Friday, July 20, 2012

Credit where credit is due

Many complaints are heard about lack of credit availability for mortgages, small business loans, and credit cards, but one area where lending is taking place; auto sales;

...there's one notable exception, an area where lending has been surging: autos. Millions of Americans have found that it's becoming surprisingly easy to borrow money to buy a car.
New bank loans for autos totaled $47.5 billion in the first quarter of 2012, higher than at any point in the past seven years, according to Equifax. Interest rates are getting cheaper by the month. And even Americans with relatively poor finances can get auto loans....
Why might that be?
The auto loan market, which involves many smaller independent operators, remains lightly regulated. The CFPB has not yet stated any plans to oversee nonbank lenders in auto finance. And car dealerships, which frequently offer credit, were explicitly exempt from oversight in the 2010 Dodd-Frank financial regulation bill. 
 Which would seem to be evidence that regulation is hindering some areas of the economy.

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