Is 'subprime' a substandard label?

Donna Harris covers retail issues for Automotive News
At the recent annual meeting of the National Automotive Finance Association, there was talk of calling subprime lenders "high-yield" lenders instead.

NAFA is the trade group representing lenders that finance the subprime segment, generally people with credit scores below 620. Some of the association's leaders think high-yield just sounds better than subprime.

I guess that depends on your point of view.

If I'm a lender, "high-yield" makes me sound stable and profitable. That's an image I'd like to cultivate coming out of a credit crisis.

If I'm a consumer with substandard credit, "high-yield" more likely suggests just how much money a lender is making at my expense. I know I'm going to pay higher financing rates, but do you have to rub my face in it?

As a journalist, I think of "subprime" as a neutral term. It describes below-prime credit risks, just as "subzero" refers to below-zero temperatures.

What do I really think of "high-yield"?

Well, let's just say it's not exactly customer-friendly.