New Institute for Consumer Financial Choice Seeks to Reshape the Consumer Finance Policy Debate

A newly launched academic institute is seeking to influence the future direction of consumer financial services regulation by promoting a policy framework centered on consumer choice, market competition, empirical research, and innovation. In the podcast we are releasing today on Consumer Finance Monitor, our host Alan Kaplinsky (founder, former chair for 25 years and now senior counsel) interviewed Professors Todd Zywicki of George Mason University Antonin Scalia Law School and Tom Miller of Mississippi State University about their newly created Institute for Consumer Financial Choice (ICFC), its mission, and its ambitious agenda.

Key Topics Discussed:

·                 A Different Vision of Consumer Protection: Rather than viewing regulation and deregulation as opposite ends of a policy spectrum, the Institute seeks to identify regulatory approaches that encourage innovation, expand consumer choice, and improve market performance while still protecting consumers from genuine abuses.

·                 Beyond Research: Influencing Policy: The ICFC plans to produce peer-reviewed empirical research, file amicus briefs in important litigation, submit regulatory comment letters, educate students, policymakers, and industry participants, and serve as a resource for legislators and regulators confronting emerging consumer finance issues.

·                 Revisiting the CFPB Task Force Report: One of the Institute’s earliest priorities is breathing new life into the CFPB Task Force Report issued in 2021.

·                 Research Priorities: The Institute has already identified an ambitious research agenda that includes evaluating whether the Military Lending Act has improved access to credit for servicemembers, conducting new empirical research on the pawn industry, studying ancillary financial products such as GAP insurance and extended warranties, examining payday lending regulation, investigating rural financial inclusion, exploring stablecoins, cryptocurrency, and digital payments, and assessing how existing regulatory structures can better accommodate technological innovation.

·                 Artificial Intelligence Moves to the Forefront: Professor Zywicki argued that AI presents both enormous opportunities and significant risks for consumer financial services.

·                 Policy Issues Likely to Receive Immediate Attention: Professors Zywicki and Miller identified several policy areas where they believe the Institute can have an immediate impact, including interest rate caps and usury laws, APR disclosures and widespread misunderstanding of APR as a measure of price, payment systems and interchange regulation, federal preemption and the future of dual banking, financial inclusion, stablecoin regulation; and emerging litigation involving consumer financial regulation.

The Institute’s long-term success will ultimately be measured not by the number of conferences it hosts or papers it publishes, but by whether its research meaningfully influences legislation, regulation, litigation, and public understanding of consumer financial services. Based on the conversation with Professors Zywicki and Miller, they have set ambitious goals and they appear determined to pursue them.

Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm's Consumer Financial Services Group. We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.