Professor John Pottow of the University of Michigan School of Law, just addressed Dodd-Frank’s newly created duty of lenders to assess and assure a borrowers ability to pay. As Professor Pottow pointed out, such a concept is not wholly new to legal thought; however, Dodd-Frank’s wholesale import of the standard is a radical change to U.S. consumer law. Professor Pottow reviewed the geneology of the law as well as comparing it to similar concepts in other areas of domestic law and similar foreign laws. In addition, Professor Pottow also parsed the language of the new ability to pay statute and discussed worries regarding how this new duty will be interpreted.
To view Professor Pottow’s full working paper click here.