To fulfill its promise to promote consumer protection and fair competition, the Consumer Financial Protection Bureau must avoid two crucial errors.
First, the bureau should follow the Hippocratic oath and do no (more) harm. Since the financial crisis, Washington has unleashed a surge of misguided regulation unprecedented in recent economic history. The Credit Card Act of 2009 interfered with the ability of credit card issuers to price risk accurately, thereby depriving many low-income consumers of credit cards. Then the Durbin Amendment to Dodd-Frank imposed price controls on debit card interchange fees, leading to a dramatic increase in bank fees and a loss of free checking for millions of consumers. In addition, bank regulators imposed new limits on access to overdraft protection by consumers. According to the F.D.I.C., one million consumers — mainly low income — lost bank accounts between 2009 and 2011.