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157 U. Pa. L. Rev. 1 (2008-2009)
Making Credit Safer

handle is hein.journals/pnlr157 and id is 3 raw text is: University of Pennsylvania Law Review FOUNDED 1852 Formerly American Law Register VOL. 157 NOVEMBER 2008 No. 1 ARTICLE MAKING CREDIT SAFER OREN BAR-GILLt & ELIZABETH WARREN Physical products, from toasters and lawnmowers, to infant car seats and toys, to meat and drugs, are routinely inspected and regulated for safety. Credit products, like mortgage loans and credit cards, on the other hand, are left largely unregulated, even though they can also be unsafe. Because financial products are analyzed through a contract paradigm rather than a products paradigm, consumers have been left with unsafe credit products. These dan- gerous products can lead to financial distress, bankruptcy, and foreclosure, and, as evidenced by the recent subprime crisis, they can have devastating ef- fects on communities and on the economy. In this Article, we use the physical products analogy to build a case, supported by both theory and data, for com- t Associate Professor of Law, New York University School of Law. t Leo Gottlieb Professor of Law, Harvard Law School. This Article greatly bene- fited from comments and suggestions by Rachel Barkow, John Ferejohn, Barry Fried- man, Clayton Gillette, Lewis Kornhauser, Geoffrey Miller, Matthew Stephenson, and workshop participants at Georgetown. Julie Chen, Carmen Iguina, and Margot Pollans provided excellent research assistance. (1)