Keywords

consumer finance, financial regulation, payday lending

Abstract

The recent financial crisis has led many to question how well businesses deliver consumer financial services and how well regulatory institutions address problems in consumer financial markets. In response, the Obama administration has proposed creating a new Consumer Financial Protection Agency. Other regulatory reforms have been advanced, and in some cases adopted, in recent years, at both the federal and state level. In this paper, we provide an overview of consumer financial markets, detailing the purposes they serve, the extent to which they suffer from market failures or other deficiencies, and how they are currently regulated. To illustrate our analytical framework, we present a case study on payday lending. We conclude with a series of observations on the limits of government intervention, suggestions about how to measure whether government intervention is successful and potentially fruitful lines of future research and data collection.

Original Publication Citation

“The Regulation of Consumer Financial Products: An Introductory Essay with a Case Study on Payday Lending.” 2010. In Nicholas P. Retsinas and Eric Belsky, editors, Moving Forward: The Future of Consumer Credit and Mortgage Finance, Washington DC: Brookings Institution Press and the Harvard University Joint Center for Housing Studies, pp. 206-244 (with John Y. Campbell, Howell E. Jackson and Peter Tufano).

Document Type

Peer-Reviewed Article

Publication Date

2010

Publisher

Washington DC: Brookings Institution Press and the Harvard University Joint Center for Housing Studies

Language

English

College

Marriott School of Business

Department

Finance

University Standing at Time of Publication

Full Professor

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