The High Cost of Borrowing: An Intolerable Situation Created by Today's Inadequate Consumer Credit Protective Legislation

Abstract

The intention of this thesis is to explore in more detail what has been previously said about "the high cost of borrowing" 'in consumer credit. Part 1 attempts to describe the diversified growth of the consumer credit industry in terms of its many lending and selling institutions and their credit plans. Part 2 describes the industry's development in terms of its consumer protective legislation. Those differing methods prescribed by law or used voluntarily to compute and disclose the costs of credit are thusly included. Part 3 reveals the growing awareness of the consumer's inability to both realistically compare the costs of competing credit alternatives and ascertain the true cost of consumer credit. This and the other effects of inadequate consumer credit protective legislation are amply illustrated. Part 4 accounts for those remedial efforts being made to increase consumer awareness of the costs of credit and to in turn promote more rational consumer credit decisions. Much of Part 4 is therefore devoted to the "Truth-in-Lending" bill and the solution of its pro and con arguments.