As I look at the current landscape in search of barriers to economic security and community prosperity and for opportunities to create effective solutions to those problems, I am excited about the year ahead and about using Woodstock Institute’s applied research, policy analysis, and coalition-building skills to reduce inequality and to increase equitable lending and investments in under served low- and moderate-income (LMI) areas and communities of color, help people and communities build and preserve wealth; and improve access to safe and affordable financial products, services, and systems.
Woodstock will continue to work at local, state, and national levels in 2016 in partnership with existing and new allies. While we will continue to provide extensive regional and Illinois data and technical assistance through our data portal and TA program, we will also use some of the lessons learned from our local data analysis and advocacy efforts to influence developments in other states and at the federal level. Here are some of the highlights of our 2016 policy agenda:
Small Business Lending
Woodstock is building on our 2014 report entitled DisCredited, which documented lack of access to traditional loans to small businesses in LMI areas and communities of color in the Chicago region, by partnering with allies including National People’s Action, Main Street Alliance, California Reinvestment Coalition, Accion Chicago, National Community Reinvestment Coalition (NCRC), the Small Business Majority, and others. We will conduct additional research on business lending in other regions, urge the Consumer Financial Protection Bureau (CFPB) to issue strong rules for small business data collection under Dodd-Frank Act section 1071, advocate with state and federal policymakers for effective oversight of predatory online lenders, hold banks accountable for entering into third party relationships with predatory small business lenders, and encourage mainstream banks to make significant investments and traditional small business loans in underserved communities. Community Development Financial Institutions (CDFIs) such as Accion Chicago, Opportunity Fund in California, and others across the country are seeing more and more small business owners becoming trapped in high-cost online loans from unregulated non-bank lenders. The lack of access to traditional loans and reliance on predatory loans destroys businesses, jobs, and LMI communities that are in most need of jobs and economic development.
In addition to holding banks accountable for small business lending and encouraging investments in CDFIs and others, Woodstock will build on the financial reform recommendations we made in comments on Community Reinvestment Act (CRA) Q&As and at the October 2015 Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) hearing in Chicago, continue to monitor bank mergers and acquisitions (M&A), and advocate with banks to fully meet their obligations under CRA to serve the banking and credit needs of LMI people and areas through branch and ATM networks, mortgage and small business lending, community development grants and investments, and safe and affordable retail banking products and services. We expect to see an increase in M&A activity and opportunities for communities to enter into community benefit agreements to ensure that M&As provide a public benefit and do not result in fewer services for underserved communities. We will continue to engage with banks and regulators to enforce high CRA and safety and soundness standards.
Wealth Creation through Retirement Savings and Home Ownership
Woodstock will work with NCRC on issues relating to the Federal Housing Finance Administration (FHFA, the conservator of Fannie Mae and Freddie Mac, the “government-sponsored enterprises” or GSEs) regarding GSE reform, and the importance of maintaining affordable housing goals, Affirmatively Furthering Fair Housing, the “duty to serve,” and opportunities for LMI borrowers and borrowers of color to achieve the American Dream of home ownership. We will continue to press for modernizing and expanding the credit scoring systems used to determine creditworthiness of mortgage applicants to include new models such as VantageScore Solutions that use additional data points to qualify millions more creditworthy home buyers from LMI areas and communities of color. At the state and regional levels, we will work with allies to support housing counseling and creation and preservation of safe and decent affordable housing. We will publish a report on implementation of Chicago’s vacant property ordinance, and document lessons learned from creation of the Circuit Court of Cook County foreclosure mediation program.
Worker Economic Security and Consumer Protection
Building off a successful convening of Ford Foundation grantees last October in Chicago, Woodstock will continue to work at the intersection of financial justice and workforce justices issues to improve the quality and reliability of work so that workers can count on predictable income streams to make ends meet, protect wages, have benefits that allow them to stay healthy and meet family needs, and save for the future without resorting to predatory loans. Some of the issues affecting job quality that also impact worker economic security that we will focus on include: living wages, volatile work schedules, paid leave, unfair wage assignments, employer background and credit checks, and employer-based lending and savings programs.
Low-wage workers, people of color, and the elderly are among consumers most likely to be caught up in unsafe and unaffordable financial products and services. As the CFPB implements its consumer protection agenda, Woodstock will use our research and advocate with coalition partners regarding CFPB rules on topics including: payday and payroll loans; debt collection; auto title and installment loans; forced arbitration and waiver of class action rights; and overdraft. At the state level, we will oppose auto insurance price optimization schemes, support wage assignment reforms, and explore the new versions of “debtors’ prison.” We will work with allies on age-friendly banking and elder financial abuse issues.
Woodstock will continue to participate with the Consumer Interest Group of the Federal Reserve Systems’ Faster Payments Task Force, which is developing criteria for a future system in which people can send and receive payments much more safely, easily, and quickly than our current system. The task force has included in its recommendations most of the Consumer Interest Group’s recommendations regarding serving needs of unbanked and vulnerable consumers, handling disputed payments and fraud, compliance with consumer protections, and fair disclosures. Our concerns regarding overdraft will continue to be a key topic in subsequent phases of the task force.