Research

Research Products

Consumers’ Research conducts research and produces literature in a number of subject areas relevant to consumers. In the past CR has examined the CFPB’s Arbitration Rule, the consumer implications of initial coin offerings, and consumer protection in the digital currency economy. Looking to the future, CR is turning its focus to such issues as small dollar lending and financial technology.

Project Description

Consumers likely want to choose the cheapest way to borrow money. Violet might have friends or family she could ask for help. But, like most consumers she might prefer to keep financial matters private. She needs to borrow money from a lender. State laws limit and shape the small-dollar loans available to consumers from legal lenders.

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Project Description

In recent years, initial coin offerings (ICOs) have become an increasingly popular mechanism for raising capital for cryptocurrency- and blockchain-based projects. This influx of capital into new, untested financial products represents an opportunity for non-traditional investors, but may also pose significant risk of financial harm to novice investors. This paper provides background information on the origins and proliferation of ICOs, explains the risks involved with investing in ICOs, and details a number of considerations potential investors ought to contemplate before committing their resources to a new ICO-funded project. An assessment of this market indicates that investors should be extremely cautious when considering investing in an ICO and should, at the very least, possess a fundamental understanding of what cryptocurrency is and how it derives its value, as well as what risks are inherent to cryptocurrencies and what external factors exacerbate this risk.

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Project Description

On July 10, 2017, the Consumer Financial Protection Bureau issued a Final Rule in which it prohibited individual arbitration agreements between financial services companies and consumers that have disputes with one another. The Rule corroborated a detailed analysis of the costs, types, and impacts of class action lawsuits and individual arbitration procedures that the Bureau conducted in 2015. The primary goal of this mandate, which wen into effect on September 18, was to encourage large groups of consumers to take companies to court if they feel they have a dispute. Consumers’ Research conducted an analysis of some of the data and methods in the report, as well as the differences between arbitration and class action suits.

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Project Description

Protecting Consumers in the Digital Currency Economy presents guiding principles on consumer protection for businesses working with digital currencies and other blockchain-based assets. The document is the culmination of this summer’s Bretton Woods 2016 workshop, hosted by Consumers’ Research, which gathered regulators, legislators, policy-makers, legal experts, and members of the financial services industry.

The guiding principles document:

  • Outlines the state of consumer protection in the digital currency economy for digital currency industry entities;
  • Presents a consumers’ bill of rights and fourteen guiding principles for consumer protection;
  • Examines the flaws, failures, and weaknesses of existing financial industry frameworks, as well as newer digital currency and distributed ledger products and services;
  • Recommends solutions in the fields of asset security, data privacy, usability, and disclosure & liability.

Over the last few years, federal regulators have been advising the blockchain community to develop a set of best practices to address consumer protection concerns associated with distributed ledgers. That’s exactly what we’ve produced here—the first industry-led, self-regulatory effort in Bitcoin/blockchain, based on conversations and collaboration with an incredible variety of experts.

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Project Description

Introduction:

Electromagnetic pulses (EMPs) are a little understood phenomenon that many believe could pose a serious threat to our nation’s critical infrastructure. EMPs may sound like something out of a science fiction novel: a nuclear blast at high altitude or particles from a solar storm interacting with the Earth’s magnetic field to cause disruption or damage to the electrical grid and electronics. This May 2016 paper will outline the EMP threat, and provide an overview of current and potential mitigations, including the state of legislative and policy activity. It draws on the 2008 report from the Commission to Assess the Threat to the United States from Electromagnetic Pulse Attack, reputable open-source resources, and interviews with subject matter experts in government and private industry.

Conclusion: 

While progress is being made to assess vulnerabilities and improve grid security, the United States is unprepared for the effects of an EMP and more work is necessary to protect the American public.

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