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Speaker 1: Now it's time for our daily Bloomberg Law Brief, exploring

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Speaker 1: legal issues in the news and Today, Bloomberg Law host

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Speaker 1: During Grosso and Michael Best discussed the increasing number of

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Speaker 1: US auto loan defaults and the chances it could turn

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Speaker 1: into another sub prime loan crisis. They speak with Patricia McCoy, your,

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Speaker 1: professor at Boston College Law School, and Gary Peoples, a

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Speaker 1: professor at Syracuse University College of Law. Patricia, subprime car

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Speaker 1: loans have been around for a long time. Explain what's

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Speaker 1: been happening in the last eight years or so. Well,

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Speaker 1: they certainly have been around, and in the last last

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Speaker 1: eight years, UH Auto Lending UM became the new growth

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Speaker 1: area for subprime loans. UH mortgage lenders are basically not

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Speaker 1: willing to make subprime loans anymore, but UM car dealers

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Speaker 1: were very eager to expand their markets by selling cars

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Speaker 1: to weaker and weaker borrowers and lenders stepped in willing

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Speaker 1: to make loans to people who might have difficulty paying

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Speaker 1: back the purchase price as the car. Gary, are there

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Speaker 1: any legal restrictions here in terms of who can get

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Speaker 1: these kinds of loans when they buy a car, or

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Speaker 1: is it kind of a free for all. It's it's

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Speaker 1: pretty much a free for all. One of the interesting

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Speaker 1: things about god Frank is the one area that was

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Speaker 1: left out of regulation were auto dealers. And auto dealers

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Speaker 1: finance the vast majority of auto loans and then of

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Speaker 1: course sell them uh to to finance companies, and they

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Speaker 1: are specifically excluded from regulation and the god Frank so

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Speaker 1: your regulation would be looking at would then be up

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Speaker 1: to the state. And I, you know, I practiced in

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Speaker 1: New York and even the general New York Usury Statute

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Speaker 1: doesn't apply to most auto loans. Patricia, the name of

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Speaker 1: your book is the subprime viru is so with the

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Speaker 1: auto loans, where do we see the virus or the

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Speaker 1: cracks in the system. What's really interesting is we're seeing

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Speaker 1: a replay of the mortgage crisis in terms of the

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Speaker 1: dealers don't check whether the borrowers can uh have the

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Speaker 1: ability to repay. The lender makes the loan without checking

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Speaker 1: it in most cases here Santan Dare, and then the

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Speaker 1: lender sells on the loans, packages them for sale to

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Speaker 1: Wall Street. Investors are not checking and are buying this

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Speaker 1: stuff regardless of the elevated default risk. And as Patricia McCoy,

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Speaker 1: your professor at Boston College Law School, and Gary People

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Speaker 1: as a professor at Syracuse University College of Law, speaking

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Speaker 1: with Bloomberg Law host During Rosso and Michael Best. You

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Speaker 1: can listen to Bloomberg Law weekdays at one pm Wall

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Speaker 1: Street Time here on Bloomberg Radio Now. Among some of

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Speaker 1: the top legal stories from Bloomberg Law, the American Civil

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Speaker 1: Union has struck out in an attempt to open up

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Speaker 1: President Trump's election Commission. Federal judge has denied the a

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Speaker 1: c l US request for election Commission documents. The judge

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Speaker 1: also denied in person access to the commission's meeting today.

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Speaker 1: The a c l U claims the election panel violates

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Speaker 1: federal transparency and public access requirements, and as this morning's

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Speaker 1: Bloomberg lawbry if you can find more legal news at

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Speaker 1: Bloomberg Law dot com and Bloomberg na dot com. Attorneys

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Speaker 1: will find exceptional legal research and business development tools there

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Speaker 1: as well. Visit Bloomberg Law dot com and Bloomberg BNA

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Speaker 1: dot com for more information