The Department of the Treasury recently released its third report card on how mortgage lenders are doing modifying loans for eligible homeowners under the government’s Making Home Affordable program (see the first and second report card).
As early as today the U.S. House Financial Services will vote on a bill aimed at reforming our nation’s troubled financial system by creating a Consumer Financial Protection Agency. This agency would do the same thing for financial products that the Food and Drug Administration does for medical safety and the Consumer Products Safety Commission does for products like toys and electronics: set common sense rules to keep institutions from peddling bad mortgages and loans that destroy families’ financial futures. The Consumer Financial Protection Agency could have headed this financial crisis off at the pass by preventing millions of mortgages with wildly adjustable rates and exploding payments from ever entering the market.
The Chicago Tribune recently reported on American Union Savings & Loan Association’s objection to receiving a poor rating under Community Reinvestment Act (CRA) from the FDIC, its regulator. American Union’s claim—that “reckless lenders attract [mortgage] applications and get favorable CRA ratings [and] these applications turned into bad loans”—is one that has been widely discredited by banking regulators and researchers.
Today, the House Financial Services Committee deliberates over crucial provisions in the Consumer Financial Protection Agency (CFPA) Act. One of these is an amendment, proposed by Rep. Melissa Bean (D-IL), that would stop states from enforcing their own consumer protection laws if they’re stronger than federal laws, turning the CFPA into a ceiling, not a floor.
As the debate on financial services reform continues in Washington, a new report finds that key decision makers in Congress have received sizable donations from the very industry they are seeking to reform.
President Obama’s Home Affordable Modification Plan (HAMP) is slowly reaching troubled homeowners—almost 500,000 borrowers have been offered trial loan modifications as of September 30. But, according to a new report from the Congressional Oversight Panel (COP) charged with evaluating foreclosure prevention, one in eight mortgages are currently in foreclosure or default and 250,000 foreclosures are initiated each month.
If we hadn’t been waiting for a decade to see regulators and banks take consumer protection seriously, then their recent moves might be welcomed more enthusiastically. Instead, we view the recent efforts by regulators and banks to embrace consumer protection as cynical attempts to undercut the growing movement for consumer protection and financial reform.
Mortgage loan modifications, like those under the Home Affordable Modification Program (HAMP), that reduce monthly payments are more likely to be sustainable in the long term than earlier modifications, according to the latest Mortgage Metrics Report from the OCC and OTS.
As efforts to curb overdraft abuse gain traction in the Senate, Bank of America, Chase, and Wells Fargo last week announced a kinder, gentler bounced check loan – but are these changes enough to fend off sweeping reforms? And will banks and regulators finally provide consumers with the full disclosure they need to make an informed decision?
In our fragmented regulatory system, agencies charged with overseeing banks lowered consumer protection standards in the interest of self-preservation, even as whole segments of the financial industry went unsupervised.
Illinois Attorney General Lisa Madigan moderated a community round table at Family Counseling Service of Aurora to discuss struggles with predatory lenders, consumer credit malfeasance and the fallout from the economic crisis here in Illinois and across the nation.
The Department of the Treasury recently released its second report card on how mortgage lenders are doing modifying loans for eligible homeowners under the government’s Making Home Affordable program (see the first report card).
A common banking industry argument against the Consumer Financial Protection Agency (CFPA) is that the agency would restrict consumer choice. According to a new poll from the Consumer Federation of America (CFA), Americans have already made a choice: they want more financial protections—and a new federal agency to enforce them.
If most people made rational decisions to maximize their self-interest, as predicted by traditional economists, then everyone would have an emergency fund, accumulate adequate retirement savings, avoid payday loans, and be financially secure. The reality, as demonstrated by the growing research in behavioral economics, is that we often make emotional, short-sighted, and self-defeating financial decisions.
Think back to the last contract you signed. Did you read it all the way through? Even if you did, did you fully understand all of it? If not, you’re not alone. Recent research shows that consumers often rely on conversations with salespeople more than the content of a contract, a process which we believe has encouraged the development of deceptive-by-design financial products accompanied by incomprehensible fine print.