Federal Regulation of Consumer Credit: The Cause or the Cure for Predatory Lending?

Margot Saunders, Alys Cohen

BABC 04-21: Federal law has long been a primary source of important individual rights, from voting and other civil rights to workplace safety. State law, however, has traditionally provided most protections for consumers in the marketplace. Instead of leading the way on consumer protections, federal law – with the important exception of the Consumer Credit Protection Act – has unfortunately degraded the traditional protection of consumers through state law and has created and supported the advance of predatory lending in this nation. These changes can be laid on the doorstep of federal preemption of state consumer credit laws, the expansion of federal banking agency powers, and congressional changes to the tax code…