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After the financial crisis of 2008 Congress responded by enacting new laws that changed the direction and theoretical underpinning of consumer protection in the financial sector The Consumer Financial Protection Agency formed by the DoddFrank Wall Street Reform and Consumer Protection Act of 2010 is a new and stronger agency for consumers Two pieces of legislation the Mortgage Reform and AntiPredatory Lending Act Title XIV of DoddFrank and the Credit Card Accountability Responsibility and Disclosure Act Credit CARD Act of 2009 are stronger laws ensuring the safety of consumer financial products These new legislative and regulatory developments mark a shift from the rational consumer theory that underlay the great disclosure statutes of the late 1960's and early 1970's such as the Truth in Lending Act and toward the rising influence of behavioral economics as a guiding force in consumer protection This article examines the new agency and the new laws explains how they differ from the prior governmental structure and precepts compares and contrasts rational consumer theory and behavioral economics theory demonstrates how the new developments are a reflection of the modern theory and then analyzes the advantages and disadvantages of this new approach

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