• Visit Americans for Financial Reform to stay active in the fight for consumer and economic justice.
• Contact Consumer Action if you have debt or credit trouble.
• Read our final press release and a list of our accomplishments.
• Browse this site for an archive of the AFFIL blog.
• AFFIL’s paper files are stored at the Consumer Movement Archives at Kansas State University.

If you’re a member of the AFFIL mailing list, your membership will continue with Americans for Financial Reform. Stay tuned for important news and updates from AFR!

Thanks so much to everyone who participated in AFFIL over our three and a half years!  Thanks especially to our members, blog readers, and website visitors.  Read on for a list of what AFFIL has accomplished.

From 2007 – 2010, AFFIL made significant contributions to the consumer movement.  See a PDF of this list of accomplishments here.  Read on about:

• Raising Public Awareness:  Predatory Lending is an “American Tragedy”
• Education through Maxed Out
• A Stronger Consumer Movement
• Real Credit Card Reform
• The Creation of the Consumer Financial Protection Bureau

Raising Public Awareness:  Predatory Lending is an “American Tragedy”

AFFIL’s initial public awareness campaign in 2007 included market-tested full-color print ads which appeared in Sports Illustrated Latino, The New Republic, and AWARE magazines.  The artwork, created by ad firm Benenson Janson, was also used on AFFIL’s website and in online advertising, and appeared in a New York Times column about the campaign.  Working with media firm Geoffrey Knox and Associates, AFFIL regularly appeared in the press.  The organization published several Letters to the Editor in the New York Times and Boston Globe, and a prescient “Reporters’ Guide” to the mortgage meltdown in 2007.

Education through “Maxed Out”

Under the leadership of Executive Director Kirsten Keefe, AFFIL engaged in a formal collaboration with the 2007 book and documentary Maxed Out:  Hard

Times, Easy Credit, and the Era of

Predatory Lenders. Maxed Out is both entertaining and informative, educating viewers about debt, predatory lending, and deregulation.

• AFFIL co-hosted around 30 public screenings of the movie, reaching thousands of people.
• In collaboration with Public Citizen and Consumers Union, AFFIL sponsored 600 “House Parties” where small groups watched the DVD and discussed the film in their homes.
• Through AFFIL’s “lending library,” 150 additional consumers were able to view the movie.
• AFFIL was listed as the go-to resource at the end of the theatrical cut of the film, the DVD included a special feature about the organization, and the book features AFFIL in the discussion questions.

A Stronger Consumer Movement

AFFIL brought together twenty national “Partner” organizations, many of whom first met under the AFFIL umbrella and now regularly collaborate.  AFFIL also worked with dozens of locally focused groups around the nation, and supported successful state-based campaigns to end payday lending.

AFFIL also reached and engaged individual consumers, especially online.  Over half a million consumers visited the website to learn, comment, file complaints, and take action.  Individuals used the site to send over 50,000 messages to decision-makers about the need to reform the lending industry, and posted hundreds of their own stories to the site.

AFFIL is bequeathing over 500 consumer stories to Consumer Action for its public education and advocacy efforts.  Its mailing list and social networks – reaching about 40,000 people – will stay active through Americans for Financial Reform.

AFFIL also responded to requests for help from hundreds of consumers, referring them to agencies such as the National Association of Consumer Advocates and Consumer Action.  Approximately 75,000 people visited the “File a Complaint” section of the website to complain to bank regulators.

Real Credit Card Reform

On May 22, 2009, President Obama signed the Credit CARD Act into law.AFFIL was a key contributor to this victory for consumers.  This Act outlaws many of the most egregious credit card tricks and traps, including banning rate increases on old balances, restricting unfair fees and penalties, mandating fair payment allocations, and protecting college-age borrowers.  In recognition of AFFIL’s role in this battle, Board Member Janne O’Donnell attended the Credit CARD Act signing ceremony at the White House (see photo below).  Here are some of AFFIL’s contributions to this important battle for reform:

• “Kiss Credit Card Rip-offs Goodbye” – On Valentine’s Day 2008, Executive Director Jim Campen appeared on Fox Business News to discuss AFFIL and its Partners’ campaign where 40,000 activists sent postcards to Congress asking them to “kiss credit card rip-offs goodbye.”
• Online Video – In partnership with communications firm By George and Company, AFFIL produced an online video for the college audience, warning about on-campus credit card solicitations.
• District Outreach – AFFIL placed radio ads about predatory lending in Kansas City, KS, an area represented by Rep. Dennis Moore, a key member of the House Financial Services Committee.  AFFIL also provided expertise to its Kansas-based ally, Sunflower Community Action, in their communications with him.  Rep. Moore ultimately voted in favor of the reforms.
• Member Comments – AFFIL members submitted over 10,000 comments to the Federal Reserve Board urging reform of credit cards.  Hundreds of these included personal stories of abuse.
• Credit Card Debt by State and Common Tricks and Traps – To increase media coverage of credit card abuse, AFFIL published a list of which states had the highest levels of debt and a list of common tricks and traps.  Both were mentioned in dozens of news outlets.
• Credit Card “Insiders” Speak Out – AFFIL assistedthree former MBNA employees in publicizing their stories about MBNA’s abusive sales tactics.  The insiders were featured on CNN’s American Morning, ABC’s Nightline, and over thirty other outlets (see photo).

Creation of a Consumer Financial Protection Bureau

On July 21, 2010, President Obama signed legislation to create a Consumer Financial Protection Bureau.  In 2011 when the CFPB is formed, a new era will begin for consumers.  The new Bureau will be wholly devoted to consumer finance, representing a vast improvement over the previous system where a patchwork of regulators was responsible for consumer issues.  AFFIL’s campaigns to build public awareness contributed to this remarkable victory, and this work was recognized when the AFFIL staff attended the bill’s signing ceremony.  AFFIL also worked closely with Americans for Financial Reform (AFR), the leading coalition working on the bill, by:

• Taking lead responsibility for the AFR website (http://ourfinancialsecurity.org), social networks, and mailing list.
• Leading a petition drive among AFR coalition members, resulting in the delivery of over 125,000 signatures to Senate Leader Harry Reid (see photo from the Wall Street Journal).
• Helping organize the Massachusetts branch of AFR which discussed consumer protection and Wall Street reform with Senator Scott Brown.  Senator Brown ultimately voted for the reforms, providing a crucial sixtieth vote in the Senate.

Americans for Fairness in Lending to Wind Down

In the wake of heightened awareness of predatory lending and recent major financial reforms including the creation of a Consumer Financial Protection Bureau, Americans for Fairness in Lending (AFFIL) will be winding down its operations at the end of September.

“We have been fighting for greater public awareness of predatory lending and the need for stronger consumer protection laws and regulations for many years,” said Sarah Byrnes, AFFIL’s Director.  “When we began, we never dreamed we would actually see the creation of a federal regulator wholly devoted to consumer finance.  It’s a realization of our goals far beyond what we expected.”

AFFIL’s staff and Board are clear that much work remains to be done, particularly as the new financial protection agency begins to write regulations next year.  Coalitions of organizations will continue to fight these battles.  Many of these groups first began working together as AFFIL’s “Partners.”

“When we began forming AFFIL, the nation was almost completely unaware of the magnitude and toll of predatory lending and the impending foreclosure crisis,” said Cathy Lesser Mansfield, AFFIL’s Board Chair and a consumer law professor at Drake Law School.  “Our initial goal was to raise awareness of predatory lending.  As the world shifted and predatory lending became more widely known, we worked to create support for government protection from predatory lending by bringing together individuals and organizations.”

AFFIL’s first public awareness campaign in 2007 included a print ad campaign, website, and collaboration with the documentary Maxed Out.  Its public launch featured two pre-release screenings of this film in New York City and Washington, DC.

AFFIL focused on a variety of lending issues, including credit cards, mortgages, student loans, payday lending, car financing, refund anticipation loans, overdraft loans, car title lending, credit reporting and scoring, debt collection, and the Community Reinvestment Act.

The organization focused particularly on reforming credit cards, especially to protect young college-age consumers, and played a key role in the passage of the Credit CARD Act of 2009.

In late 2009, the organization entered into a close partnership with Americans for Financial Reform (AFR), a Washington-based coalition of over 250 groups which successfully pushed for broad overhaul of the nation’s financial system through the passage of this summer’s Dodd-Frank Wall Street Reform and Consumer Protection Act.  AFFIL staff played a key role working with AFR staff during this historic effort.

“AFFIL is leaving an impressive legacy for the consumer movement,” said Will Ogburn, Secretary of the AFFIL Board and Executive Director of the National Consumer Law Center, an AFFIL Partner.  “From the many consumers who were educated and took action on their website, to their successful work on the Credit CARD Act of 2009, to their contributions to Americans for Financial Reform over the past year – these are just a few of the ways AFFIL has helped consumers over the years.”

For more information about AFFIL’s accomplishments, click here (PDF link).

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Write to the Congressional and Senate candidates in your district today and ask them to endorse AFFIL’s Principles of Fairness in Lending.

If you hear back from either an incumbent or candidate running for the Senate or Congress, tell us by leaving a comment here!  Your news can help inform citizens’ decisions around the country.

(Photo: Theresa Thompson)

Mortgages.  Read about mortgage reforms in the new law here. The CFPB must make the mortgage market safe for all participants to prevent another economic and family crisis. The Bureau must:

• Develop clear rules to ensure that all lenders adequately consider ability to repay;
• Stop brokers and mortgage lenders from steering homeowners into loans more costly than those for which they qualify;
• Require mortgage servicers to consider loan modifications where appropriate prior to foreclosing and restrict them from imposing unwarranted servicing fees and force placed insurance;
• Create a strong system to supervise nonbank mortgage lenders.

Credit cards. Congress adopted important protections in 2009, but the work is not done.  The CFPB will need to:

• Monitor the credit card market to address violations and evasions of the Credit CARD Act;
• Prohibit complicated terms and hidden traps in credit cards so that consumers can shop for the best card without being hit with back-end surprises;
• Stop predatory marketing of credit cards to struggling consumers;
• Require credit card companies to disclose an APR that reflects the true cost of a credit card, including all fees.

Overdraft loans. New rules now requiring consumers to “opt in” to overdraft fees on their ATM and debit cards are only the first step. To address the overdraft abuses that remain, the CFPB must:

• Ban aggressive and deceptive tactics to induce opt-ins to overdraft fees;
• Limit excessive fees (in number and amount) that far exceed the costs of overdrafts;
• Prohibit bank tactics to increase overdraft fees, such as reordering transactions to cause overdrafts earlier in the day;
• Require banks to inform consumers of less expensive overdraft protection options.

Payday and auto title loans. Read how the new law addresses payday lenders here. Payday and auto title lenders, including some banks and credit unions, make loans at 400% or more until the next payday. The CFPB cannot set usury caps.  But to address other pernicious aspects of high cost lending, it should:

• Ban dangerous forms of security, including check holding, electronic access to the consumer’s account, and holding car titles;
• Stop the evasion of usury caps through junk fees and other ruses;
• Crack down on reckless lending that, due to high price, short repayment time, or failure to consider ability to pay, is unaffordable for a high proportion of borrowers;
• Protect Social Security, unemployment insurance, and other exempt funds from these lenders.

Auto loans. The CFPB will have jurisdiction over most auto lenders and some car dealers, with the FTC handling the remainder. To bring fairness and transparency to the auto lending market, the CFPB and the FTC together must:

• Prohibit kick-backs to dealers who put consumers in more expensive loans;
• Prohibit bait and switch tactics through “yo-yo” clauses that give dealers a unilateral right to cancel the sale or loan;
• Ensure that the condition of used cars is accurately represented to borrowers and lenders by requiring independent inspections and disclosure of known defects.

Private student loans. Federal student loans have a variety of protections, but private student loans can be much more dangerous. The CFPB must:

• Prohibit lenders from pushing students to take on more expensive and riskier private loans without first exhausting their federal aid;
• Work with private lenders to develop flexible, income-based repayment, loan modifications, and other debt management tools;
• Stop predatory lending by proprietary schools and protect students from
• responsibility for loans used at schools that close or defraud students.

Prepaid debit cards. Consumers fed up with bank accounts, and unbanked public benefit recipients and workers, are increasingly using prepaid cards. Though the cards have many benefits, the CFPB needs to beef up spotty legal protections in order to:

• Ban inappropriate fees, such as fees to check the card’s balance, overdraft fees, and denied transaction fees;
• Give consumers full protection from loss, theft or unauthorized charges;
• Ensure that consumers can get statements and other convenient forms of transaction information;
• Prohibit prepaid cards that hold wages or public benefits from using those funds to secure predatory payday loans.

Credit reports. A consumer’s credit report impacts not only the price and availability of credit but also auto and homeowner’s insurance and employment. The CFPB must:

• Force creditors and credit bureaus to clean up a system that produces reports prone to mistakes such as incorrect and outdated information, fraudulent accounts due to identity theft, and mixed up files of different consumers;
• Reform the credit bureaus’ travesty of an automated system for addressing consumer disputes with credit reports;
• Address racial disparities in credit reports, which impact not only credit pricing and availability but also employment and homeowners and auto insurance;
• Make credit scoring fairer and less opaque to consumers and policymakers;
• Restrain credit bureaus from sweeping new data, such as utility payments, into the credit reporting system if the benefits are outweighed by the harm to vulnerable consumers.

Debt collection. The Federal Trade Commission receives more complaints about debt collectors than any other industry, more than 120,000 in 2009. The responsibility to address these problems now passes to the CFPB, which needs to:

• Stop the widespread use of illegal threats and harassment, and practices that often lead to collection of the wrong amount or from the wrong person;
• Bar collection of “zombie debt” that never dies but is sold and resold to the next debt buyer even if the consumer disputes it or it is too old to be legally collectible;
• Prohibit abuses of the justice system, including failure to give the consumer notice, spreadsheet justice without evidence of the debt, and laundering of timebarred debts with new judgments.

Forced arbitration. Consumers who obtain financial products or services are routinely required to give up their access to justice if the company violates the law. Forced arbitration pushes consumers into a secretive, biased and lawless system before private judges paid by industry. All of the laws in the world do not matter if companies can ignore them with impunity. The CFPB should:

• Exercise its authority to ban forced arbitration clauses in agreements for consumer financial services and products.

Arbitration, the private dispute resolution system where companies essentially get to pick the judges who have total power to make binding decisions, just got a little more consumer friendly.

We are now one step closer to a lending system that restores consumers’ access to the civil justice system. Forced arbitration clauses are all around us in the form of credit card contracts, nursing home contracts, employment contracts, and more. Click here to learn more about the issue and sign a petition in support of Fair Arbitration Now.

Here are the nuts and bolts. The recently passed financial reform bill (also called the Dodd-Frank Act) bans forced arbitration in mortgages. It also gives the new Consumer Financial Protection Bureau authority to restrict or prohibit forced arbitration clauses in consumer financial product and service contracts, following a CFPB study of the issue. Finally, the law provides that the SEC may prohibit or impose conditions or limitations on forced arbitration agreements between broker-dealers and their clients if the SEC finds it “in the public interest and for the protection of investors.”

The Arbitration Fairness Act is moving along as well, and should be voted on by the full House Judiciary Committee this fall. If passed, the Arbitration Fairness Act of 2009 (HR 1020) would end the predatory practice of forcing workers and consumers to sign over their rights by making pre-dispute binding mandatory arbitration (“forced arbitration”) clauses unenforceable.

Click here to follow AT&T Mobility LLC v. Vincent and Liza Concepcion, an arbitration case unfolding in the Supreme Court.

Click here to read about this case on the Sun Sentinel website.

(Photo: tiffa130)

• FACT:  Only 6% of subprime mortgage loans were covered by the CRA.

• FACT:  The other 94% of subprime mortgage lending was not covered by the CRA.

• FACT:  Federal regulators are considering expanding CRA to cover more loans in the future.

Even if you’ve never heard of CRA, expanding it will be good for you, unless you plan to open a mortgage company and issue toxic mortgage loans to poor people once credit starts flowing again.  Otherwise, an expanded CRA will help you because it will prevent foreclosures and another foreclosure-prompted economic crisis.

Fortunately, federal regulators are considering expanding and modernizing CRA.  They’re holding hearings around the country and taking comments from the public about how to do it.   You can submit a comment here.  Tell federal regulators how the economic crisis has impacted you – now is the moment to weigh in.

For detailed information about CRA, visit the Woodstock Institute.

Professor Warren has been fighting on behalf of consumers for decades, and her dedication to the cause coupled with her experience, her independence, and her efficiency make her the best person to lead the CFPB.

The big banks are dipping into their wallets once again to fuel the fight against her nomination as CFPB director.  They know that with Elizabeth Warren in charge, the CFPB will be strong, and will actually fight to protect consumers.  This just serves as further proof as to why we have to make sure Professor Warren becomes the first CFPB director.

Consumer advocacy groups are coming together to ask President Obama to nominate Elizabeth Warren as soon as possible.  To raise your voice about this issue, sign our petition here or write to the President and your Senators here.

Support for Elizabeth Warren comes in many forms, including this Western-themed rap from our friends at the Main Street Brigade.  Enjoy, share, and pass it on: We need Sheriff Warren in DC!

You can read a big picture overview of what the bill accomplishes in this previous post, find more details about the great new mortgage reforms here, and read info about the unfortunate and unfair car dealer exemption here.

Next up:  payday loans.  These are nasty, short-term loans designed to trap borrowers in a long-term cycle of debt.  They have traditionally been regulated at the state level.  Fifteen states plus DC currently outlaw them, but other states haven’t taken enough action to protect their citizens from these usurious debt traps.  (A special shout out to Illinois and Wisconsin, which recently passed new legislation limiting payday lending in their states.)

Now, the CFPB will have jurisdiction over payday lenders – hooray!  Payday lenders are “nonbank” lenders, so the CFPB will be able to write and enforce regulations over all of them, no matter what size.  It will be the first federal regulator able to tackle these ultra-predatory lenders.  Many consumer groups, such as Consumer Union and the National Consumer Law Center (pdf), are calling upon the Bureau to make regulating payday lending a top priority.

While the CFPB won’t be able to impose usury caps, it will be able to ban certain forms of collateral – like a paycheck or access to bank account.  Such a ban would effectively end payday lending.  A ban on a car title as collateral could similarly end car title lending, another highly abusive type of loan.

The bad news on the payday lending front is that small payday lenders will have special access to the rule-writing process at the CFPB.  Before proposed rules are made public, they will be able to read and possibly influence them, which can delay the process for months and potentially weaken the rules.  It will be up to the regulators to resist pressure from payday lenders, even though they are given this special access.  This is just one more reason why it is crucial that the Bureau have a strong director, committed to real consumer protection:  it’s one more reason that President Obama should nominate Elizabeth Warren for this position.

Payday lenders’ special access came about as a result of the Snowe-Pryor amendment to the Senate bill, which you can read more about here.

On July 21, 2010, President Obama signed the Financial Reform and Consumer Protection Act of 2010 into law, and we were there to witness it.

This bill includes many provisions that AFFIL, AFR, and our allies have been fighting for for years.  Among other things, it will:

• Create a Consumer Financial Protection Bureau. Finally, we will have a regulator with the sole task of protecting consumers and preventing tricks and traps related to mortgages, payday loans, checking accounts, and more.  Read more.
• Shine light on shadow markets. It will require that the derivatives market operates in the open, that participants have the money to cover their bets, and that hedge funds and private equity funds are registered with the SEC so they can have regulators watching over them.  Read more.
• Prevent taxpayer-funded bailouts. The government will have the authority and the tools to step in and safely shut down any failing financial firm instead of propping them up with taxpayer money, and will watch the market to prevent this from being necessary in the first place.  Read more.
• Protect consumers when buying homes. For the first time, lenders will be prohibited from making loans that borrowers cannot repay, and banned from receiving kickbacks for steering people into high rate loans when they qualify for lower rates.  Consumers will also be protected from abusive loan fees and penalties for prepayment.
• Hold credit rating agencies Accountable. Credit rating agencies will no longer have a vested financial interest in giving high ratings to risky investments. Better controls will hold rating agencies accountable for the reliability of their reporting.  Investors will be able to sue credit rating agencies who slap a high rating on a risky investment.   Read more.

The final product isn’t perfect.  Auto dealers will be exempt from CFPB regulations even though they are consistently the top source of complaints filed through the Better Business Bureau and state and local consumer protection agencies.  We wish we had gotten even closer to breaking up the big banks and dealing with “too big to fail” institutions, but we at least made advances in these areas.

There is always more work to be done – and new tricks to deal with – but this legislation goes a long way to establish the important protections that consumers need and deserve.  Thanks for all your help getting here – we couldn’t have done it without you.