Chapter 10 Introduction 

Consumer spending is responsible for more than two-thirds of U.S. economic output. Older adults are responsible for a disproportionate share of consumer spending. They represent a powerful force that is driving economic growth and value. This includes the products and services they purchase directly, as well as the further economic activity this spending generates. According to the AARP Longevity Economy Report, older adults contribute $8.3 trillion to the U.S. economy every year. That represents 40 percent of the total value of goods and services—known as gross domestic product or GDP—produced in the U.S. annually. 

Ensuring consumer protections is essential in an economy so reliant on consumer spending. Financial services, in particular, can either help or harm consumers, depending on how products and services are structured. Unfair, deceptive, or abusive financial products and services can be especially harmful to older adults. They have less time to make up for the losses in income, savings, and retirement accounts that can result. The costs, terms, and conditions of financial services can therefore have an especially large impact on them. 

Taking on debt is one way they make up for income shortfalls. Over the past 30 years, the amount of debt older people carry has increased sharply. This is a threat to their long-term financial security, as increasing debt repayments burden the budgets of retirees. According to the Federal Reserve Survey of Consumer Finances, 72 percent of families headed by someone age 50 or older carried debt in 2019, up from 57 percent in 1989. The real average debt carried by Americans age 50 and older increased from $32,675 in 1989 (in 2019 inflation-adjusted dollars) to $93,587 in 2019. 

The Consumer Financial Protection Bureau (CFPB or Bureau) is responsible for protecting consumers in financial markets. The CFPB’s mission is to ensure that all consumers have access to consumer financial products and services that are fair, transparent, and competitive. Since opening its doors in 2011, the CFPB has promulgated regulations in many areas, including mortgage lending, loan disclosures, appraisals, debt collection, prepaid cards, and student loan servicing. 

Consumers need assurance that financial institutions will provide services and participate in practices that are fair and free of discrimination, such as racial bias in mortgage lending. 

Consumers also need to know they will be protected when they borrow, invest, or do business with a financial services company. Effective consumer protection is critical for the safety and soundness of financial markets as well as the U.S. economy as a whole. Americans of all ages benefit from stable financial and housing markets as they build financial security.