“What your bank owes you:  clarity”

An OpEd by Professor Lauren E. Willis and Citizen Works’ executive director Theresa Amato in the Los Angeles Times discusses the limits of financial literacy education and the resulting need to enforce the laws, ban class action waivers and forced arbitration clauses, and restructure industry incentives. 

Excerpt:

“Trying to educate every American out of these problems is an abdication of our collective social responsibility. We don’t expect people to be their own doctors or lawyers; why would we expect them to be their own financial advisors? When experts cannot agree on answers to the questions, pretending that we will teach artists and architects, farmers and flight attendants, police officers and plumbers to find good answers is a cruel joke.

“If financial literacy education isn’t the answer, what is? The financial marketplace must be structured so that ordinary people — people with limited time, math skills, attention and willpower, and an abundance of those wonderful American traits of trust and optimism — can navigate it safely and effectively.

“This demands that we vigorously enforce existing laws against unfairness, deception and abuse. We must ban class-action waivers and forced arbitration clauses (the Dodd-Frank Act permits this, but the issue is still being studied) so that defrauded consumers can sue for justice. But suing after the harm is not enough. Financial industry incentives must be brought into alignment with the interests of consumers.”