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http://ssrn.com/abstract=1491117
 
 

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How the Consumer Financial Protection Agency Act of 2009 Would Change the Law and Regulation of Consumer Financial Products


David S. Evans


University of Chicago Law School; University College London; Global Economics Group

Joshua D. Wright


Federal Trade Commission; George Mason University School of Law

October 19, 2009

Bloomberg Law Reports: Risk and Compliance, Vol. 2, No. 10, October 2009
George Mason Law & Economics Research Paper No. 09-51

Abstract:     
As part of its overhaul of financial services regulation the Obama Administration has proposed stronger protection of consumers of financial products and services. The Consumer Financial Protection Agency Act of 2009 (CFPA Act), which the Administration submitted to the U.S. Congress on June 30, 2009, would result in a sweeping overhaul of consumer financial protection. The CFPA Act would create a Consumer Financial Protection Agency (CFPA) which would assume the responsibility for enforcing most existing consumer financial protection laws from other federal banking regulators as well as the Federal Trade Commission. The CFPA would have significant additional powers to regulate consumer financial products, mandate disclosures, and require covered businesses to offer consumers "plain vanilla" products that the CFPA would design. The legislation would limit federal preemption of nationally chartered financial institutions by allowing states and localities to have stronger restrictions than those adopted by the CFPA and would add a new prohibition against "abusive" practices while allowing new interpretations of existing liability for unfair and deceptive practices. This article details how the CFPA Act would change consumer financial regulation, explores the policy rationale for these changes, and examines how the legislation, if enacted in its current form, would affect providers and consumers of financial products and services.

Number of Pages in PDF File: 12

Keywords: behavioral economics, borrowing, consumer protection, credit cards, Elizabeth Warren, FDIC, Federal Reserve Board, financial crisis, Michael Barr, National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, Oren Bar-Gill, Truth-in-Lending Act

JEL Classification: D11, D12, D18, E51, E53, E60, E62, G20, G28

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Date posted: October 20, 2009  

Suggested Citation

Evans, David S. and Wright, Joshua D., How the Consumer Financial Protection Agency Act of 2009 Would Change the Law and Regulation of Consumer Financial Products (October 19, 2009). Bloomberg Law Reports: Risk and Compliance, Vol. 2, No. 10, October 2009; George Mason Law & Economics Research Paper No. 09-51. Available at SSRN: http://ssrn.com/abstract=1491117

Contact Information

David S. Evans
University of Chicago Law School ( email )
1111 E. 60th St.
Chicago, IL 60637
United States
University College London ( email )
London WC1E OEG
United Kingdom
Global Economics Group ( email )
1400 S. Dearborn, Suite 400
Chicago, IL 60603
United States
Joshua D. Wright (Contact Author)
Federal Trade Commission ( email )
601 New Jersey Ave., NW
Washington, DC 20580
United States
George Mason University School of Law ( email )
3301 Fairfax Drive
Arlington, VA 22201
United States
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