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Woodstock Developments

A monthly update on new research, analysis, and advocacy from Woodstock Institute

July 21, 2011

 

From the President: Consumers and lenders both better off with fully functioning CFPB

Dory Rand 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.

The “half empty” part that tempers my celebration is the fact that, due to Senate Republican statements that they will refuse to confirm any person nominated by the President to head the CFPB, the President delayed his nomination until this week and passed over Elizabeth Warren, nominating Richard Cordray instead.

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Related: What a Qualified Residential Mortgage is and how it could affect access to credit for communities of color

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Ald. Dowell, Mayor Emanuel move to address Chicago’s $36 million troubled, vacant property problem

A proposed ordinance, sponsored by Ald. Pat Dowell, Ald. Bob Fioretti, and Ald. Ray Suarez and supported by Mayor Rahm Emanuel that passed out of committee July 20, promises to hold mortgage servicers accountable for the nearly 1,900 vacant properties stuck in the foreclosure process–a problem that we estimate can cost the city approximately $36 million.

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More welcome protections for overdraft loans, but not enough for bank payday loans

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.

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Proposed state, national bills regulating rent-to-own stores fail to sufficiently protect consumers

Legislation that would regulate rent-to-own stores has popped up in Illinois and in D.C., but neither bill has strong enough protections for consumers of this extremely high-cost service. The national legislation is particularly harmful—it would prohibit stores from disclosing the interest rate on rent-to-own transactions and preempt stronger state laws. On the eve of the launch of the Consumer Financial Protection Bureau, these industry-backed bills remind us why we badly need a strong consumer watchdog with the authority to regulate financial transactions that occur outside of traditional banks.

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Now Hiring: Vice President, Applied Research

Are you fluent in public data, passionate about economic justice, and looking for opportunities to influence local and national policy? Apply to be Woodstock Institute's Vice President of Applied Research.

The Vice President for Applied Research designs and conducts applied research projects related to fair lending, wealth creation and financial services reform issues that impact lower-wealth persons and communities of color; collaborates with local and national colleagues; convenes regional coalitions; makes presentations and conducts communications, media and advocacy outreach; supervises other staff researchers and interns; and, plays a major role in foundation, corporate and contract fundraising. The VP is a member of the senior management team and reports to the President.

Deadline: July 31, 2011

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New at Regional Home Ownership Preservation Initiative: Treasury approves Mercy Housing loan mod program

The Treasury Department will allow Mercy Housing Inc., a national nonprofit group, to use almost one-quarter of the federal "hardest-hit" funds sent to Illinois for a private mortgage modification program in the Chicago area.

Working with the Illinois Housing Development Authority, Mercy, asked in the spring for permission to use $100 million of the federal funds to create a program that would buy delinquent home mortgages from lenders at a discount, reduce the principal amount due on the mortgage and work with borrowers to live within their means.

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In this issue

  Recent Work

File IconBridging the Gap II: Examining Trends and Patterns of Personal Bankruptcy in Cook County’s Communities of Color
May 2011

File IconPaying More for the American Dream V: The Persistence and Evolution of the Dual Mortgage Market
April 2011   

File IconLeft Behind: Troubled Foreclosed Properties and Servicer Accountability in Chicago
January 2011 

  [+] View All Publications

 

 


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