On March 2 the Department of Labor published a proposed rule to delay for 60 days the implementation of its fiduciary rule. Woodstock has written frequently on this essential rule (see most recently our article on February 9, 2017), which requires investment advisors to put first the interests of customers rather than provide conflicted advice to make bigger commissions and profits for advisors. If the rule becomes effective, it will provide a crucial safeguard for the millions of Americans who put their trust in investment advisers as they save for retirement.
It has been a dizzying couple of weeks following the new administration’s series of actions and appointments that are likely to roll back protections for workers, retires, consumers, refugees, and others. Although Woodstock Institute is nonpartisan and has not published separate responses to each unfortunate action, appointment, tweet, and misstatement of facts, we have been working closely with allies across the country to demonstrate support for many of the well-researched policies that are under attack.
It has been a busy and productive 2016 here at Woodstock Institute. What follows is far from an exhaustive account of Woodstock’s policy and research activities over the year. It’s just a quick survey of some of the “greatest hits.”
This past year was a doozy! We made some significant progress on many fronts (see our Year in Review and below), but now much of that progress is threatened by the results of the election and the likelihood that people hostile to Woodstock Institute’s financial justice mission will be holding the reins of power. We are determined to defend and extend our progress and fight hard next year.
Governor Rauner has signed several bills that Woodstock supported during this year’s legislative session. Here’s a recap of the Woodstock-supported bills that have now become law.
Over the last couple of years, as we have witnessed a growing number of bank mergers and acquisitions (M&As), federal bank regulators increasingly have issued conditional approvals that require banks to develop and implement Community Reinvestment Act (CRA) plans. The CRA is a federal law that encourages depository institutions insured by the Federal Deposit Insurance Corporation (FDIC), such as national banks and savings associations and state-chartered commercial and savings banks, to serve the financial and credit needs of all communities in which they are chartered, including low- and moderate-income (LMI) people and communities.
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.
Accion’s mission is to revitalize communities from within through entrepreneurship. During my time with the organization, I’ve learned that the value we provide small business owners involves more than simply disbursing a loan. We provide one-on-one coaching to every applicant, whether they receive a loan or not. We work with each small business owner to increase their financial literacy, credit experience, and confidence as an entrepreneur.
Doug Heller is a consumer advocate and insurance expert who works with the Consumer Federation of America. On Twitter @DougHeller.
April 6 was an historic day for consumers. On that day, the Department of Labor (DOL) issued the so-called Fiduciary Rule. The Fiduciary Rule, which has been years in the making and has been vigorously opposed by industry, will require retirement investment advisors to act in the best interests of the consumers they are advising.
This week was the most active week in Springfield so far this year. Friday, April 8 is the deadline for bills to pass out of committee. For Woodstock and our legislative priorities, the week was mostly successful.
Leading up to and since the National Community Reinvestment Coalition (NCRC) conference in March, Woodstock Institute has been part of the surge in work on, and interest in, small business lending and Community Reinvestment Act (CRA) issues at local and national levels.