Consumer Law

Dozens of Law Professors Join Letter Supporting Creation of the Consumer Protection Financial Agency

By Jeff Sovern

by Jeff Sovern

74 law professors teaching in areas related to consumer and banking law have joined in a letter supporting creation of the Consumer Financial Protection Agency.  The professors, who teach at law schools in 28 states and the District of Columbia, are legal experts who do not have an economic stake in creation of the CFPA but support the agency because they believe it would be better for the country than the current regulatory system. 

The principal drafter of the letter was Professor Norman Silber; I contributed, Profesors Charles B. Shafer, Teresa M. Schwartz, and Alan M. White generously provided cite-checking assistance, and others made thoughtful suggestions. During the last two weeks, the letter was circulated privately among law professors, and many--too many to thank here--passed it on to colleagues.  Though the letter is now public and will be sent to its addressees--Congressional leaders--today, we welcome additional signatories.

As the accompanying press release explains:

The Statement concludes that on balance, the existing regulatory structure places ?a higher value on protecting the interest of financial product vendors who promote complex debt instruments using aggressive sales practices, than on protecting the interests of consumers in transparent, safe, and fair financial products.?

The body of the Statement is 8 pages long, single-spaced. It refers specifically to dozens of scholarly articles and studies demonstrating that at ?critical moments of consumer confusion and vulnerability,? the existing regulators ?have been unwilling to expend resources to develop appropriate rules and guidelines and to police mortgage and credit instruments.? The Statement urges passage of H. 3126 because ?consolidated authority and a dedicated consumer-oriented mission would be likely to improve public confidence in the safety and efficiency of the vast consumer financial products marketplace.? It further provides an analysis of desirable aspects of the legislation and points to extensive scholarship supporting the need for a new approach to handling consumer financial regulation.

Update: Coverage at the Commercial Law Blog, Huffington Post, US PIRG Consumer Blog, and Wall Street Journal Real Time Economics Blog,

Full post as published by CL&P Blog on September 29, 2009 (boomark / email).