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Improving Consumer Protection: Lessons from the 2008 Recession

By Martha Coakley & Alicia Daniel. Full text .

The 2007 home foreclosure crisis drove the United States economy into a tremendous recession. This recession, fueled by increased consumer access to loans and issuances of risky debt, among other factors, spiraled into the 2008 global financial meltdown. State attorneys general (AGs) were the first responders to the meltdown, attempting to fight the crisis within their own state bounds. Over the years that followed, a coalition of AGs partnered with government agencies in negotiating an agreement with former lenders of at-risk mortgages. This national settlement established new mortgage loan servicing and foreclosure standards and created new consumer protections. The settlement also gave rise to Massachusetts’ HomeCorps Program and similarly structured programs in other states, which aimed to mitigate current and future impacts of the crisis.

The year 2018 marked ten years since the global financial meltdown. This Article focuses on the current state of consumer protection in the United States and considers the effectiveness of various post-meltdown government initiatives geared towards consumer protection. As the current administration dismantles many post-crisis initiatives, such as the Dodd-Frank Act, this Article considers the future of consumer protection and what Americans need moving forward.