Why Now is Not the Time to Revamp Consumer Financial Protection

Growing problems in the increasingly one-sided consumer finance markets blew up the economy in 2008. In the aftermath, Congress created the Consumer Financial Protection Bureau. Using stories of individual consumers, Watchdog shows how the bureau quickly became a powerful force for good, suing big banks for cheating or deceiving consumers, putting limits on predatory lenders, simplifying mortgage paperwork, safeguarding the mortgage market and the economy, and stepping in to help solve problems raised by individual consumers. It tells a hopeful story of how the American system can be reformed by putting government back on the side of the people, to strengthen families, safeguard the marketplace, and establish a new baseline of fairness in democratic society.

Download Full-text

Uncertainty and health insurance

10.1093/oso/9780198794837.003.0010 ◽

2017 ◽

Author(s):

Jan Abel Olsen

Keyword(s):

Health Insurance ◽

Excess Demand ◽

Financial Protection ◽

Insurance Plan ◽

Welfare Gain ◽

Health Insurance Plan ◽

Insurance Contracts ◽

Efficiency Losses ◽

Potential Efficiency

This chapter seeks to explain why most people prefer to have a health insurance plan. Two types of uncertainty give rise to the demand for financial protection: people do not know if they will ever come to need healthcare, and they do not know the full financial implications of illness. Health insurance would take away—or at least reduce—such financial uncertainties associated with future illnesses. A model is presented to show the so-called welfare gain from health insurance. This is followed by an investigation into the potential efficiency losses of health insurance, due to excess demand for services. In the last section, a different efficiency problem is discussed: when people have an incentive to signal ‘false risks’, this can lead to there being no market for insurance contracts which reflect ‘true risks’.

Download Full-text