Protecting consumer rights

May 11, 2011

Eileen Ambrose's Op-Ed column on the Consumer Financial Protection Bureau rightly notes that the priorities of Elizabeth Warren, the consumer advocate many people expect President Obama to nominate to head the agency, "aren't as extreme as some business groups fear" ("Critics continue efforts to chip away at the new Consumer Financial Protection Bureau," May 8). In fact, they're not extreme at all.

Although she is now under attack from the right as if she were some kind of radical, Ms. Warren is a brilliant, long-time champion of middle-class values who has built a career working to make markets transparent and fair enough to work for all of us.

Basic economic theory holds that markets only function effectively when people have full information. Without such information, consumers simply can't make rational choices that serve their long-term interests. Instead, short-term profits often go to unscrupulous firms who conceal information and whose practices hurt the public interest and rob resources from business that try to do the right thing for their customers.

Over the last three years, we've suffered through the collapse of the housing market after years of predatory mortgage lending practices that few consumers understood and many bankers still can't adequately explain. The terrible recession the bursting housing bubble helped prompt should leave little doubt just how devastating the impact of poorly-regulated and understood marketing practices can be for consumers and businesses alike.

As we struggle to dig out of the economic wreckage that financial collapse caused, consumers clearly need the kind of information and protection the CFPB promises to provide. But this is not a zero-sum game where what helps consumers must hurt businesses. Giving consumers the information they need to make sound decisions will encourage sustainable practices and reward responsible businesses.

Then, as Ms. Ambrose suggests, many businesses will find that "what's good for consumers is also good for them."

Marceline White, Baltimore

The writer is executive director of the Maryland Consumer Rights Coalition.

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