The Inclusive Economy
Consumer Financial Protection Needs Rebranding
By Margaret Miley, Guest Contributor on 11/15/2012 @ 08:00 AM
Last week, the CFED and the Assets & Opportunity Network Steering Committee co-hosted a national conference call with national pollster Guy Molyneux from Hart Research Associates on the outcome of the election and what it means for the asset-building field. Yesterday, I posted my first overview of Guy's analysis.
One interesting point from Molyneux was on the topic of consumer financial protection. His research showed that consumers don’t know what is meant by “financial regulation,” yet they are suspicious of large financial institutions and reactive in specific instances, such as the recent backlash on overdraft fees.
In Massachusetts, we now have a senator-elect who is a strong champion for consumer protection in the financial services sector. Elizabeth Warren’s election will raise the visibility of our work in a way that we have not seen since the fall of 2008. Remember then? With no small amount of heartburn, the nation asked “What just happened in the capital markets?” The general public (and some of us) learned about liars, loans, exploding mortgages, collateralized debt obligations, credit default swaps, corrupt credit ratings, zombie assets and much more. Elizabeth Warren coined the term “tricks and traps” to diagnose the illness that plagued the whole system, infecting borrowers, savers, investors and taxpayers in its quest for innovation, automation and expansion. Though Warren’s campaign was sprinkled with references to the economy being “rigged,” her candidacy was framed around the more expansive notion of protecting the middle class, with less focus on the financial sector.
Consumer financial protection is so important, but rebranding is needed to make it compelling. The terminology of “financial regulation” is inaccessible. Vague terms like “rigged” and “tricks and traps” will not resonate with the general public in 2012, as they did in 2008. Those in our field can observe that the marketplace is still riddled with traps, but to the general public, this may sound like a tired conspiracy theory.
So how can we re-brand consumer financial protection?
1. We need to make it concrete by providing examples that compare financial products to other consumer products. For example:
- Mortgages should not unexpectedly explode in a balloon obligation, just as trucks shouldn’t explode after a few years on the road.
- Applicants at for-profit colleges should know what they are buying and how much they are paying before they sign the paperwork, just as buyers of cars do.
- Debt collectors should show evidence of the borrower’s obligation if they are using the court system to collect the debt, as plaintiffs in any other lawsuit are required to do.
- Payday loans should not burden borrowers in perpetually high-cost revolving debt, just as….I don’t know, but you get the point here.
2. We also need a better overall tagline. Just as we some of us are moving from “asset building” to the more accessible terms like “financial security” and “financial capability” for our field, we need language that is encompassing, accessible and timely.
At Midas, we use the expression "making the economy safe for all" and "making the economy work for all." But we could do much better...ideas welcome!