Meltdown: The Financial Crisis, Consumer Protection, and the Road Forward

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Meltdown reveals how the Consumer Financial Protection Bureau was able to curb important unsafe and unfair practices that led to the recent financial crisis. In interviews with key government, industry, and advocacy groups along with deep archival research, Kirsch and Squires show where the CFPB was able to overcome many abusive practices, where it was less able to do so, and why. Open for business in 2011, the CFPB was Congress's response to the financial catastrophe that shattered millions of middle-class and lower-income households and threatened the stability of the global economy. But only a few years later, with U.S. economic conditions on a path to recovery, there are already disturbing signs of the (re)emergence of the high-risk, high-reward credit practices that the CFPB was designed to curb. This book profiles how the Bureau has attempted to stop abusive and discriminatory lending practices in the mortgage and automobile lending sectors and documents the multilayered challenges faced by an untested new regulatory agency in its efforts to transform the brokenbut lucrativebusiness practices of the financial services industry. Authors Kirsch and Squires raise the question of whether the consumer protection approach to financial services reform will succeed over the long term in light of political and business efforts to scuttle it. Case studies of mortgage and automobile lending reforms highlight the key contextual and structural conditions that explain the CFPB's ability to transform financial service industry business models and practices. Meltdown: The Financial Crisis, Consumer Protection, and the Road Forward is essential reading for a wide audience, including anyone involved in the provision of financial services, staff of financial services and consumer protection regulatory agencies, and fair lending and consumer protection advocates. Its accessible presentation of financial information will also serve students and general readers.

Reviews

With Meltdown: The Financial Crisis, Consumer Protection, and the Road Forward, Larry Kirsch and Greg Squires provide a valuable service. . . . This book is the first of this type and hopefully sets a trend for evaluating the new federal oversight established after the Great Recession. . . . In sum, Kirsch and Squires have written an insightful book that documents an important phase of an agency's history; that is, how the agency came into being, and its institutional strengths and weaknesses. It provides valuable lessons for the CFPB's growth as well as providing suggestions about how to create future initiatives like this from scratch. * Shelterforce *

Author Bio

Larry Kirsch is managing partner of IMR Health Economics, Portland, OR. Gregory D. Squires is professor of sociology and public policy and public administration at George Washington University.