The Consumer Financial Protection Bureau: Financial Regulation for the Twenty-First Century

37 Pages Posted: 16 Jul 2016

See all articles by Len Kennedy

Len Kennedy


Patricia A. McCoy

Boston College Law School

Ethan Bernstein

Harvard Business School - Organizational Behavior

Date Written: December 27, 2011


After existing regulatory systems failed to prevent the 2008 financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, a sweeping reform designed to alleviate the crisis and prevent its recurrence. Out of this Act, the Consumer Financial Protection Bureau was born. This new agency was charged with making markets for consumer financial products and services work for Americans, a task that was previously spread out among seven different federal agencies with varying priorities. This Article describes, with a series of concrete case studies, four key principles that have guided the Bureau as it strives to fulfill Congress's mandate. First, the Bureau has taken a market-based approach that reflects its belief in the power of markets and competition to produce increasingly better outcomes for consumers and responsible providers alike. Second, recognizing that understanding a market well is essential to effective regulation, the Bureau has relied on evidence-based analysis to inform all of its activities. Third, the Bureau has complemented its empirical analysis with input from all segments of the public-including consumers, advocates, and regulated entities. To facilitate the kind of robust public participation that will make for more effective regulation, the Bureau has employed innovative technologies and strong transparency policies. Finally, the Bureau has studied and learned from historic regulatory experiences and has adopted best practices from the public and private sectors. These four principles, and others which cascade from them, define the Bureau's twenty-first century approach to promoting a well-functioning market for consumer financial services and effective consumer protection.

Keywords: Consumer Financial Protection Bureau, consumer financial protection, evidence-based regulation

JEL Classification: G21, G28, H31, K23, L50, R28

Suggested Citation

Kennedy, Len and McCoy, Patricia Ann and Bernstein, Ethan S, The Consumer Financial Protection Bureau: Financial Regulation for the Twenty-First Century (December 27, 2011). Cornell Law Review, Vol. 97, No. 5, 2012, Available at SSRN:

Len Kennedy


Patricia Ann McCoy (Contact Author)

Boston College Law School ( email )

885 Centre Street
Newton, MA 02459-1163
United States

Ethan S Bernstein

Harvard Business School - Organizational Behavior ( email )

Soldiers Field
Boston, MA 02163
United States
6174964626 (Phone)


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