Wells Fargo & Co. and Citigroup Inc. are unlikely to make a $14,000 auto loan to a borrower with a subprime credit score as that is now the domain of direct lenders such as Exeter Finance LLC, based in Irving, Texas. But Wells Fargo and Citigroup have helped lend Exeter $1.4 billion for that very purpose, according to a Wall Street Journal analysis. Bank loans to Exeter and other nonbank financial firms have increased sixfold between 2010 and 2017 to a record high of nearly $345 billion, according to the WSJ's analysis of regulatory filings. They are now one of the largest categories of bank loans to companies. Banks say that their new approach of lending to the nonbank lenders is safer than dealing directly with consumers with bad credit and companies with shaky balance sheets.
