Northwest UU Justice Network

Roll-Back of Dodd-Frank Federal Financial Reforms Passes House, Moves to the Senate, June 7, 2017

This time last year the national Consumer Financial Protection Bureau (CFPB), our country’s main regulator of banks and lenders, was releasing a strong proposal to rein in payday lenders. And now the CFPB is fighting for its life. Wow – so much has changed in a year!

On Thursday, The U.S. House of Representative passed the Financial CHOICE Act, aka the “Wrong Choice Act,”, rolling back the Dodd-Frank financial reforms, exposing consumers to the same dangerous financial practices that contributed to the last recession and foreclosure crisis.  The bill now must pass the Senate.

This harmful bill will:

  • Eviscerate the CFPB, which has returned nearly $12 billion to 29 million Americans harmed by illegal financial practices.
  • Prohibit the CFPB from enforcing the law or issuing ANY regulation for payday, car title, or similarly exploitative loans.
  • Repeal the CFPB’s authority to stop unfair, deceptive, and abusive acts and practices (UDAAP) in consumer finance. UDAAP authority was the reason the CFPB was able to bring a case against Wells Fargo for engaging in a fraudulent accounts scam.
  • Put the CFPB and other financial regulators’ funding at the mercy of congressional appropriations, disregarding the long-standing practice of independent funding for banking regulators.
  • Make another foreclosure crisis more likely by weakening the commonsense rule that lenders verify borrowers’ ability-to-repay.

As if all of that weren’t horrifying enough, this bill also makes it more difficult for states to enforce their own usury laws—the laws that work to protect people from abusive financial practices—and potentially undermines other strong state-level consumer protections.

In short, this bill is horrible for low-income communities and communities of color. Our friends at the Center for Responsible Lending combed through all 589 terrible pages of this bill and outlined its most egregious problems. Read more about all the things wrong with this bill.

Instead of applauding the CFPB’s efforts to slow the exploitation of our communities, members of Congress are working to dismantle the entire bureau and return us to the days of unchecked banking greed. As you remember, the failure to have responsible regulation heavily contributed to causing the Great Recession, which led to more than eight million Americans losing their jobs, nearly eight million Americans losing their homes, trillions of dollars in lost family wealth, and trillions in taxpayer funded bailouts. Taking us back down that path is the wrong choice.

Take action now. Congress needs to hear from you today. They need to hear that this is a giant leap in the wrong direction for American consumers.

Glossary

Citation

Network, W. (2017). Roll-Back of Dodd-Frank Federal Financial Reforms Passes House, Moves to the Senate, June 7, 2017 . Retrieved from http://www.nwuujn.org/view/news/5930a5020cf2f1b5abcf776b

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