I’ve linked to Warren before, but my favorite public policy theorist/practioner has a new lecture on regulating consumer financial markets, which is only ten minutes long and very persuasive:
Also, from this recent interview:
The consumer credit market is broken. While the average credit card contract was a single page in 1980, it is now more than 30 pages. Instead of competing for business on straightforward terms, creditors advertise one price and then bury tricks and traps in the fine print. That tricks and traps are called “revenue enhancers” in the industry, and they hide the trust cost of credit and make it impossible for consumers to compare products and shop for better deals. The proliferation of deceptive products has magnified risk at the family level, eliminated real consumer choice, reduced real competition, and driven the market to innovate by creating more tricks and traps rather than by serving customers.
The credit market is broken in large part because of the lack of meaningful rules. Consumer protection authority is currently scattered among seven federal agencies, and all of those agencies have failed to create effective rules for two structural reasons.