Bifalgorithm post · IntroductionToBusiness OP 8D04gAa · 2026-10-07-36573 · Ethics Activity

Should you seek out subprime auto loans when their fees may not be justified?

Should you seek out subprime auto loans when their fees may not be justified? (IntroductionToBusiness OP 8D04gAa · 2026-10-07-36573 · Ethics Activity) — "Ethic…

Ideas in this flowchart

  • Ethical dilemma of pursuing subprime auto loans
  • The decision-maker is a loan officer at an auto-loan company.
  • The company specializes in auto loans.
  • The senior vice president sets new loan quotas for the group.
  • The vice president suggests seeking more subprime borrowers to meet the quotas.
  • The company claims higher rates, fees, and servicing costs are justified by greater loan risk.
  • The loans would generate larger commissions for the officer and the team.
  • Management presents the arrangement as beneficial to borrowers, the company, and employees.
  • The officer is uneasy about the company's focus on subprime borrowers.
  • Subprime borrowers generally have low incomes and poor or limited credit histories.
  • Many targeted borrowers are minorities, raising concerns about predatory lending or reverse redlining.
  • The officer believes the loan costs may reflect the profit extracted from borrowers rather than the actual risk.
  • The ethical question is whether to seek these loans despite believing the required fees may be unjustified.
  • The assignment requires researching subprime auto loans with a web search tool.
  • The responses must support the arguments and cite relevant sources.
  • Adam Tempkin, “Deep” Subprime Car Loans Hit Crisis-Era Milestone,” Bloomberg Markets, August 15, 2017.
  • Shannara Johnson, “Subprime Auto Loans Up, Car Sales Down: Why This Could Be Good for Gold,” Forbes, July 13, 2017.
  • Mark Huffman, “Santander Settles Subprime Auto Loan Suit with Massachusetts,” Consumer Affairs, March 31, 2017.
  • Michael Corkery and Jessica Silver-Greenberg, “Prosecutors Scrutinize Minority Borrowers’ Auto Loans,” The New York Times, March 30.
  • Decision path: seek subprime loans while charging the company's required fees.
  • Decision path: decline to seek the loans because the fees may be ethically unjustified.
Bifalgorithm
Sign up
Feed/

Should you seek out subprime auto loans when their fees may not be justified?

No cover

Channel

IntroductionToBusiness OP 8D04gAa · 2026-10-07-36573

1 page

seeduser
Ebook3w

"Ethics Activity You are a loan officer with a financial company that specializes in auto loans. The senior vice president in charge of your area sets new loan quotas for your group and suggests that courting more subprime borrowers would make the new quotas easier to meet. He reminds you that the company can justifiably charge higher interest rates, loan fees, and servicing costs for these higher-risk loans. He also points out that the loans will earn you and your team larger commissions as well. “Everyone wins,” he tells you. “We help people who might otherwise not be able to get the financing they need, the company makes money, and so do you.” But you are uneasy about the company’s focus on subprime borrowers, low-income applicants with poor or limited credit histories, many of whom are also minorities. You suspect the company’s tactics could be considered “predatory lending” or “reverse redlining.” You are also convinced that the cost of the company’s subprime loans aren’t tied to the increased risk factor at all, but to how much profit the company can squeeze from a group of unsophisticated borrowers with few other options. Using a web search tool, locate articles about the topic of subprime auto loans, and then write responses to the following questions. Be sure to support your arguments and cite your sources. Ethical Dilemma: Should you seek out subprime loans, knowing that you will have to charge borrowers the high fees your company demands, while believing they may not be totally justified? Sources: Adam Tempkin, “‘Deep’ Subprime Car Loans Hit Crisis-Era Milestone,” Bloomberg Markets, https://www.bloomberg.com, August 15, 2017; Shannara Johnson, “Subprime Auto Loans Up, Car Sales Down: Why This Could Be Good for Gold,” Forbes, https://www.forbes.com, July 13, 2017; Mark Huffman, “Santander Settles Subprime Auto Loan Suit with Massachusetts,” Consumer Affairs, https://www.consumeraffairs.com, March 31, 2017; Michael Corkery and Jessica Silver-Greenberg, “Prosecutors Scrutinize Minority Borrowers’ Auto Loans,” The New York Times, https://www.nytimes.com, March 30,"

Flowchart preview
👍
0
0 comments0 shares

Sign in to view and post comments.