Consumer Protection and Financial Inclusion – Brian Johnson of the CFPB

On June 12, 2019 Brian Johnson, Deputy Director of the CFPB gave a speech with the title above. It is short and worth a read.  It’s an interesting attempt to say that giving consumers choice and reducing certain kinds of government regulation that limits choices is the best form of consumer protection. Johnson states clearly that regulation requiring disclosure about products and services is necessary, as is government action to combat unlawful acts or practices by market participants, including and especially those that are deceptive or discriminatory.

He opposes what he calls market-restrictive regulation, that is, regulation which substitutes the regulator’s choices for the consumers. “. . . this approach is not market-reinforcing. It is market-replacing because it substitutes the government’s preferences for those of consumers. And when government intervenes not to regulate market behavior, but to restrict product features, consumers usually lose.” Johnson also favors ensuring clarity in regulation so market participants understand the rules of the road, and reducing regulatory uncertainty. Johnson claims both of these benefit consumers.

Not surprisingly, Johnson has his critics. His speech was interesting because he affirmed the importance of government regulation in protecting consumers but argued more government regulation does not equal better consumer protection.


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