Cities as a Source of Consumers’ Financial Empowerment
34 Emory Bankruptcy Developments J. 388-409 (2018)
24 Pages Posted: 21 Jun 2018
Date Written: June 21, 2018
Although cities are a poor place to situate consumer protection regulation, especially “top down” efforts to “command and control” lending decisions, they are an especially good source of consumer “empowerment” initiatives. Consumer empowerment might take the form of debt advice or education initiatives. Empowerment might also occur by enabling consumers to register complaints about lenders or other financial service providers’ conduct. It might involve financial inclusion initiatives to encourage banks and other institutions to provide financial services that are affordable and convenient to consumer residents, and non-predatory. These sorts of empowerment initiatives assist in resolving a range of credit market failures by enhancing consumers’ abilities to make financial decisions rather than restricting lenders’ conduct in lending markets.
Cities are a superior location for providing financial empowerment programs for three reasons. First, cities enjoy greater proximity to consumer constituents than state or federal government actors, and in greater concentrations. Second, cities are used to working pragmatically in tandem with private and nonprofit actors. These partnerships are often the keys to successfully empowering consumers’ financial decisionmaking because the success of empowerment initiatives often depends on garnering the trust and confidence of the participants. Third, cities’ existing municipal infrastructures provide important programmatic advantages.
Close examination of cities’ provision of consumer empowerment services highlights the extent to which empowerment strategies can and should be relied on to protect consumers in their financial decision-making. It also enables greater focus on cities’ strengths as a source of consumer financial protection more generally. Finally, through this examination it is possible to understand how cities might “teach” federal and state actors to better regulate and enforce regulations with an eye on the “local.”
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