Federal Banking Regulatory Reform - Blog Posts

September 8, 2011

As you may know, Capital One recently applied to regulators to acquire ING Direct. The deal would create the fifth-largest bank in the country and raises substantial concerns about how the deal would impact communities.
 

August 22, 2011

One of the exciting aspects of the Consumer Financial Protection Bureau (CFPB), which opened its doors on July 21, is that we finally have a federal regulator for non-bank financial institutions, like independent mortgage lenders and payday lenders. But the CFPB will not have the authority the regulate other non-bank financial institutions, like consumer finance companies, debt settlement companies or prepaid card providers unless it finds that they are larger participants in the market. It’s heartening to see that one of the CFPB’s first orders of business is to define the scope of non-bank financial institutions it will regulate so it can get to work protecting consumers regardless of where they conduct their financial business.

August 9, 2011

The CFPB is soliciting a third round of comments on its Know Before You Owe project to simplify disclosure forms used in the mortgage process.  The agency last week extended the deadline to this Wednesday.

July 21, 2011

I tend to be a “glass half full” optimist, so I’m pretty happy about the launch of the Consumer Financial Protection Bureau (CFPB) on July 21. Having a regulator that looks out for the interests of consumers is definitely something to celebrate.

July 8, 2011

We’ve been pushing for stronger protections on overdraft protection loans for years, and the Office of the Comptroller of the Currency (OCC), a federal bank regulator, recently released a proposed guidance that would eliminate some of the worst features of overdraft programs-such as ordering transactions to maximize fee income.  However, the proposed rule has a glaring flaw—it puts  bank-based payday loans, also known as deposit advance loans, in the same category as overdraft loans. Bank payday loans and overdraft loans are entirely different beasts—they’re structured differently, used for different purposes, and have different risks. The two products need regulations tailored to their unique characteristics. We recently submitted our comments on these rules; you can send regulators your thoughts until August 8, 2011.

June 28, 2011

When it takes a long time to create a problem, it often takes even longer to fix it. In Black Wealth/White Wealth: A New Perspective on Racial Inequality, Melvin L. Oliver and Thomas M. Shapiro illustrated how various American tax, property and financial policies and practices precluded generations of African Americans from building wealth and created intergenerational poverty, the effects of which continue to reverberate today. The gains that some African Americans and other people of color made in wealth creation through home ownership, small business development and educational attainment during the late 1990s and early 2000s were all but wiped out by ongoing the financial and foreclosure crisis. If left unaddressed, the racial wealth gap will continue to grow.

April 1, 2011

Debt protection and credit insurance are high-cost, low-value products that are poorly understood by consumers and inadequately monitored by regulators. The new Consumer Financial Protection Bureau created by the Dodd Frank Wall Street Reform and Consumer Protection Act should shed some light on these often shady products.

March 17, 2011

Efforts in the U.S. House of Representatives to eliminate or cut funding for federal programs and agencies designed to protect homeowners, consumers, and investors reflect the same flawed thinking that former Federal Reserve Chairman Alan Greenspan admitted was wrong when he testified before Congress in October 2008. Greenspan, a longtime champion of deregulation, said that he had been mistaken to put so much faith in the self-correcting power of free markets and that he had failed to anticipate the foreclosure and economic crisis that such deregulation ultimately generated.

February 22, 2011

Debate is brewing across the country about what shape our housing finance system should take in the years to come. As consumer advocates, we need to ensure that the system that emerges from these discussions meets the needs of  low-wealth people seeking affordable and sustainable housing.
The new housing finance system must support broad access to the products that made home ownership, the primary means of building wealth for many Americans, a reality for communities that otherwise would have been overlooked. It’s worth noting that, from the aftermath of the Great Depression to the beginning of the new millennium, government-sponsored entities (GSEs) like Fannie Mae and Freddie Mac ensured the flow of responsible credit to underserved communities and considerably expanded homeownership opportunities.

December 9, 2010

Credit-default swaps. Derivatives. Collateralized debt obligations. Mortgage-backed securities. How many people on the street do you think could accurately define these terms? These financial “innovations” play a critical part in the story of the financial crisis, but average Joes—even above-average Joes—struggle to understand the role these instruments played. At our screening and discussion last week of “Plunder: The Crime of our Time,” journalist Danny Schechter proposed a framework for discussing the financial crisis that relies less on financial wonkery and more on a moral narrative.

August 25, 2010

The predatory subprime lending crisis devastated families and communities across Chicago and the nation, particularly low-wealth communities and communities of color.
A crucial tool to fight discriminatory and predatory lending is the Home Mortgage Disclosure Act (HMDA). HMDA requires mortgage lenders to provide detailed reports of their lending to regulators and the public. Woodstock Institute uses HMDA data to track discriminatory lending practices, study patterns of community investment, and hold individual banks accountable for their lending practices.

August 18, 2010

Community leaders turned out in force at the Community Reinvestment Act hearing held at the Federal Reserve Bank of Chicago on August 12 (see photos). The Chicago hearing was the third of four such hearings being held by federal banking regulators this summer to discuss whether and how to revise rules implementing the CRA’s requirement that federally insured depository banks meet the credit and financial services needs of the communities in which they operate, including low- and moderate-income communities, consistent with safe and sound practices. The CRA became law in 1977 and current CRA rules have not been updated since 1995.

August 17, 2010

As bank regulators take a close look at modernizing the Community Reinvestment Act (CRA) through a series of hearings and public comment period, we’re walking you through some key reasons why CRA must be updated. Last week, we explained how assessment areas don’t fully capture where a bank does business (see the discussion at Huffington Post). Today we’ll explain how CRA applies only to a fraction of the financial industry and why communities need a broader CRA to ensure that all financial institutions are offering safe and sustainable products where they do business.

August 17, 2010

As bank regulators take a close look at modernizing the Community Reinvestment Act (CRA) through a series of hearings and public comment period, we’re walking you through some key reasons why CRA must be updated. Last week, we explained how assessment areas don’t fully capture where a bank does business (see the discussion at Huffington Post). Today we’ll explain how CRA applies only to a fraction of the financial industry and why communities need a broader CRA to ensure that all financial institutions are offering safe and sustainable products where they do business.

August 16, 2010

You can still make your voice heard on the need to improve the Community Reinvestment Act, even if you were not able to attend last week's hearing on CRA modernization at the Federal Reserve Bank of Chicago.

August 6, 2010

With the passage of the Dodd-Frank Act, consumers will now have a Consumer Financial Protection Bureau to monitor and regulate potentially abusive financial products. It will be equally important, however, to ensure that all communities have equitable access to responsible and fairly priced products and to eliminate the bad ones. The Community Reinvestment Act (CRA) has been an effective tool to encourage the provision of affordable financial services, but it must be updated to reflect the realities of today’s rapidly-changing financial landscape.

August 6, 2010

With the passage of the Dodd-Frank Act, consumers will now have a Consumer Financial Protection Bureau to monitor and regulate potentially abusive financial products. It will be equally important, however, to ensure that all communities have equitable access to responsible and fairly priced products and to eliminate the bad ones. The Community Reinvestment Act (CRA) has been an effective tool to encourage the provision of affordable financial services, but it must be updated to reflect the realities of today’s rapidly-changing financial landscape.

August 5, 2010

People with disabilities, advocates, and government officials recently celebrated the 20th anniversary of the Americans with Disabilities Act (ADA) at the White House. While acknowledging that much progress has been made, participants agreed there is still a long way to go to achieve inclusion and opportunities for the one in five U.S. residents who have disabilities—that’s 54 million people, including 7 million who receive federal Supplemental Security Income (SSI) benefits.

July 29, 2010

As Woodstock President Dory Rand noted, there is still much left to be done to ensure a fair and equitable financial system, even though the Dodd-Frank Act is now law. One major step is to modernize the Community Reinvestment Act (CRA) so that all financial institutions are serving the entirety of communities in which they do business. The Chicago area has an opportunity to influence this process on August 12, when the Federal Reserve will be holding a hearing to consider CRA modernization. It is critical for regulators to hear from a large variety of organizations about why we must ensure that good products are available in every community – including low-wealth communities and communities of color.

July 27, 2010

Now that President Obama has signed the Dodd-Frank Act (DFA) into law, what’s next? The media are currently obsessed with whom the President will select as the first director of the new Consumer Financial Protection Bureau (we agree it must be a strong CFPB director with a pro-consumer track record), but there is much more on the horizon.

July 19, 2010

Woodstock Institute applauds the passage of the Dodd-Frank financial reform bill, which represents the most dramatic and pro-consumer overhaul of the financial system in 70 years. The bill, which President Obama is expected to sign soon, will stabilize the financial system, prevent the need for future bailouts, and create a new Consumer Financial Protection Bureau (CFPB) to guard against unfair and deceptive products and practices.

June 30, 2010

Thanks to your support, House and Senate conferees have passed a strong financial reform bill (read the summary and full text) that will protect consumers and introduce transparency to the financial system. The bill now goes to the full House and Senate for consideration. These reforms are major steps towards preventing another crisis and creating a sustainable financial system where all consumers can safely borrow and save for a brighter future.

June 16, 2010

In a Washington Post article entitled “From the oil spill to the financial crisis,” U.S. Court of Appeals Judge and author Richard Posner described some of the reasons why we don’t adequately prepare for risks. Regarding the financial crisis, for example, he said,

June 15, 2010

As unemployment continues to remain high, we must look for ways to allow small businesses to expand and create jobs. Small businesses are engines for job creation—they create 80 percent of new jobs—but the recession has taken a toll on small business owners’ ability to access the credit they need to expand their businesses. A number of initiatives have the potential to increase small business lending to sound borrowers.

June 11, 2010

After Le-Eunice L'Minggio paid a $1,200 down payment and got a financing plan approved for a $8,000 car from Thrifty Car Sales in Melrose Park, IL, she thought that was the end of negotiations on her loan terms. However, USA Today reports, she got a strange call a few days later. The dealership’s finance manager told her she would have to lie to the finance company about her financial situation in order to get a loan. L’Minggio refused and returned her car, but couldn’t get her down payment back. She went to court and won $13,200 in damages, but when her lawyer went to collect, the dealership was out of business.

June 11, 2010

After Le-Eunice L'Minggio paid a $1,200 down payment and got a financing plan approved for a $8,000 car from Thrifty Car Sales in Melrose Park, IL, she thought that was the end of negotiations on her loan terms. However, USA Today reports, she got a strange call a few days later. The dealership’s finance manager told her she would have to lie to the finance company about her financial situation in order to get a loan. L’Minggio refused and returned her car, but couldn’t get her down payment back. She went to court and won $13,200 in damages, but when her lawyer went to collect, the dealership was out of business.

June 8, 2010

While strong financial reform bills have passed the House and the Senate, the fight for meaningful reform is not over. This Thursday, House and Senate conferees are slated to start negotiations on the final version of the bill.
We need your help to make sure that the consumer financial protection agency that emerges from the conference is strong and independent, covers all financial products, and sets rules that are a floor, not a ceiling.

May 21, 2010

Woodstock Vice President Tom Feltner joined Sen. Dick Durbin (D-IL) at a press conference to announce the passage of the Senate financial reform bill. Sen. Durbin, along with representatives from the Illinois Main Street Alliance, the Illinois Restaurant Association, Illinois PIRG, and the Chicago Federation of Labor, explained how the financial reform bill will help our communities recover and prevent another devastating financial crisis. For example, limits on the fees credit card companies charge small businesses will help small businesses invest in expansion and job creation. Another provision protects taxpayers from funding another bank bailout. Woodstock applauds Sen. Durbin on his leadership on financial reform.

May 21, 2010

Woodstock Institute applauds the Senate for taking a bold stand on behalf of America’s consumers. The Restoring American Financial Stability Act passed last night lays the groundwork for a healthier financial system that will hold banks accountable, protect consumers, and be more transparent—and, ultimately, help prevent another devastating financial crisis.

May 20, 2010

Now that the U.S. Senate has voted to limit further debate on the financial reform bill (S. 3217), there are less than 30 hours left to debate and vote on remaining amendments. The National Community Reinvestment Coalition has summarized the some of the critical areas that still need to be addressed.

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