by Jeff Sovern Hensarling calls the bill the Financial Choice Act. Make America Great for Banks Act is closer to the truth. Based on a quick look, the bill would give bank lobbyists power over the CFPB by subjecting it to the appropriations process, increase the likelihood of deadlocks by turning the Bureau into a commission, […]
Category Archives: Predatory Lending
by Jeff Sovern Yesterday the House Appropriations Committee reported out a bill that would convert the Bureau to a commission, subject it to the congressional appropriations process, and delay (perhaps forever) the adoption of the arbitration and payday lending rules. More information on the Committee's web site.
In the Times's DealBook. Excerpt: Conservative lawyers have been muttering about the constitutionality of the Consumer Financial Protection Bureau for years, but their best argument is pretty novel. It is a “death by a thousand cuts” separation of powers claim. The idea is that if you count up all the ways that the Consumer Financial […]
by Jeff Sovern Critics of consumer protection regulation routinely assert that such regulation reduces access to credit and increases consumer costs. For example, here is what Todd Zywicki wrote in his recent testimony before the Senate Banking Committee (footnote omitted): By imposing a regulatory regime that substitutes the judgment of bureaucrats for consumer decisions, Dodd-Frank […]
by Jeff Sovern On April 5, the Senate Banking Committee held a hearing titled Assessing the Effects of Consumer Finance Regulations. I've been listening to the hearing, which has three witnesses–selected by the GOP majority–who spent much of their time attacking the CFPB, and one witness- chosen by the Democratic minority– who supported the CFPB. […]
Jim Hawkins of Houston has written Are Bigger Companies Better for Low-Income Borrowers?: Evidence from Payday and Title Loan Advertisements, Forthcoming in the Journal of Law, Economics and Policy. Here is the abstract: Payday lending and title lending markets are dominated by a small number of large lenders. Recent policy intervention into these markets in […]
Jacob Hale Russell of Stanford has written Misbehavioral Law and Economics: Separating and Pooling in Responses to Consumer Financial Mistakes. Here is the abstract: Consumers’ choices in financial contracts do not always tell us what they really want. Put differently, revealed preferences are sometimes unreliable indicators of actual preferences. For instance, consider two consumers who […]
Scott blogged earlier today about the pending vote to delay protections. Here's Ed Mierzwinski's HuffPo post, House Launches Attack on Servicemember Lending Protections, and Chris Morran of Consumerist weighs in with Congress May Delay Predatory Lending Protection For Military Personnel. Update: the Times' Brent Staples adds "The offending legislation, now before the House Armed Services Committee, deserves to […]
by Jeff Sovern I just finished listening to the audio version of Barney Frank's autobiography, Frank: A Life in Politics from the Great Society to Same-Sex Marriage, which Frank reads himself. I listened to it to learn more about consumer law–Frank was so involved in creating the CFPB that the statute doing so carries his […]
Jason Scott Johnston of Virginia has written Do Product Bans Help Consumers? Questioning the Economic Foundations of Dodd-Frank Mortgage Regulation. Here is the abstract: The system of residential mortgage contact regulation enacted by the 2010 Dodd Frank Wall Street Reform and Consumer Protection Act of 2010 has been justified as necessary to prevent lenders from […]