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!
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! Read more…
This is a huge, hard-fought victory for consumers. We’ll finally have an agency fully devoted to us, to make sure mortgages, credit cards, and other loans aren’t full of tricks and traps in the fine print. You can read AFR’s full statement about this victory here.
We’ll be posting more about the CFPB — what it will and won’t be able to do — in future days. Stay tuned!
AFFIL’s Board Chair, Professor Cathy Lesser Mansfield, published this op-ed today in the Des Moines Register. Cathy teaches at Drake University in Des Moines, and her piece is a response to Senator Grassley’s (R, IA) announcement that he will not vote for financial reform. His announcement is surprising because he voted for financial reform when it was in the Senate twice, as a member of the Agriculture Committee and then on the floor. You can read his rather convoluted announcement here, and AFR’s response to it here.
Cathy has been practicing consumer law for two decades, and her op-ed powerfully explains why we need financial reform. Here are some excerpts.
I have been practicing, teaching and writing about consumer protection law for two decades. I am one of the many people who did see a crisis coming a decade ago, and tried to get Washington’s attention. Read more…
The CFPA and Wall Street reforms have grabbed most of the headlines, but the financial reform bill also includes some strong and very important rules for new mortgages. There are also some helpful foreclosure prevention provisions, though much more remains to be done for struggling homeowners. Research suggests that up to 13 million homes could be lost in the current foreclosure crisis. 2.5 million already have.
But back to the good news. Here’s some of what the bill will do to make the mortgage market safer:
Bans Mortgage Broker Kickbacks. A major reason high-cost loans proliferated was that brokers got paid more when they sold more expensive loans. Many people–particularly people of color–ended up with loans that were more expensive than what they qualified for. The bill changes the ways mortgage brokers are paid, so they aren’t encouraged to sell high-cost and risky loans to people who are eligible for better ones.
Limits Pre-Payment Penalties. Read more…