Eric M. Aberg
84 Geo. Wash. L. Rev. 1029
In the lead up to the financial crisis of 2007–2009, federal banking regulators failed to keep large national banks in safe and sound condition while allowing them to engage in lending practices that exploited vulnerable consumers. Measures have been passed in recent years to reign in the most egregious consumer abuses of financial institutions. Nevertheless, “hidden” credit card fees and service charges remains an area of banking practice that has the real potential to seriously harm consumers and weaken our national economy. Measures such as the 2009 CARD Act do not go far enough in protecting American consumers from unfair, deceptive, and abusive credit card lending practices. This Note reviews how, prior to the financial crisis, federal preemption, coupled with a lax and fragmented federal regulatory system, shielded national banks from state-law-based enforcement actions that might have otherwise curbed abusive and unsound credit-extending practices. The Note suggests a way in which various provisions of the Dodd-Frank Act can work together to provide a stronger, more comprehensive regulatory regime covering credit card fees and service charges. The proposed scheme is designed so that state governments—which are best positioned to act as consumer financial protection advocates—can effectively spearhead the effort to combat con- sumer credit card abuse and is intended to reach unfair, deceptive, and abusive credit card practices that have until now mostly escaped the gamut of federal banking regulation.
Read the Full Note Here.
