NAACP-Supported Legislation to Create a New Consumer Mortgage and Financial Services Protection Agency Passes U.S. House; is Now Being Considered by Key Senate Committee
THE NEW AGENCY WOULD PROVIDE AMERICANS WITH MORE PROTECTIONS AGAINST PREDATORY LENDING AND OVERSEE AND HELP TO ENFORCE MORTGAGE, LENDING AND OTHER FINANCIAL SERVICES PROTECTION LAWS
On December 11, 2009, the U.S. House of Representatives passed H.R. 4173, the Wall Street Reform and Consumer Protection Act by a margin of 223 yeas to 202 nays. This legislation would overhaul federal regulation of the American financial services industry, including create a Consumer Financial Protection Agency (CFPA) which would be charged with overseeing consumer protection in the home mortgages and financial services areas, it would strengthen investor protections and it would establish and monitor national mortgage standards.
Our current system of consumer protection fails to protect American families from some of the most basic economic abuses that can unnecessarily cost households hundreds of thousands of dollars, and even their homes. This has been especially devastating for specific communities: for decades racial and ethnic minority and others have been targeted by unscrupulous mortgage lenders and others. As a result, many African American, Latino, and American Indian families as well as senior citizens were sold risky, high-cost mortgages when they might well have qualified for safer, less costly conventional loans. For African-American and Latino families, this has lead to the current economic and foreclosure crisis which represents the greatest loss of wealth in history.
The sad truth is that racial and ethnic minority American borrowers continue to pay more than their White peers for nearly every kind of financial service, including credit cards, car loans, and home mortgages. They also bear a disproportionate share of the consequences of the economic downturn, as demonstrated by declining income, wealth, and homeownership levels. As envisioned by the authors of H.R. 7173, the newly-created Consumer Financial Protection Agency would police the market on behalf of consumers and significantly improve the caliber of financial services available to all American families. If successful, the proposed Consumer Financial Protection Agency (CFPA) would raise banking standards, increase oversight and accountability, enforce neglected civil rights laws and other consumer protections and improve access to credit through innovative credit, banking, and savings products.
Passage of H.R. 4173, the Wall Street Reform and Consumer Protection Act by the U. S House is a good step forward. We must now encourage the United States Senate to develop and pass a strong, pro-civil rights, pro-Consumer rights law as well. This means encouraging every Senator to
- support legislation that includes a strong version of the Consumer Financial Protection Agency (CFPA);
- reject efforts to weaken the CFPA through industry carve-outs, or other forms of exemption from coverage; and
- ensure that states continue to be able to pass anti-predatory lending laws that are stronger than the federal statutes.