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.
June 30, 2015
This letter comments on Sallie Mae Bank’s performance under the Community Reinvestment Act. The letter urges the FDIC to hold Sallie Mae Bank accountable for poor lending and banking practices. The Community Reinvestment Act requires banks to work with low- to moderate-income communities to ensure their financial needs are being met. However, Sallie Mae Bank’s affiliation with “non-traditional” private student loans and harmful campus prepaid debit cards are leaving student consumers at risk. Sallie Mae Bank's limited CRA assessment area and history of failing all CRA evaluations highlights the need to modernize and update CRA.
April 1, 2015

This letter commends the CFPB for releasing its Safe Student Accounts Scorecard, a voluntary tool to help colleges select banking partners that will benefit students. The letter recommends that the CFPB expand the list of Safe Student Account features to include low minimum balance and opening deposit requirements, rapid funds availability, a prohibition on deposit advance products, and more; ask prospective bank partners about other products they will market to students; and document the impact of the Safe Student Account scorecard. The letter also recommends that institutions of higher education select banking partners that meet a certain set of requirements, not simply the most competitively priced account.

March 30, 2015

Woodstock Instituted submitted comments to the Consumer Financial Protection Bureau (CFPB) regarding its proposed rule to regulate the prepaid card market. Despite being one of the fastest growing payment types in the country, the industry remains largely unregulated. Woodstock commends the CFPB for proposing strong rules to ensure consumers have access to safe and affordable financial products. Though we support the CFPB’s work and believe that the proposed rules are a strong start, Woodstock encourages the CFPB to further strengthen them by: banning overdraft on prepaid cards; mandating that any credit on, or linked to, a prepaid card be fully covered by credit card laws; strengthening disclosure requirements to ensure a consumer has access to all fees in advance; increase protections for specific prepaid cards, including payroll, student loan, prison, and all government benefit cards; and, requiring that all prepaid cards have FDIC or NCUA insurance.

February 20, 2015

This letter to the Federal Reserve and the Office of the Comptroller of the Currency comments on the proposed merger between CIT Group and OneWest Bank. The merger highlights several issues that should be addressed before completed. The first issue is that the merger would create a Systematically Important Financial Institution. The second issue is that both banks lack a strong history in community reinvestment. OneWest Bank received a “low satisfactory” rating from the Community Reinvestment Act and CIT Group invests primarily in communities near its headquarters. This letter recommends against the merger of these two banks. The merger would turn CIT Group and OneWest Bank into a major financial institution, but with a poor record of investing in communities.

December 17, 2014
The Military Lending Act (MLA) sets a 36 percent rate cap on consumer credit for service members and authorizes the Department of Defense to define “consumer credit.” The existing definition is narrow and allows high-cost lenders to continue to target service members. This letter supports new proposed rules that expand the definition of “consumer credit” to include all forms of credit subject to the Truth in Lending Act and not excluded by the MLA. The letter also urges the Department to include overdraft programs and rent-to-own transactions in its definition of consumer credit.
November 6, 2014

This letter to prudential financial regulators urges them to strengthen their proposed revisions to the Community Reinvestment Act (CRA) Questions and Answers (Q&As) regarding retail banking and community development in order to ensure that financial institutions adequately meet the needs of low- and moderate-income (LMI) people. The letter asks the regulators to incorporate principles about the retail financial services needs of LMI consumers into the retail CRA Q&As, assess the extent to which retail products and services offered by financial institutions are actually adopted by a broad range of LMI consumers, recognize the importance of full-service branches in meeting LMI community needs, banks to offer safe and affordable small dollar loan products or secured credit cards to meet LMI consumers’ need for emergency credit, penalize banks for undermining LMI people’s access to the banking system, and allow CRA credit only for products and services adopted by LMI people in the bank’s assessment area

October 29, 2014
This letter commends the Consumer Financial Protection Bureau (CFPB) for proposing rules that expand the reporting requirements for the Home Mortgage Disclosure Act (HMDA). The letter urges the CFPB to further strengthen the rules by separately reporting cash-out and rate- and term-refinances, requiring that lenders report data on the credit scores of borrowers to the CFPB and, including multifamily loans in the reporting requirements for depository institutions, and requiring existing and future HMDA data to include a Universal Loan Identification indicator that would potentially allow the data in the new performance and modification databases to be linked with HMDA data.
October 28, 2014
This letter to the Federal Housing Finance Agency affirms the importance of creating strong affordable housing goals for Fannie Mae and Freddie Mac to promote access to mortgage credit for lower-wealth borrowers. It urges the FHFA to strengthen the affordable housing goals by adopting recommendations from the National Community Reinvestment Coalition regarding the legality of FHFA’s three proposed evaluation methods, the Agency’s estimated size of the low- and moderate-income (LMI) mortgage market and market for communities of color, the absence of demographic considerations in the financial model used to calculate FHFA’s market projections for LMI communities and communities of color, and FHFA’s conclusion that LMI borrowers and borrowers in communities of color will significantly decline over the next three years.
September 15, 2014
This letter supports a proposal from the CFPB to publish consumer complaint narratives as part of its public consumer complaint database. The letter urges the CFPB to strengthen the proposal by providing more information to users when asking for their consent to publish their narrative; publishing responses from financial institutions in as much detail as possible; including more granular geographic data; and allowing complaint filers the option of publishing information on race, ethnicity, gender, and age.
May 28, 2014

This letter urges the Department of Education to strengthen the debt-to-earnings test that assesses whether for-profit colleges are adequately preparing graduates for gainful employment. It recommends that the Department revise the debt-to-earnings metrics so that they accurately depict graduates’ debt burdens, clarify how performance will be measured, and limit opportunities for exploiting loopholes.

February 27, 2014

This letter urges the Office of the Comptroller of the Currency (OCC) to consider how the proposed acquisition of Chicago Charter One branches by U.S. Bank would create a public benefit, especially to traditionally underserved low- and moderate-income communities and communities of color. The letter asks the OCC to approve the acquisition on the condition that U.S. Bank increase home mortgage lending in traditionally underserved areas to meet or exceed peer lending levels, maintain or increase the combined levels of community development investments and grants currently made by both financial institutions, and maintain or increase the number of branch locations in LMI and minority census tracts. The letter commends both institutions for strong track records of lending to small businesses.

November 12, 2013

This letter urges the Federal Reserve Bank of St. Louis to carefully consider how the proposed acquisition of Midland States Bancorp, Inc. to acquire Heartland Bank would create a public benefit, especially for low- and moderate-income (LMI) communities and communities of color that historically have been denied access to financial services. The letter raises concerns that Midland States Bank is not currently meeting the needs of LMI communities and communities of color and requests that the Federal Reserve Bank of St. Louis delay approval of the acquisition until a clear public benefit can be shown and the fair lending complaint filed against the bank by the Metropolitan St. Louis Housing Opportunity Council is resolved by the Department of Housing and Urban Development.

October 30, 2013
This joint letter urges regulators to reconsider the current definition of qualified residential mortgage (QRM) and the unintended restriction of access to mainstream mortgage credit being mandated by regulation.
October 28, 2013
This letter expresses concerns about the proposed acquisition of Cole Taylor Bank by MB Financial, Inc. It analyses the banks' mortgage lending record and asks the Federal Reserve Bank of Chicago to set targets for the merged institution to improve Cole Taylor's lending record to borrowers of color and low- and moderate-income borrowers as a condition of approval of the acquisition.
October 28, 2013
This comment letter to federal regulators supports re-proposed interagency rules implementing the credit risk retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It urges regulators to support the qualified residential mortgage (QRM) rule's updated structure, which will protect both consumers and investors by promoting high-quality underwriting while not overly limiting credit in an already-tight credit market. The rule's proposed alternative definition imposes unnecessarily strict underwriting requirements for the QRM that would risk overly restricting credit availability, particularly for low-wealth homebuyers and homebuyers of color.
September 17, 2013

This comment letter supports the proposed improvements to regulations that carry out the Fair Housing Act’s requirement to ensure that all federal agencies administer their programs relating to housing and community development in a manner that affirmatively furthers fair housing.  It urges HUD to strengthen the rule by creating an appeals process for Assessments of Fair Housing, requiring program participants to consider regional fair housing needs, and improving transparency of fair housing goals. 

August 2, 2013

This comment letter encourages the Department of Defense to expand the Military Lending Act (MLA) to ensure that service members and their families are protected from all forms of high-cost credit. Passed in 2007, the MLA instituted a 36 percent annual percentage rate (APR) cap for certain kinds of payday loans and auto title loans. A number of states, including Illinois, have high-cost loan products that fall outside the boundaries of the MLA. This means the 18,000 active duty  service members in Illinois are still being marketed products with triple digit interest rates. We encourage the DoD to expand the military APR cap to all consumer credit products covered by the Truth in Lending Act as well as overdraft programs and rent-to-own transactions.

July 1, 2013

Sign on letter urging Sen. Mark Kirk to vote for Richard Cordray's nomination as head of the Consumer Financial Protection Bureau. Sen. Kirk previously voted against moving Cordray's nomination forward and has signed a letter indicating he will oppose the confirmation. A vote against Cordray is a vote for fewer protections for Illinois consumers. Without a director the CFPB will not have the authority to rein in some of the worst actors in the financial industry. 

May 30, 2013

This comment letter supports proposed guidance from the OCC and FDIC regarding bank deposit advance products, which are functionally equivalent to payday loans. The letter also recommends that the OCC and FDIC institute an annual percentage rate cap, require APR disclosure, prevent mandatory automatic repayment, and strongly enforce the guidance. Eighteen organizations signed on to the letter.

May 17, 2013

This letter to the Federal Reserve, OCC, and FDIC supports several provisions of the Interagency Q&A Regarding Community Investment, including additional ways to determine low- and moderate-income status of community development recipients, recognition of nonprofit board service, and clarifications on qualified investments and community development lending. The letter notes concerns about the Q&A's proposed changes to the weights on community development lending. The letter also identifies several areas where CRA needs to be updated, including expanding assessment areas to where an institution has market share, creating a community development test, and making the services test more rigorous.

April 8, 2013

Woodstock Institute's response to the Consumer Financial Protection Bureau's request for information on promoting affordability in the private student loan market. The letter describes the growing need for better options to help private student loan borrowers avoid defaulting on their loans and summarizes key principles that should be included in any affordability program, drawing upon lessons learned from mortgage modification programs.

March 13, 2013

Sign-on letter Sen. Mark Kirk asking him to confirm Richard Cordray as Director of the Consumer Financial Protection Bureau. Delaying his confirmation because of political brinksmanship would harm consumers, introduce destructive uncertainty into the financial system, and allow predatory financial practices to flourish.

July 23, 2012

Woodstock Institute response to the Consumer Financial Protection Bureau’s Advanced Notice of Proposed Rulemaking on general purpose reloadable cards. Comments address three main areas of consumer protection that the Consumer Financial Protection Bureau should address as part of its rulemaking process: the regulatory coverage of products; product fees and disclosures; and, product features. Woodstock requests that Regulation E be extended to all GPR cards and the FDIC insurance be required. Woodstock also recommends that credit products, such as overdraft or deposit advance products, be prohibited.

June 29, 2012

Woodstock Institute response to the Consumer Financial Protection Bureau's request for information on overdraft protection programs describing challenges to developing low-cost alternatives to overdraft programs, the need to develop an overdraft guidance specific to the payment channel used to overdraft, and the importance of placing regulatory limitations on repeat usage of overdraft programs.

November 7, 2011

Woodstock Institute comments submitted to the OCC opposing the application and requesting an extensions of the comment period by 60-days. The letter also requests that the OCC hold five public hearings to permit the public adequate opportunity to discuss serious concerns about this transaction.

August 1, 2011

Comments submitted by Woodstock president Dory Rand to the Federal Reserve Board in response to a proposed rule for a Qualified Mortgage or QM. The comments support an obligation to verify, not just consider, the additional criteria. In addition, the comments request that underwriting be based on the maximum interest rate for the entire loan, not just the first five years.

June 28, 2011

This comment letter describes Woodstock Institute concerns with the application of automated overdraft consumer protections to deposit advance loan products or "bank-based payday loans." Woodstock argues that these types of product are fundamentally different from automated overdraft, has associated payment and reputational risks that exceed the scope of the proposed guidance, and requires substantially different consumer protections.