrowers in many cases have little choice but to pay such high rates if they want to be able to commute to work.

The case for concern:

  • It's a growing problem: One trend that has propped up this market is lengthening American commute times. As housing affordability in America's economic centers grows worse, the working poor and middle class are being pushed further away from city centers and reliable public transportation.
  • What to do about it: Two options are incentives to build more affordable housing and investing more in public transportation.

The case against concern:

  • It's actually pretty difficult for a lender to lose money on many of these subprime loans. The interest rates are high, typically in the low teens, but can rise as high as 29%. These payments cushion losses for lenders.
  • The auto-lending market is much smaller than the mortgage market. According to Experian, the total size of subprime auto loan debt outstanding is roughly $173 billion. By comparison, in 2006 alone, mortgage lenders made more than $600 billion in new loans.
  • Cars are easy to repossess, while homes are notoriously difficult, meaning auto lenders lose less money after a default.

Go deeper

Mike Allen, author of AM
16 mins ago - Politics & Policy

America's "Friendscape" crisis

New research shows Americans have fewer friends than in the past, and are less likely to have a best friend.

  • Why it matters: At a time of excruciating mental and societal stress, this is another sign we're breaking apart. And the friendship drought could get worse with more people working remotely or hybrid-ly.

Pelosi says it's her "plan" to appoint GOP Rep. Kinzinger to Jan. 6 committee

House Speaker Nancy Pelosi (D-Calif.) said Sunday that it is her "plan" to appoint Rep. Adam Kinzinger (R-Ill.) to the House select committee investigating the deadly Jan 6. Capitol riots.

Why it matters: Pelosi's statement to ABC's "This Week" comes after she rejected two of the five Republican appointments offered by House Minority Leader Kevin McCarthy (R-Calif.).

Updated 3 hours ago - Sports

Olympics dashboard

⛳️: Golfer Bryson DeChambeau will miss Olympics after testing positive for COVID

📺: The Olympic events to watch today

🏊: Athlete spotlight — When to watch swimming star Katie Ledecky

🏀: U.S. Men's basketball suffers first Olympic loss since 2004

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🚨: Heat wave brings scorching temperatures to Tokyo Olympics

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Go deeper: Full Axios coverage