 alternative financial services in the united states refers to a particular type of financial service, namely sub-prime lending (that is lending to people with relatively poor credit) by non-bank financial institutions. this branch of the financial services industry is more extensive in the united states than in some other countries, because the major banks in the u.s. are less willing to lend to people with marginal credit ratings than their counterparts in many other countries. examples of these companies include american general finance, inc.,duvera financial, inc., lendmark financial services, inc., hsbc finance, cit, citifinancial, wells fargo financial, and monterey financial services, inc. the more generic name "consumer finance" is also used, although more properly the term applies to financing for any type of consumer. ==the term as used in the united states== the consumer finance industry (meaning branch-based subprime lenders) mainly came to fruition in the middle of the twentieth century. at that time, these companies were all stand-alone companies not owned by banks and an alternative to banks. however, at that time, the companies were not focused on subprime lending. instead, they attempted to lend to everyone who would accept their high rates of interest. there were many reasons why certain people would: *banks made it difficult to obtain personal credit. banks did not have the wide variety of programs or aggressive marketing that they do today. *many people simply didn't like to deal with bank employees and branches, preferring the more relaxed environment of a consumer finance company. *consumer finance companies focused on lowering the required monthly payment for their customer's debts. many customers would gladly refinance $10,000.00 worth of auto loan debt at 7 percent interest in a home equity loan at 18 percent interest because the auto loan would have to be paid off in 5 years while the home equity loan would have a 20 year repayment plan, making the required monthly payments for the customer lower (even though overall, the customer would end up paying dramatically more). besides charging a higher interest rate to compensate for their risk, consumer finance companies are usually able to operate successfully because their employees are given more flexibility in structuring loans and in collections than banks. consumer finance companies may also require far less contingent liabilities than banks. ==controversial practices of the united states consumer finance industry== the more dubious consumer finance companies are known to engage in the following practices: *failing to tell people who ask for a loan from the lender that they really have good credit and can get a better deal somewhere else (a subprime loan is usually more expensive than a pr
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