(Un)Democratic by Design

Abstract This chapter describes how the institutional design of finance governance matters for picking winners. In the United States, responsibility for devising and implementing consumer financial protections is fragmented—both within and across levels of government. This decentralized and fluid system of finance governance shapes the degree to which different actors can influence US consumer financial protection by raising the costs of engaging with policymakers, decreasing the visibility of regulatory actors, and allowing industry interests to engage in venue shopping for favorable treatment. The result is that industry actors can exert greater power over regulatory outcomes at the expense of wage earners or consumers. The chapter also explores how the Consumer Financial Protection Bureau reshapes the landscape of finance governance by centralizing a greater degree of policymaking authority, generating the conditions for more robust financial protection even in the absence of underlying legislative changes to the system of financial regulation.