Washington State Employees’ Credit Union (WSECU) ended its sub-prime loan origination department last week. While the move was not completely surprising, what is more interesting is that Wachovia (who was backing the subprime auto loans for WSECU) is still doing business as usual.

WSECU had been tapping into the secondary market very strongly. It is probably because of their over aggressive lending practices that they had to close the door on that department at this time. Unfortunately, many people who qualified for WSECU’s subprime auto loans will now only qualify for higher interest rates on loans that need higher down payments.