Banks find new way to stay in subprime-lending biz

(CNBC) — Big Wall Street banks have found a way to continue funneling money to high-risk borrowers — by lending to other institutions who make the so-called subprime loans.

Wells Fargo, Citigroup and others pushed $345 billion to nonbank lenders, sometimes called “shadow banks,” from 2010 to 2017, according to a Wall Street Journal analysis published Tuesday.

Since the financial crisis, banks have gotten out of the subprime business as regulators have pushed for institutions to lower their risk profiles. One way to continue in the business has been by serving as a third party to the loans.



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