opinion
a Chief Consumer watchdog arrives in 2012
A
s 2012 unfolds, America’s
consumers have now
gained a top cop in a wide
range of financial affairs. Richard
Cordray, a former Ohio attorney
general and state treasurer was
appointed this week by President
Obama to become the first director
of the Consumer Financial
Protection Bureau (CFPB). After
the greatest financial collapse
since that of the 1930s Great
Depression, the historic Dodd-
Frank Act created a new bureau to
comprehensively address lending
abuses and the accompanying
power to enforce regulatory
change.
With a director in place, CFPB
can now take on oversight of pay-
day lenders, mortgage companies
and credit bureaus, writes rules for
the non-banking industry, and
becomes the consumer’s voice in
financial services regulation. Last
year in late July, CFPB began
ongoing monitoring and regulat-
ing of large depository banks.
Announced Jan. 4 at an appear-
ance in Cleveland, President
Barack Obama said in part, “The
financial firms have armies of lob-
byists in Washington looking out
for their interest. You need some-
body looking out for your interest
and fighting for you – and that’s
r eSponSiBle l ending
Charlene Crowell
Richard Cordray.”
Ohio consumers would readily
agree. As state attorney general,
Cordray recovered more than $2
billion from Wall Street to repay
the state’s wrongly-foreclosed
color have always been targets of
predatory lenders who created a
financial mess that resulted in
losses of $194 billion in the
African-American community and
$177 billion in the Latino commu-
nity, the largest exodus of wealth
ever recorded for these groups. . .
We are ready to work with
Director Cordray to ensure that no
ers of color are more than twice as
likely to receive high-risk loan
products – even after accounting
for income and credit status.
These mortgage defaults are
strongly tied to abusive loan
terms, such as prepayment penal-
ties, ‘exploding’ adjustable-rate
mortgages and loans originated by
mortgage brokers. In many cases,
As state attorney general, Cordray recovered more than
$2 billion from Wall Street to repay the state’s wrongly-
foreclosed consumers, the state’s looted pension funds,
and its cities and counties
consumers, the state’s looted pen-
sion funds, and its cities and coun-
ties. His reputation as a fair and
reasonable advocate attracted
widespread support that included
businesses, civil rights and con-
sumer advocates, and 37 state
attorneys general.
Speaking to the specific con-
sumer needs in communities of
color, Wade Henderson, president
and CEO of the Leadership
Conference on Civil and Human
Rights said, “Communities of
community is ever victim to these
practices again.”
The biggest factor contributing
to this historic loss of minority
wealth has been foreclosures
wrought from high-cost and
unsustainable loans. Published in
November, CRL’s updated fore-
closure research, Lost Ground,
examined disparities in mortgage
lending and foreclosures. CRL
found that although the majority
of people affected by foreclosures
have been white families, borrow-
brokers received kickbacks for
placing borrows in these more
expensive and high-risk loans.
With the CFPB and other provi-
sions of the Dodd-Frank Act, the
kickbacks known in the mortgage
industry as ‘yield spread premi-
ums are banned. Further, lenders
are now required to ensure a bor-
rower’s ability to repay a loan.
Another and lesser known duty
of CFPB includes oversight on
student loans for higher education.
With authority over private stu-
dent lenders, CFPB will require
lenders to follow fair rules and
provide families with information
they need to make informed and
smart choices in financing a col-
lege education for their children.
This particular provision will ben-
efit African-American families –
36 percent of whom already fund
college educations with student
loans.
For consumer advocates such as
the Center for Responsible
Lending
(CRL),
Richard
Cordray’s appointment was
viewed as welcome news not only
for consumers but also for busi-
nesses and the economy. CRL said
in a statement “Finally, the agency
can run at full speed, policing the
financial marketplace to make it
fairer and more competitive. . . By
promoting sensible oversight of
businesses and sounder choices in
consumer financial products, the
CFPB will help restore our econo-
my and prevent another melt-
down.”
Charlene Crowell is a commu-
nications manager with the
Center for responsible lending.
She can be reached at:
Charlene.crowell@responsible-
lending.org.
my Problem watching
mainstream News
I
grew up listening to the news on
radio, watching it on TV, and reading
it in the paper (and in magazines). I
have found myself increasingly weary
of mainstream news, however. It is an
odd feeling. My political beliefs have
always led me to question the main-
stream news sources but I would still
make a point of watching network news
programs. Over time something hap-
pened.
With the exception of Aljazeera,
which offers the most interesting in
what can be called mainstream news, we
are treated to endless stories about what
now seems to be endless electoral/polit-
ical campaigns. We are treated to stories
about the economy that tell us so little
about the roots of the current economic
I cannot hide; nor
can you
crisis. We are then treated to inane sto-
ries about this or that celebrity (and who
they might be involved with) or stories
about some horror, such as a mass mur-
der or environmental disaster.
Think about it: how often do you get a
sense as to why anything is actually hap-
pening? Instead we are exposed to what
feels like a ticker tape of disasters,
which has the net effect of making you
want to run away and hide. When there
are so-called experts speaking, they are
more than likely white men, as if there is
no one else on planet Earth capable of
interpreting reality. But added to that,
the spectrum of opinions is so terribly
narrow so as to make distinctions diffi-
cult to ascertain.
The reality of the bias and intellectual
desert that is mainstream news is why it
t ranS
a FriCa
Bill
Fletcher Jr.
is so critical that two things happen.
One, legislative action will need to be
taken to break up the oligopoly that has
emerged in mainstream news. We need
more news channels and we need a vari-
ety of opinions. Two, we need to support
good alternative media, including but
not limited to African American media.
With regard to alternative media, as
greater attention turns to the Web, we,
the consumers of information must real-
ize that we will need to provide support.
Good news necessitates more than just
opinion but the hiring of capable jour-
nalists who have the courage and expert-
ise to investigate and write about the
global developments that should be
brought to our attention.
I feel embarrassed ignoring the main-
stream media, even though I am often
relieved that I do not need to hear the
nonsense. But I cannot hide; nor can
you. My experience is that when you
actually speak with regular people about
WHY things are happening, or when
you hear news programs that treat the
viewer/reader as if they are intelligent
rather than a moron, the lights go
on…and someone is, in fact, home.
Bill Fletcher, Jr. is a Senior Scholar
with the institute for Policy Studies, the
immediate past president of transafrica
Forum, and the co-author of “Solidarity
Divided
January 11, 2012 The Seattle Skanner page 5