Guest Post: Tilting at Windmills – Part II

By: Mark J. Dobosz

December 1, 2015

 

Last week I wrote about the use of data by the CFPB and the value of insuring that it stands the test of true scientific research on which to base findings.

 

I commented that “[w]orking with a regulatory body is meant to be a collaborative process where all sides can trust in the third-party data and research used to develop a level-playing field for consumers and creditors. That is very difficult to accomplish when one-side provides data that is reflective of both quixotism and idealism.”

 

An article yesterday in JDSupra Business News, Does This Year’s Nobel Prize in Economics Suggest Any Lessons Regarding the Regulation of the Consumer Finance Industry? (http://www.jdsupra.com/legalnews/does-this-year-s-nobel-prize-in-81691/) appears to support that position.

 

Professor Angus Deaton, who recently won the 2015 Nobel Memorial Prize in Economic Science, has work which “holds relevant lessons with respect to the regulation of the consumer financial services industry.”

 

Article author, Vikram Kumar points to the following from Professor Deaton’s work,

 

“To the extent the CFPB and other federal and state governmental agencies are propounding scientific justifications for new regulations affecting the consumer financial services industry, the quality of the data underlying such scientific theories is of fundamental importance. As Professor Deaton’s research has shown, data regarding consumer behavior may be incomplete or inaccurate due to design failures affecting the data-gathering process. When such a study is conducted by a political entity, rather than an independent expert, issues of research methodology arguably should be front and center.”

 

Federal regulatory agencies should take note of other experts in the field when gathering data – rely on the experts as third-party independent resources who can provide “independent” data.

About the Author:  Mark Dobosz currently serves as the Executive Director for NARCA – The National Creditors Bar Association. Mark is a one of NARCA’s speakers on many of the creditors rights issues impacting NARCA members. The National Creditors Bar Association (NARCA) is a trade association dedicated to creditors rights attorneys. NARCA's values are: Professional, Ethical, Responsible