This tunnel vision may sometimes help us focus in productive ways, but often reduces our cognitive capacity or “bandwidth” in harmful ways.
from the president
With all the challenges organizations face these days, thriving for 40 years as an organization is in itself a great accomplishment. But we have so much more than that to celebrate:
We knew that deregulation of the financial industry and short-term profit-seeking through toxic loan products had led to the disaster, but we didn’t know how we were going to help people in foreclosure and make our financial system more just and sustainable.
As we outlined in our recent joint report, we’ve seen these games before in Illinois. Payday regulators must avoid creating such loopholes.
In 2001, the Illinois Department of Financial and Professional Regulations issued consumer protections on payday loans with terms of less than 30 days. Payday lenders simply evaded the rules by offering payday loan products with 31-day terms.
Last month fair lending advocates cheered when the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation proposed new guidance that would require banks under their supervision that offer bank payday or deposit advance products to comply with traditional safe and sound lending practices such as lending only after conducting proper underwriting and considering the borrower's ability to repay the loan.
Our voices were heard loud and clear this year at the National Community Reinvestment Coalition annual conference, where we had the opportunity to take our priorities to bank regulators and 15 members of the Illinois Congressional delegation. We were joined by a delegation of nearly 30 Illinoisans from housing counseling agencies, community organizations, nonprofit developers, universities, and more.
When talking about “risk” with the old school banking regulators, such as the Office of the Comptroller of the Currency, the Federal Reserve Board or the FDIC, the conversation was usually about “safety and soundness,” or risk to the financial institution’s bottom line and ongoing stability, or about “reputation risk,” or fear of being sued or getting bad press that might affect market price and assets.
Key policies of the last decade, such as the Bush Administration’s “Ownership Society,” sought to expand homeownership opportunities without putting in place effective safeguards against unchecked and unscrupulous lenders targeting communities of color with unsustainable mortgage products. Rather than correct this regulatory failure, many critics have chosen to question the viability of homeownership as a wealth-building vehicle and suggest that many people are better off renting their home.
A Chicago Chase customer contacted Ann Hilton Fisher of AIDS Legal Council in March of 2011 after his account was charged $12 because he didn’t have a single direct deposit of at least $500 into his checking account, even though he receives two disability payments from the Social Security Administration that total over $500 in aggregate. When this 47-year-old customer asked local bank branch staff to waive the fee, a bank employee suggested that the client “have Social Security send both checks together,” which is not feasible.