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The Editors

Where Dodd-Frank Didn't Go Far Enough

An exemption for auto lenders has led to a dangerous bubble.
Would you like a loan with that?

Would you like a loan with that?

Photographer: Tim Boyle/Getty Images

There are undoubtedly some areas where the Dodd-Frank financial reform went too far. But as the Trump administration and Republican legislators look for what they can roll back, they should keep in mind one area where it didn’t go far enough: auto lending.

Back in 2010, when Congress adopted rules designed to limit the lending excesses that contributed to the 2008 financial crisis, auto dealers managed to carve out an exemption for themselves. As a result, their behavior since then offers a sort of counterfactual: How might lenders have acted if Dodd-Frank had never happened?