Stay Involved

After helping pass historic reforms of the consumer lending industry, Americans for Fairness in Lending is no longer operating.  Please see the links below to stay involved in the consumer movement.

• 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.

AFFIL’s Accomplishments, 2007 – 2010

Unfortunately, AFFIL will be winding down its operations as of September 30, 2010.  Given the new Dodd-Frank bill and the creation of the Consumer Financial Protection Bureau, we’re declaring victory and calling it quits!  You can read our final press release in the previous blog post.

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

Press Release: AFFIL to Wind Down

For Immediate Release
September 15, 2010

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.”

Casting a Pro-Consumer Ballot This Fall

Before you vote, make sure your candidates are standing up for you, not the big banks and Wall Street.

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)

An Agenda for the CFPB

Direct from our friends at the National Consumer Law Center, here are some priorities the CFPB must address when it is formed in 2011.  See this information in PDF format here.

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.

Inching Toward Fair Arbitration

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)

Keep More Mortgage Lenders in Line with an Expanded CRA

The Community Reinvestment Act (CRA) is a 1977 law which currently covers some but not all mortgage loans.  It doesn’t cover loans from any mortgage companies, and only covers loans from banks in certain circumstances.  CRA is incredibly effective when it is allowed to be.

• 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.

Sheriff Elizabeth Warren

With the financial reform bill behind us, we’ve moved onto a new challenge: making sure the Consumer Financial Protection Bureau is as strong as possible and is led by a great consumer advocate.

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!

Payday Lending in the New Financial Reform Law

As you know, after a mammoth battle with the banks, on July 21 President Obama signed the financial reform bill into law.

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!  

Financial Reform Victory!

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.