Takeaways from Consumer Protection Conference
Watch economists with the Federal Reserve Bank of Cleveland discuss their takeaways from the September 11, 2009, seminar on consumer protection.
Stephan Whitaker on the need for new approaches to consumer protection:
The recent crisis has revealed a couple of major gaps in consumer protections. One of them is that a lot of consumer protections in the past focused on access. We were really concerned about making sure that people could get consumer credit if they needed it, or get mortgages. And there wasn’t so much attention paid to making sure that they didn’t get into a product that would cause them a financial hardship in a matter of months or years. So now we need to rethink what we’re doing and adjust it for the new realities.
Daniel Littman on the search for consumer protection tools beyond disclosures:
A mixture of tools probably needs to be used because disclosures aren’t enough to keep people from products that are not suitable for them or products offered to them involving fraud. There probably needs to be some mixture of compulsion that keeps certain kinds of products off the market or that targets products to the right kinds of people--along with better disclosures.
Thomas Fitzpatrick on the challenge of improving disclosures in mortgage contracts:
I think there’s a lot of room for improvement there. It’s commonly said that disclosures are written by lawyers for lawyers. And as a lawyer, I can tell you that they’re really not written for us, either. They’re very, very complicated.