The year of the consumer dawns

WASHINGTON, June 25 (UPI) -- The past year in finance has seen protections for U.S. citizens build up at an unprecedented rate, a Boston University professor said.

"It's a pace of regulatory output we've never seen before in the consumer area," Richard Hackett, a teacher of consumer-finance law at the Morin Center for Banking and Financial Law, was quoted as saying Friday by The Wall Street Journal.

Recently passed protections from financial sector abuses include a new credit card law restricting some charges.

On Friday, a joint Senate and House committee approved a bill to overhaul the financial system. A key feature of the new bill is the creation of a Consumer Financial Protection Bureau to write rules on a variety of consumer loans.

States are also participating in what might be termed the year of the consumer.

In Arizona, restrictions on payday lenders that go into effect July 1 will end their ability to charge, effectively, an annual interest rate of 450 percent, the Journal reported.

In Maine, Arkansas and New York, loans given by tax-preparers -- essentially, advances on tax returns -- are under new restrictions. In Wisconsin, car titles are no longer allowed as collateral for loans that in the past have left consumers with soured loans without a car.

Some say the new restrictions limit consumer options. Some see their civil liberties, including the freedom to make mistakes, curtailed.

"At the end of the day, people need to accept responsibility for what they sign up for. The government is overstepping and being very paternalistic in dictating what options are available to me," said Ryan Schroeter, a technology consultant from Bloomfield Hills, Mich.