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Democracy DeclinedThe Failed Politics of Consumer Financial Protection$
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Mallory E. SoRelle

Print publication date: 2020

Print ISBN-13: 9780226711652

Published to Chicago Scholarship Online: May 2021

DOI: 10.7208/chicago/9780226711829.001.0001

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Full Disclosure: Building the U.S. Political Economy of Credit

Full Disclosure: Building the U.S. Political Economy of Credit

(p.34) 2 Full Disclosure: Building the U.S. Political Economy of Credit
Democracy Declined

Mallory E. SoRelle

University of Chicago Press

Chapter two, Full Disclosure: Building and Sustaining the U.S. Political Economy of Credit, explores why federal policymakers haven’t enacted consumer financial protections that effectively curb predatory lending in the United States. It draws from an original dataset of all major federal consumer financial protections to investigate the legislative history of the U.S. consumer credit regulatory regime, beginning at the turn of the 20th century. The chapter argues that New Deal policymakers deliberately embraced credit to fuel a consumption economy, setting in motion a U.S. political economy of credit. This system, which prioritized expansive access to credit over consumer protection, created a path-dependent process that led policymakers to adopt disclosure requirements as the primary strategy for protecting borrowers’ finances, despite questions about the efficacy of disclosures and their inability to curb risky lending.

Keywords:   credit, consumer protection, predatory lending, New Deal, political economy, regulation, consumption, path dependence, legislative history

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