Theory of Change, Part III: Equitable Lending and Investments

Check out our Third installment of "Theory of Change". In this edition, we share our thoughts on Equitable Lending and Investments and what that looks like to us!


The U.S. House Financial Services Committee passed the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs (CHOICE) Act on September 13, a kitchen sink piece of legislation that would roll back many of the advances made since passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The bill takes a broad swipe at financial regulation and would decrease the power and independence of many oversight bodies. Among the bill’s targets are the Consumer Financial Protection Bureau (CFPB), Dodd-Frank’s signature Volcker Rule restricting dangerous speculative investments on the part of banks, and the Department of Labor’s fiduciary rule for retirement investment advice. This kind of legislation, regardless of whether it stands a chance of ever becoming law, represents a serious threat to regulators’ ability to protect consumers. 

Donald Trump has called for a moratorium on regulations.  Considered in a vacuum, this may sound like a good – or perhaps a harmless – idea.  Regulations can be confusing and burdensome.  Considered in the context of the complicated world of consumer finance, this idea is dangerous.  Consumers – whether knowingly or not – depend on financial regulations to protect them in interactions with financial service providers, such as retirement investment advisors (more on that in a minute).  Buying a home, applying for a credit card, opening a bank account, these are just a few examples of instances in which consumers must enter the oftentimes confusing realm of consumer finance.  Absent good laws and regulations, consumers are at the mercy of their financial provider.  If consumers have the bad fortune to rely on unscrupulous providers, that experience may lead to financial ruin.

June 2nd marked a major milestone of another campaign that illustrates Woodstock’s Theory of Change. On that day, the Consumer Financial Protection Bureau (CFPB) issued proposed rules that would govern payday and car title loans. These rules represent a major achievement for Woodstock and for the many groups that have been working for years to protect consumers from abusive payday lenders.

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