Prof. Norman Silber Writes ‘Uncontrolled Lending to Consumers Spawned the Financial Crisis’

Professor Norman I. Silber wrote the following article for the websiteThe Baseline Scenario.

Uncontrolled Lending to Consumers Spawned the Financial Crisis

by Norman I. Silber and Jeff Sovern
March 5, 2010


Zywicki is right that we need “simplified and streamlined regulation.” The problem is that the existing structure, with consumer protection split among an alphabet soup of agencies, such as the OCC, OTS, NCUA, FDIC, HUD, FTC, and, of course, the Fed, among others, is not likely to produce simplified and streamlined anything. We share Professor Zywicki’s concern that the Truth In Lending Act needs pruning, for example.

The best way to attain simplified and streamlined regulation is to simplify and streamline the agencies that produce it-by reducing them to one. Doing so would concentrate consumer protection expertise in one place and enable accountability. And, we assert, if it had been done a few years ago, the financial crisis might have been averted.