The mortgage industry set the stage for the recession by luring people into ruinously priced loans they could never hope to repay, then selling those loans to Wall Street in mortgage-backed securities that went bad. The federal government has since tamed that industry, outlawing most of the risky and deceptive practices that led to that crisis. It must now do the same with the auto lending industry, where the practice of roping people into loans that damage them financially is all too common.

Predatory loans arranged by unscrupulous auto dealers have long been a source of hardship for low-income consumers who can least afford them. But the problem has worsened since major banks entered the picture and began buying up car loans to package them in securities sold to pension funds, insurance companies and others. Banks that are scrambling to buy such loans have sometimes formed alliances with unscrupulous dealers, including one who was indicted on grand larceny charges that he defrauded two dozen buyers.

Dealers who can offload loans to banks before the loans fail take the same rapacious approach that mortgage lenders took in the run-up to the recession. They prey on less sophisticated borrowers, falsifying the borrower’s income information and writing loans with astronomical interest rates and hidden fees that deliver a quick profit to the dealers.

One of the more egregious tactics is the “yo-yo,” in which the buyer drives away believing that the deal has been closed, only to be summoned back days or weeks later and told that original deal has fallen through and that he or she must either surrender the car or accept a higher interest rate and terms that are much less advantageous. Borrowers who desperately need cars to get to work or to convey ailing parents back and forth to the doctor often feel that they have no choice and end up signing on the dotted line.