In a speech today, the Federal Reserve chairman Ben S. Bernanke talked about the need to “strike the right balance: to strive for the highest standards of consumer protection without eliminating the beneficial effects of responsible innovation on consumer choice and access to credit.”
Where exactly regulators think that “balance” lies has varied greatly over time. Throughout American history, politicians and their constituents have viewed access to credit as alternatively empowering and exploitative. We can’t seem to decide: Is making credit available to “subprime” borrowers helping them, or taking advantage of their ignorance?
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