House of NextCard Collapses

Neither a subprime borrower nor a subprime lender be.

One business that benefited massively during the roaring '90s was lending at high interest rates to people with weak credit histories. However, that activity, known as subprime lending, is now collapsing, as the economy slows, job losses mount and bank regulators toughen up.

Consumer lender NextCard (NXCD Quote) blew up Wednesday after scrutiny from federal watchdogs. In recent weeks, mobile home lender Conseco and credit card company Providian(PVN Quote) have revealed numbers that show dire outlooks. Fearing similar problems at auto lender AmeriCredit and credit card lender Metris, investors have rushed to dump both names. ...