Truth in Lending Theory, History, and a Way Forward

This book is a guide to the purposes, strengths, and weaknesses of disclosures as consumer protections in financial transactions such as loans, deposits, and consumer leases. It focuses on the federal Truth in Lending Act but also covers a variety of other federal disclosure statutes designed to protect consumers in their financial relationships. It comes at a time when federal financial consumer protection policy in the financial area is again a matter of intense public scrutiny and debate. Because of the importance of public policy issues surrounding use of disclosures as consumer protections, the intended audience includes anyone interested in these issues, not simply specialists who spend their time focused on them. For this reason, the work avoids academic jargon and the mathematics that is the modern language of economics. It also examines the psychological, sociological, historical, and especially legal traditions that go into fully understanding what has led to the demand for better disclosures for consumers and to what they have become today. Despite a need to outline and review prior difficulties with disclosure laws, the book remains optimistic that disclosures will continue to be an important means of consumer protection and that future reforms can improve their effectiveness and lower their regulatory costs and burden.

Thomas Durkin has specialized in the economics and regulation of consumer financial services, in the federal government as Senior Economist at the Federal Reserve Board, in the academic area as Associate Professor of Finance at the Pennsylvania State University, and in the private sector as Chief Economist of the American Financial Services Association.

Gregory Elliehausen has also specialized in the economics and regulation of consumer financial services, in the federal government as Economist at the Board of Governors of the Federal Reserve System for more than twenty years and in the academic sector as Senior Research Scholar at Georgetown University and the George Washington University.