D.C. Circuit Court Attempts to Thwart Consumer Protections

 By Renato R. Rocha, Policy Analyst, Economic Policy Project, NCLR

CFPB_LogoLast week, the U.S. Court of Appeals for the DC circuit decided against the Consumer Financial Protection Bureau (CFPB), making it easier to remove the director, who serves as head of the Bureau. If the decision stands, it will undermine what the CFPB was created to do in the aftermath of the Great Recession—protect consumers—since the director could be removed by the president without cause.

A challenge to the director’s authority is a challenge to CFPB itself. Since the CFPB opened its doors five years ago, it has become clear that the Bureau is exactly what consumers needed, and consumers overwhelming support its work. The CFPB now has authority to regulate a range of industries that previously lacked transparency, including remittance transfers, credit cards, student loan servicing, and payday loans. In order for the Bureau to continue its essential work on behalf of families, the CFPB needs to remain autonomous.

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Don’t Be Fooled: Payday Lenders Do Target Communities of Color

By Marisabel Torres, Senior Policy Analyst, Wealth-Building Policy Project, NCLR

In response to Javier Palomarez’s article “Alternative Lenders Offer Opportunity for Consumers and Businesses Alike,” he is correct that lower-income American households need access to small-dollar lending. However, I disagree with his support for payday lenders.

What Palomarez’s article fails to mention is that payday lenders specifically target communities of color, and their business model creates a vicious cycle of debt that is difficult for most borrowers to escape. In fact, the typical payday loan carries an exorbitant 391 percent APR, is given to borrowers without consideration of their ability to pay it back, and with direct access to their bank account.

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The Consumer Financial Protection Bureau Turns Five!

By Renato R. Rocha, Policy Analyst, Economic Policy Project, NCLR

CFPB_LogoLow- and moderate-income families suffered disproportionate losses of wealth during the Great Recession. Under the conditions that existed before the passage of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, Latinos and other communities of color were not adequately protected from unfair and deceptive financial practices. The lack of oversight allowed for conditions that were ripe for consumer exploitation. NCLR and other civil rights and consumer advocates pushed for an agency that would put families first. The creation of the Consumer Financial Protection Bureau (CFPB) was one of the hallmark achievements of Dodd-Frank.

Today we celebrate the fifth anniversary of the CFPB’s establishment—and what a productive five years it has been. Despite being an infant by federal agency standards, the CFPB has made considerable strides toward making financial markets work for both consumers and providers. Since the inception of the Bureau, the CFPB’s enforcement actions have brought $11.7 billion in relief to more than 27 million consumers.

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Latinos and Financial Freedom: NCLR Launches “Community Insights” Series

Photo: Pictures of Money

Photo: Pictures of Money

Many of the Latino community’s struggles recently have centered around economic stability in the wake of the Great Recession. The Hispanic community lost more than 66 percent of its wealth in the recession and has not yet recovered lost ground. In order to understand more about Latino households’ ongoing economic challenges and how they’re overcoming them, NCLR established a Financial Services Advisory Council with the support of Citi Community Development, the Ford Foundation, and Master Your Card: Oportunidad.

The Financial Services Advisory Council is composed of a group of 10 NCLR Affiliates who serve more than 40,000 clients annually and provide input on how their clients are interacting with financial institutions, what products and services are most useful to them, and how they are managing financial stress. Of the nearly 300 community-based organizations that make up the NCLR Affiliate Network, these 10 are economic first-responders in their communities and offer a range of financial counseling and capability services.

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