The Radical Potential of Consumer Financial Protection

This Article offers a novel retheorization of consumer financial protection that surfaces its radical potential. That retheorization is motivated by two developments. The first is the rise of debtor movements over the last decade demanding the abolition or cancellation of debt, such as the recent national campaigns against student debt and medical debt. The second is an emerging view this Article identifies in sociological and legal scholarship. Recent scholarship understands consumer financial protection as in tension with the radical ambitions of debtor movements and neoliberal in its orientation: it operates to sustain market logics as opposed to contest them.This Article’s retheorization undermines this second, pessimistic view. It begins by recasting consumer financial protection as a response to market domination facilitated by the legal and institutional design of our financial system. It then traces the various legal and institutional forms this response took over the course of the twentieth century. Retracing this history through this lens reveals that consumer financial protection has functioned both to affirm and contest the logic of our financial system. Consumer financial protection’s role as a counter logic is sharpest when it has an institutional presence in financial market governance and leverages this presence to reallocate governing power and redistribute burdens in financial markets. And its role is weakest when it has little institutional presence in market governance and seeks to merely manage the costs of the financial system at its margins.This Article’s core argument is that consumer financial protection is justified and best functions as a counterweight to our regressive and antidemocratic institutional arrangements around money and banking. Thus, if we want to develop countervailing power in financial markets, it is sensible to grant consumer agencies broad powers to contest institutional actors that facilitate domination rather than distributing this authority. In our current political moment, this Article’s retheorization serves primarily as a partial defense of what was rather than a suggestion of what can be. But I conclude by considering how the themes surfaced in this Article might serve as the foundation for a reconstruction of what will inevitably be a broken future regulatory framework in consumer finance.