The silver lining here is that tightening lending criteria will help to ensure that there won’t be another foreclosure boom.  Look for the next financing bubble in the auto loan sector.  Recent figures from private data sources show that about 1 in 4 new car purchases were financed by subprime loans.

While the increase in loans to high-risk borrowers has boosted sales, government regulators worry that it’s not sustainable.  The Dodd-Frank legislation which created the CFPB specifically carved out an exclusion for auto dealers, effectively exempting them from government scrutiny.