Legislative and Regulatory Comment Letters

Woodstock Institute influences policy at the local, regional, and national level by closely analyzing the impact of pending proposals on low-wealth communities and communities of color.
March 27, 2018

Dear Members of the Illinois Congressional Delegation:

The undersigned Illinois organizations urge you to oppose H.J. Res. 122, sponsored by 36 Members of Congress (none from Illinois). This measure would repeal the Consumer Financial Protection Bureau’s (Consumer Bureau) payday rule, which curbs the ability of payday and car-title lenders to trap consumers in an endless cycle of 300-plus percent interest debt. It is imperative that Congress oppose any effort to repeal or block the rule’s protections against the payday lending debt trap.

March 27, 2018

Dear Senators Durbin and Duckworth:

The undersigned Illinois organizations urge you to oppose S.J. Res. 56, sponsored by Senator Lindsey Graham. This measure would repeal the Consumer Financial Protection Bureau’s (Consumer Bureau) payday rule, which curbs the ability of payday and car-title lenders to trap consumers in an endless cycle of 300-plus percent interest debt. It is imperative that Congress oppose any effort to repeal or block the rule’s protections against the payday lending debt trap.

Sample Regulatory Comment on CFPB Small Business Lending Data Collection
September 11, 2017

Small businesses are a pillar of the U.S. economy. They employ nearly half of all of private sector workers, and they account for most of the job creation in this country. Small businesses produce about half of the country’s private nonfarm gross domestic product. Yet many small businesses struggle to gain access to capital, which is necessary for small businesses to grow. The overall outlook for small businesses in terms of access to credit became bleaker during and after the Great Recession as bank lending contracted dramatically.  And, while small business lending has rebounded to some extent, too many small businesses are struggling to gain access to safe and affordable credit.

As in so many other areas of the economy, communities of color experience this problem more acutely. Research shows that communities of color do not receive loans in proportion to their share of small businesses.  For example, as revealed in a 2017 report by Woodstock Institute entitled Patterns of Disparity, in the Chicago region, businesses in predominantly minority communities constitute about 15 percent of all businesses, but they receive only about eight percent of the number of loans from banks. A 2015 report by Woodstock entitled Her Longer Road Home, revealed disparities in mortgage lending to women in the Chicago region. These facts alone warrant action by regulators, financial institutions, and policymakers to determine (1) the full extent of disparities experienced by women- and minority-owned small businesses in gaining access to credit, and (2) whether such disparities are due to discrimination or other factors.

The situation is made even more critical, however, considering that some online companies known as financial technology (fintech) lenders prey on small businesses that have been left with no other options to access credit.  Some fintech lenders charge interest rates in excess of 300 percent! We are concerned that, just as with payday loans and sub-prime mortgages, communities of color may be targeted by these lenders.

We already know what can happen if policymakers take too long to act.  In the context of mortgages and the foreclosure crisis, data collected under the Home Mortgage Disclosure Act showed that African-American and Latino families were more likely to receive mortgages they could not afford and, correspondingly, were more likely to experience foreclosure. This resulted in catastrophic losses in wealth and the decimation of many communities.

Targeting certain demographics or communities with predatory loans is not just a matter of morality and justice. Given small businesses’ role as job creators, the impacts of predatory lending spill over into the overall economy. It is urgent that we get a handle on what is happening to women-owned and minority-owned businesses that apply for credit to create and expand small businesses.  The ability to protect women- and minority-owned small businesses is directly linked to the ability of gather data about their experiences seeking credit from both bank and non-bank lenders. How can we take action to safeguard these borrowers and communities if we don’t know how lenders are treating them? Correspondingly, we urge the CFPB to move expeditiously in promulgating the rules under section 1071 of the Dodd-Frank Act.

August 10, 2017
Early in the Trump Administration, the President directed the Department of Labor (DOL) to prepare an updated analysis of the likely impact of the fiduciary rule on access to retirement information and financial advice. This directive has been interpreted by many, including Woodstock, as the first step in trying to undo or overhaul the rule. This letter urges the DOL not to change the rule, which took effect in large part on June 9, 2017.
October 12, 2016

In this letter, co-signed by ourselves, Reinvestment Partners, California Reinvestment Coalition, and Maryland Consumer Rights Coalition, consumer advocates weigh-in expressing disappointment in the Washington D.C. Circuit Court of Appeals' ruling declaring CFPB's structure unconstitutional. The case, PPH Corporation v. CFPB, dealt with with the CFPB’s ability to order New Jersey mortgage-lending company PPH to pay a $109 million enforcement penalty after the corporation was found offering illegal kickbacks to mortgage insurance partners with the CFPB’s ability to order New Jersey mortgage-lending company PPH to pay a $109 million enforcement penalty after the corporation was found offering illegal kickbacks to mortgage insurance partners. The Circuit Court's decision means that CFPB Director Richard Cordry is now subject to at-will dismissal by the President.  

October 7, 2016

This comment letter was submitted to CFPB on October 7, 2016.  It expresses Woodstock's support for the Bureau's proposed payday lending rule as well as recommendations on the part of Woodstock Institute and the Monsignor John Egan Campaign for Payday Loan Reform as to how the rule might be strengthened. These recommendations include applying the ability-to-repay standard to all loans, extending the loan cooling-off period to 60 days, and the establishment of a limit on total days of borrowers' indebtedness. 

August 23, 2016
This comment letter was submitted to CFPB on August 18, 2016. It expresses Woodstock's support for the Bureau's proposed forced arbitration rule, which would provide for the arbitration of disputes between consumers and providers of certain consumer financial products and services, prohibiting class action waivers and would requiring regulated parties that use pre-dispute arbitration agreements to submit certain records relating to arbitral proceedings to the CFPB. CFPB's forced arbitration rule comment period ended August 22, 2016.
July 21, 2016

This is a sample comment letter to the CFPB in support of the proposed rule prohibiting the waiver of class actions in contracts for financial products and services, and requiring the reporting of information regarding the use of arbitration in the consumer financial context. We encourage you to use this resource to craft your own comment letter in support or you can simply sign on to ours.

July 21, 2016
The Consumer Financial Protection Bureau (CFPB) turns five years old this week. It was
created after the 2008 financial crisis to bring basic standards of fairness and transparency to
the world of credit cards, checking accounts, mortgages, student loans, payday and car-title
loans, auto loans, checking accounts, debt collection, credit reporting, and other financial
products and services.
Five years later, our organizations join in celebrating the important changes the CFPB has
already made, and in eager anticipation of the work to come. Individual statements attached.
June 16, 2016
In this comment letter, joint written with National Community Reinvestment Coalition (NCRC), Woodstock Institute writes to the FDIC about the possible benefits and risks of mobile financial services for low- and moderate-income as well as underbanked populations. Though mobile financial services represent a possible great boon for the underbanked, these mobile services in no way comprise an acceptable substitute for brick and mortar branch locations. After examining the issue from the standpoints of access, sustainability, and the possibility for growth, Woodstock Institute and NCRC caution the FDIC about the need for strategic thinking surrounding the use of mobile financial services among underbanked consumers.
May 31, 2016
In this comment letter, the Ford Foundation-funded coalition comprising of Woodstock Institute, the Main Street Alliance, California Reinvestment Coalition, and National People's Action write to the Office of the Comptroller of the Currency on that office's recent paper entitled “Supporting Responsible Innovation in the Federal Banking System: An OCC Perspective.” In general, we welcome the OCC’s development of a comprehensive framework to address innovation, and we believe, given the already fast pace of innovation, that it should be implemented swiftly. At the same time, we express concerns about the potential harm to small businesses, consumers, and communities if innovation is not checked by an adequate and appropriate regulatory framework.
March 23, 2016

In this comment letter, Woodstock Institute and its allies express opposition to the SAVERS Act of 2016 on the grounds that it would preserve the ability of financial professionals to put their own self interest ahead of their customers' interest when providing advice.

March 15, 2016

Woodstock expresses deep concerns over the closure of Chase Bank's closure of a branch in West Garfield Park, a majority minority, low-income community. Woodstock believes that the completeness and substance of the answers we received from Chase in regards to this closure are unsatisfactory and contends that mobile and online banking alternatives will fail to meet the banking needs of the population.

January 15, 2016

Woodstock Institute strongly supports creating a safe harbor for employers that are mandated to participate in state-established and administered automatic enrollment payroll deduction retirement savings programs, and we encourage the DOL to expand the safe harbor to employers that voluntarily participate in those programs. 

January 6, 2016

This sign on letter is in opposition to H.R. 1927, the "Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2015." The House may soon consider this resolution and Section 2 of this bill would effectively eviscerate consumer, antitrust, employment, and civil rights class actions. Woodstock's partners write in strong opposition to Section 2 of this bill. 

December 9, 2015

U.S. Department of Labor (DOL) Secretary Tom Perez announced in Chicago on November 16 a new proposed rule that establishes a safe harbor for state-established and administered programs like Secure Choice, so that employers who are required to participate will not be burdened by federal ERISA laws that apply to employer-sponsored retirement programs. This rule will be critically important in allowing states to implement these programs. Please sign and send this letter to DOL in support of the proposed rule before the January 19, 2016, deadline, and send a copy to drand@woodstockinst.org.

December 2, 2015

This letter submitted with our partners comments on the needs to update regulations that significantly affect whether banks respond to the financial needs of low income communities and communities of color. We understand the EGRPRA process creates the opportunity to identify regulations that need to be updated and modernized in order to best meet their original purpose and intent. However, we are concerned that the agencies will lean toward eliminating regulations considered outdated, unnecessary or unduly burdensome, rather than updating them to reflect current needs and realities. The CRA needs updating to reflect modern banking needs and practices.

October 16, 2015

This letter submits comments on the Community Reinvestment Act (CRA), bank mergers and acquisitions, and the Consumer Financial Protection Bureau (CFPB) as part of the prudential regulators EGRPRA process. Woodstock strongly encourages the regulators to use this opportunity to acknowledge the importance of CRA and its benefits to communities across the country, as well as identify provisions that no longer serve their original intent because of changes in the financial marketplace. Particular aspects of CRA are outdated and must be modernized to ensure that the Act is working as intended. For example, assessment areas should accurately reflect a bank’s footprint and include all geographies where a bank does substantial business. CRA exams should accurately address whether bank products, services, and practices are adequately meeting the needs of the community and include quantifiable benchmarks for banks to meet. We also support clarifications related to bank mergers and bank acquisitions, including longer comment periods, a more public process, and a true consideration of the bank’s CRA commitments and how the merger/acquisition will provide a public benefit.

September 30, 2015

This comment letter responds to the Treasury’s request for information about online marketplace lending, in particular how financial regulatory framework should evolve to support safe growth of the industry. The letter acknowledges that current online lending market has many similarities to consumer small dollar lending before many states passed regulations to limit the most abusive practices. The letter urges regulators to consider the fact that many small business owners are consumers in many respects and require the same level of protections from predatory lenders. We encourage regulators to promulgate rules including: risk retention requirements for lenders, strong underwriting and ability-to-repay requirements, and full disclosure of terms and fees. We also urge regulators to avoid creating loopholes that allow lenders to evade state or federal laws. We commend certain lenders for their recent creation of a the Small Business Borrowers Bill of Rights, but do not see self-regulation as adequate in this fast-growing market. 

August 31, 2015

This letter comments on Chase Bank’s performance under the Community Reinvestment Act. The Community Reinvestment Act requires banks to work with low- to moderate-income communities to ensure their financial needs are being met. It assesses the bank’s mortgage lending, small business lending, products and services, and community grants and investments in the Rockford MSA and the Illinois counties within the Chicago-Joliet-Naperville MMSA.  We believe that while the bank is performing well in certain areas, including community development grants and investments, and refinance loan originations, there is need for improvement. Chase should: increase its home purchase lending to bring it more in line with other banks and increase access to small business loans in low- and moderate-income (LMI) communities; reform its current overdraft policies to ensure that consumers are not unwittingly signing up for products they do not want and incurring high fees or charges; increase access to the bank’s financial services by considering municipal IDs to be an acceptable form of identification; and ensure that additional bank branches are located in LMI census tracts to more accurately reflect the total percentage of the Assessment Area population residing in those tracts.

July 20, 2015

This comment letter responds to the U.S. Department of Labor’s proposed rule addressing the definition of fiduciary and the conflicts of interest in the retirement savings market. Woodstock Institute supports the DOL’s proposed rule to clarify that financial advisers and their firms must provide advice and guidance that is in the best interest of the investor, and to avoid conflicts of interest. The letter highlights the significant changes that have taken place in the financial market since the rule was first written in 1975. The proposed changes institute important and necessary consumer protections without eliminating an adviser’s ability to receive common forms of compensation without conflicts of interest. We encourage the DOL to further strengthen the rule by banning mandatory arbitration clauses and allowing investors their right to a trial.

July 14, 2015
This comment letter responds to the Consumer Financial Protection Bureau (CFPB) request for information on student loan servicing, in particular its questions on data. The letter draws upon lessons from the Home Mortgage Disclosure Act and the National Mortgage Database in order to make recommendations on expanding public data on student loans. In particular, the letter urges the CFPB to include granularity, timeliness, borrower demographic information, borrower and co-signer financial characteristics, school characteristics, loan characteristics, and loan performance data in any expansions of public student data.
July 10, 2015
This letter comments on the New York State Department of Labor’s proposed rule addressing permissible methods of payment, specifically payroll debit cards. The letter supports the Department’s effort to ensure workers’ wages are protected by instituting strong protections for payroll cards. Specifically, the rules would: ensure workers can choose whether to use a payroll card or not; require access to a free and convenient ATM network; enable workers to access all of their wages fee-free each payroll period; and, ban payroll card issuers from charging high fees to use the cards or access wages. The comments suggest that the Department can strengthen the rules by ensuring the available ATM network is local, allowing workers to choose between electronic and paper statements, and specifying that changes for a worker who withdraws consent to receive wages by payroll card occur within two pay periods.
July 2, 2015
This comment letter responds to the U.S. Department of Education’s request for suggested revisions to its Cash Management Rule. Woodstock Institute suggests that the rule be made stronger to protect students from financial product that can negatively affect their finances. To further help students, the rule should include equal credit protections for Tier 1 and Tier 2 prepaid cards, require schools to give students free access to account history, require low opening deposit and minimum account balances, and prohibit deposit advance products.