Law Commons^™

Banking And The Social Contract, Mehrsa Baradaran

Notre Dame Law Review

This Article asserts that there are three major tenets of the social contract: (1) safety and soundness, (2) consumer protection, and (3) access to credit. Regulators can and should require banks to meet standards in these areas to benefit society even if these measures reasonably reduce bank profits. Implicit in the social contract is the idea that each party must give up something in the exchange. This Article provides policymakers not only the appropriate narrative and justifications needed to frame their regulatory philosophy, but it also provides important textual support from the most prominent acts of banking legislation to give …