When is it appropriate for a government agency to spell out the type of products that appear in the marketplace? The upcoming rulemakings on the CFPB seem destined to pit consumer advocates against banks, and the preference among lawmakers for either “suitability” or “choice” will probably provoke much of the contention.

Although the Dodd-Frank bill established the CFPB, much remains to be done to determine what it will mean. From its initial conceptualization, the CFPB has promised to revitalize the power of consumer disclosures.  Elizabeth Warren spoke at the Consumer Federation of America’s annual conference in Washington, DC this morning and she reiterated her faith in the power of disclosure to protect the public. At once excited but simultaneously weary, she made an effort to emphasize that she believes that most Americans will appreciate the results of the new bureau once they can see its benefits.

“Do you hear people saying that the Consumer Product Safety Commission should do less to protect the safety of infants in their (more…)

The plain vanilla mortgage, once a stunning bit of common sense that has emerged in a sea of financial obfuscation, is now a policy proposal of the past.

Barney Frank dropped the Obama Administration’s plain vanilla language in the Consumer Financial Protection Act Tuesday.

Many writers, approaching this issue from a behavioral economics perspective, saw a lot of merit to this idea.  Richard Thaler, who studies how people make financial decisions, called it “mortgages made easy.”The logic of his viewpoints are neatly expressed in this (more…)