Happy Sixth Birthday, CFPB!

By Renato Rocha, Policy Analyst, Economic Policy, UnidosUS

Today, UnidosUS joins the consumer advocacy community as we celebrate the sixth anniversary of the Consumer Financial Protection Bureau (CFPB). The crippling effects of the financial crisis led to the creation of the CFPB, which we view to be one of the most important accomplishments of Wall Street reform. Six years ago, we made the argument that consumer protection is a civil rights issue––and we feel the same way today.

Since opening its doors, the CFPB has already curbed several unfair and deceptive practices in the financial marketplace. Over these last six years, the CFPB brought transparency to the remittance industry, stopped credit card companies from adding on products that consumers never agreed to, and required mortgage lenders to ask applicants for proof of their income before making home loans to ensure that homeowners can afford them. Just last week, the CFPB issued an important final rule that restricts forced arbitration, giving consumers a way to unite and hold corporations accountable for systemic misconduct. And we are waiting for the issuing of the final rule on payday loans, which will help curb the predatory lending that drains wealth from our communities.

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CFPB’s New Consumer Protection: Restrict Forced Arbitration

By Renato Rocha, Policy Analyst, Economic Policy, UnidosUS

The same week we announced our new name—UnidosUS—the Consumer Financial Protection Bureau (CFPB) issued a final rule that prohibits financial contracts from having forced arbitration clauses with class action bans. In effect, the new rule restores the right of consumers to come together in court by prohibiting class action bans, giving consumers a way to unite and hold corporations accountable for systemic misconduct.

Forced arbitration is a rigged system. Often, forced arbitration requires consumers to take a dispute to a private arbitrator chosen by the company, rather than exercise their right to have their complaint heard before a court. Given the association between the company and the arbitrator, forced arbitration causes considerable unfairness to consumers.

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Latinos Looking for a Place to Call Home: How Hard Will it Be?

By Agatha So, Policy Analyst, Economic Policy Project

Photo: American Advisors Group

Ten years after one of the worst financial crises in history, our nation’s economy is recovering, and the housing market is finally getting back to “normal”, according to the Harvard Joint Center for Housing Studies’s (Harvard JCHS) State of the Nation’s Housing Report. Yet, for many Americans, especially communities of color and low-income households, the recovery has yet to trickle down into their neighborhoods. Latino families, who were hit hard by the foreclosure crisis, are just now recovering some of what they had lost nearly a decade ago.

In a national poll of Latino voters, an overwhelming majority of respondents said that they would like to own a home. However, these voters were split on whether they thought they could find affordable housing in the neighborhood where they would want to live. Forty percent of voters reported they would be able to find an affordable place to live and in a location where they want to live, and 9 percent said they had already found that place. On the other hand, 47 percent of voters reported that they don’t think it would be possible to find an affordable place to live and in the neighborhood where they would want to live.

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Giving Credit Where it’s Due: Latinos and Credit Scores

By Agatha So, Policy Analyst, Economic Policy Project, NCLR
Family in front of house

In the run up to the Great Recession, Latinos and other low-income homebuyers of color more often than not received higher-priced mortgage loans than White borrowers. Today, Latinos and low-income communities of color are still being short-changed in the mortgage market.

In 2015, few mortgages were made to Latino and Black borrowers, with 8% of all home purchase loans made to Latinos, and only 5% going to Black borrowers. Tight lending standards have made it difficult for millions of Americans to buy a home since the Great Recession, especially for Latinos and low-income families with credit scores below 700. While the minimum credit score needed to qualify for a home loan has increased by 40 points, the credit scores of Latinos who receive mortgages have increased by nearly 80 points since 2000.  Moreover, Latino borrowers are less likely than White borrowers to have a credit score and full credit history, making them appear riskier to lenders than they really are.

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Is Homeownership Just a Dream for Latino Millennials?

By Agatha So, Policy Analyst, Economic Policy Project, NCLR

Family in front of home

While American families who bought a home before the Great Recession were likely most concerned with the interest rates of their home loan, today’s millennials might be more preoccupied with the interest rates and repayment plans on their student loans.

Nearly 70 percent of bachelor’s degree recipients leave school with debt. Student loan debt is one of the largest burdens carried by Americans today, second only to mortgage debt. As a result, it comes as no surprise that student loan debt may be holding back millennials, especially older millennials, from buying a home.

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