Higher education has long been one of the keys to attaining the American Dream; however, skyrocketing student debt has turned the dream into a nightmare for many in our country. With challenges ranging from deficient student loan servicing to predatory for-profit colleges, millions of borrowers need help as they struggle to pay off their loans. Rohit Chopra, the Consumer Financial Protection Bureau’s (CFPB) Student Loan Ombudsman, stands out as a leader in student debt reform.
The Consumer Financial Protection Bureau (CFPB) proposed regulations for the prepaid card industry in December 2014 and accepted public comments through March of 2015. Woodstock commented that these rules are generally strong and will help keep consumers safe in this growing industry, but we believe that the CFPB can strengthen the rules by expanding protections in several areas.
Millions of Illinois workers struggle to build retirement savings. The tides started to change when former Governor Pat Quinn signed the Illinois Secure Choice Savings Program into law. Private sector employers with 25 or more employees who do not offer a retirement savings option will automatically enroll workers into the Secure Choice plan. Employees will fund their Roth IRA accounts through payroll deductions. This achievement could not have been accomplished without the dedicated work of Heartland Alliance for Human Needs and Human Rights, a leader in the Secure Choice campaign. Secure Choice’s influence is growing across the country.
For many college students, selecting a bank account is one of their first experiences with the financial system. With so many options, students may rely on their college for guidance on which bank account would best meet their needs. It’s easy for students to choose the bank that gives out freebies in the dining commons, puts the college logo on bank marketing materials, or can activate an account using their student ID cards.
Sen. Dick Durbin (D-IL) reintroduced the “Protecting Consumers from Unreasonable Credit Rates Act” on Tuesday to protect borrowers of high-cost, short-term loans from usurious interest rates. The exploitative practices of many payday lenders leave consumers in financial ruin. Woodstock Institute and partners from across the country have been pushing for decades for stronger regulations of high-cost, short-term loans to prevent high interest rates and practices that exploit the financially disadvantaged.
This Women’s History Month, we at Woodstock Institute are reflecting on how women are still at a disadvantage in the areas of income and wealth and what can be done to address that disparity. One of the common ways in which people build assets is by purchasing a home. Woodstock Institute’s research has shown that women are at a distinct disadvantage in obtaining mortgage credit. The Unequal Opportunity report found that applications from women were less likely than applications from men to be originated and that female-headed joint applications were less likely than male-headed joint applications to be approved. We are completing follow-up research which includes a look into whether certain neighborhoods experience more gender disparities in access to mortgage credit than others and suggestions for policy and practice solutions to expand women’s access to mortgage credit.
It’s that wonderful time of year. No, I’m not talking about dyeing the Chicago River green or March (hoops) Madness. It’s time for the annual National Community Reinvestment Coalition conference!
In an important move against deceptive and abusive debt collection tactics, the U.S. Department of Education severed ties with Pioneer Credit Recovery, Navient’s debt collection arm, and four other debt collection agencies. Woodstock Institute applauds the Department of Education for ending its relationships with debt collectors that mislead students about their options.
Consumers are increasingly using prepaid cards as an alternative to cash or checking accounts, but the market remains widely unregulated. The Consumer Financial Protection Bureau (CFPB) released proposed rules to protect consumers from harmful prepaid cards.
Having administered a large-scale financial education program and evaluation back in 2001-2003, I read with interest CFPB's recent "Financial well-being: The goal of financial education" report in preparation for the Consumer Advisory Board public meeting on February 19. I wasn't surprised that a key finding is that "factual knowledge in and of itself is not sufficient to drive behavior or behavior change." The authors astutely framed the discussion as being about not only financial knowledge, skills, and execution, but also about fostering an environment where people have the opportunity to develop and exercise those skills.
The Consumer Financial Protection Bureau (CFPB) is coming under fire in Congress. The CFPB supervises the activities of banks with over $10 billion in assets. The “Consumer Financial Protection Bureau Examination and Reporting Threshold Act of 2014” would change the CFPB “big bank” threshold from at least $10 billion in assets to at least $50 billion in assets, decreasing the number of banks the CFPB currently supervises by two-thirds. The Dodd-Frank Act gave the CFPB authority to supervise the largest banks in the United States, but changing the threshold would make a big impact on the number of banks the CFPB monitors and an even bigger impact on the number of consumers the CFPB could protect.
The Consumer Financial Protection Bureau (CFPB)’s student loan team, led by Rohit Chopra, won two major victories for student borrowers over the past week. New guidance encouraging private student lenders to make loans more affordable will set up more borrowers to succeed, even when they are un- or underemployed. An agreement that includes significant debt relief for students who received predatory loans from a poorly-performing for-profit college will give thousands of students a fresh start to seek out a better education.
When then-governor Pat Quinn signed the Secure Choice retirement savings bill into law in January, reporters and policy wonks across the country took notice because the Illinois program could become a model for other states and the federal government.
President Barack Obama recently proposed to remove a major tax benefit from 529 accounts, which millions of families use to save money for college. The account name, 529, refers to section 529 section of the Internal Revenue Code. According to a New York Times article, experts say these tax-advantaged accounts primarily benefit affluent families. Altogether, seven million families are using 529 plans and have saved $217 billion. The article notes that families with an income of over $200,000, which puts them in the top 6 percent of the population, hold 70 percent of 529 accounts. The president’s proposal would have replaced all current college savings tax preferences with a single tax credit that would be more widely available to middle-class families, but that proposal had no chance of passing this Congress. Due to public pressure, President Obama withdrew his proposal to remove tax benefits from 529 accounts. While Woodstock Institute applauds President Obama for trying to make college more accessible for the middle class, there is much more that can be done.
This post originally appeared on Civic Tech Voices
At Woodstock Institute, our mission is to advance economic justice, particularly for low-wealth communities and communities of color. To move towards this goal, we prepare data concerning economic justice and empower others to use and understand it. As our national partners at the National Community Reinvestment Coalition say, data drive the movement.