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ARTICLE · 18 APRIL 2011

Cost-Benefit Consideration in Regulating Debt Protection Products

Jones Day
Jones Day
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The U.S Government Accountability Office ("GAO") recently issued a report entitled "Consumer Costs for Debt Protection Products Can Be Substantial Relative to Benefits but Are Not a Focus of Regulatory Oversight" (the "Report"), which analyzed the regulation of debt protection products.

United StatesConsumer Protection
Jayant W. Tambe
Jayant W. Tambe
Amy Dias
Amy Dias
Gregory Hanthorn
Gregory Hanthorn
Sydney McDole
Sydney McDole
Richard Ruben
Richard Ruben
Lee Ann Russo
Lee Ann Russo
Albert Rota
Albert Rota
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The U.S Government Accountability Office ("GAO") recently issued a report entitled "Consumer Costs for Debt Protection Products Can Be Substantial Relative to Benefits but Are Not a Focus of Regulatory Oversight" (the "Report"), which analyzed the regulation of debt protection products. The Report stated that the "financial benefits to consumers may be limited" because "a relatively small proportion of the fees consumers pay ... is returned to them in tangible financial benefits." In addition, the Report concluded that these products can be difficult for consumers to assess. The GAO found that "ensuring that these products represent a fair value to consumers would be consistent with the new agency's mission." Thus, the Report recommended, and the agency agreed, that the Consumer Financial Protection Bureau ("CFPB" or "Bureau") "factor into its oversight of credit card debt protection products, including its rulemaking and examination process, a consideration of the

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