The Changing Meaning of "Subprime"

Simon Winchester reports:

when first applied to financial matters in 1976, “subprime” meant a loan offered below the prime rate and typically was offered only to the most desirable borrowers.

In was not until 1993 that it took on a much less enticing guise, with Business Wire referring to a company that “buys subprime loans made ... to creditworthy buyers unable to qualify for loans from banks.” And an O.E.D. editor was moved to write a new definition: “Of or designating a loan, typically having relatively unfavorable terms, made to a borrower who does not qualify for other loans because of a poor credit history.”