Opinion
House Bill Undermines Consumer Protection
I
n the aftermath of the success-
ful effort to better protect con-
sumer finances, the Consumer
Financial Protection Bureau
(CFPB) is now facing a forceful
effort to undermine its mission
and operation. Even before CFPB
reaches its first anniversary of
operation, proposed federal legis-
lation that would exempt a variety
of non-bank lenders has attracted
19 co-sponsors representing por-
tions of Arizona, California, Geor-
gia,
Illinois,
Maryland,
Mississippi, Missouri, New Mexi-
co, New York, North Carolina,
Ohio, Texas, and Wisconsin.
House Bill 1909, sponsored by
California Rep. Joe Baca (R-
Calif.), seeks to create a new fed-
eral charter for non-bank financial
service providers that would
bypass CFPB. It would also pre-
empt state consumer protection
laws and rollback consumer gains
nationwide. Several states have
already passed strong consumer
protections against the very same
lenders this federal legislation
would reverse. If enacted, non-
bank lenders would no longer be
subject to the federal Truth in
Lending Act, which requires dis-
R ESPONSIBLE
L ENDING
Charlene
Crowell
closure of the cost of credit as an
annual percentage rate (APR).
The beneficiaries of this legisla-
tion would be a wide range of
businesses that offer reloadable
prepaid debit cards, payday and
car title loans, rent-to-own agree-
ments, pawn shops, check cashing
services and more.
On the losing side would be 30
million consumers who either
have no bank account – the
unbanked – or those who use very
limited bank services – the under-
banked. Further, if enacted, a two-
tiered financial system would be
created and the almost certain
exploitation of consumers using
these products.
According to the Federal
Deposit Insurance Corporation
(FDIC), Black consumers repre-
sent more than 30 percent of
under-banked households and
more than 20 percent of unbanked.
Black consumers together with
Hispanic,
American
Indian/Alaskan and consumers
represent 56 percent of all
unbanked households.
Businesses that provide goods or
services at a competitive and fair
price earn a loyal customer base;
they offer consumers for value for
their hard-earned dollars. Yet
many non-bank financial servic-
es included in HB 1909 have
product that leaves a consumer
worse off financially than before
can hardly be termed a service.
Fortunately, a number of con-
sumer advocates are actively
working to oppose the renewed
de-regulation efforts, including
Americans for Financial Reform
and U.S. PIRG.
In announcing its opposition to
HR 1909, the Washington, D.C.-
based Consumer Federation of
America, was as clear as it was
direct. “We oppose any steps
On the losing side would be 30 million
consumers who either have no bank
account – the unbanked – or those
who use very limited bank services –
the under-banked
never fit that description.
Instead, their “repeat business”
results from high fees that entrap
customers into long-term debt.
The irony is that these same “ser-
vices” were marketed as short-
term transactions. Any financial
intended to remove non-bank
lenders from the oversight of the
Consumer Financial Protection
Bureau.”
In a recent letter to Capitol Hill
lawmakers the Center for Respon-
sible Lending noted, “This shift
exposes consumers and the finan-
cial services marketplace to the
very dangers that contributed to
the economic crisis. The CFPB
was created for the sole purpose of
protecting consumers through
oversight,
rulemaking
and
enforcement of the rules for the
very consumer financial products
marketed and sold by the compa-
nies covered in this legislation.”
It added, “Less than six months
after the Consumer Financial Pro-
tection Bureau has been fully
operational with a director in
place, H.R. 1909 or similar legis-
lation would backtrack on Con-
gress’ promise to consumers.
These bills offer nothing new or
beneficial for consumers – and
removing consumer finance com-
panies from CFPB oversight will
set a precedent for many other
companies to also seek to be
excluded.”
Charlene Crowell is a communi-
cations manager with the Center
for Responsible Lending.
A Roadmap for the Commission on Black Affairs
T
wenty-six years ago I
became the first full-time
executive director for the
Oregon Commission on Black
Affairs (OCBA). Created by ORS
185.410, the OCBA is charged to
work for the implementation and
establishment of economic, social,
legal and political equality for
Oregon’s African American and
Black populations. Excited about
working with a group with so
much potential, I envisioned it as a
visible and forceful body, working
to influence State policy on behalf
of Black families and children in
Oregon. After all, how could it
not be powerful when by law, it
exists to serve the State of Oregon
and by law, is authorized to:
* Monitor existing programs and
legislation designed to meet the
B LACK A FFAIRS
Kathleen Sadaat
whether the advocacy Commis-
sions are relevant. If one reads the
Urban League of Portland’s
report, “The State of Black Ore-
gon,” it is clear that disparities still
exist between the health and well-
being of Black Oregonians when
compared with our white popula-
tion. These documented dispari-
ties make the OCBA relevant. It is
now time for it to become more
visible and demonstrate its effec-
tiveness in carrying out its respon-
sibilities.
The state can help by making
sure all Commission members
understand both their responsibili-
These documented disparities make
the OCBA relevant. It is now time for it
to become more visible and
demonstrate its effectiveness in
carrying out its responsibilities
needs of African Americans and
Blacks
* Identify and research concerns
and issues affecting the African
American and Black community,
and to recommend actions to the
governor and to the Legislative
Assembly, Including recommen-
dations on legislative programs;
* Act as a liaison between the
African American, Black commu-
nity and Oregon’s government
* Encourage African American
and Black representation on state
Boards and Commissions
* The Commission may serve as
advocate, analyst, instructor, mon-
itor, and advisor.
The most recent negative public-
ity about the Commission has
again raised the question of
ties and how to effectively interact
with state systems. I hope by now
the state has a comprehensive ori-
entation for new Commissioners
and a clear explanation of expecta-
tions both of individual Commis-
sioners and of the Commission as
a state funded body.
A requirement for OCBA to set
goals and submit regular progress
reports to the governor at specified
intervals would demonstrate the
governor’s ongoing interest in the
issues and perhaps engender
greater attention of state govern-
ment.
The Commission on Black
Affairs must engage Oregon’s
Black communities in dialogue
about state policies and programs
and generate recommendations
for revised and/or new policies
and programs. The Commission
must use their legislative repre-
sentatives to help traverse the
complications of state govern-
ment. The OCBA must use ways
(in addition to meeting minutes) to
inform the statewide public of its
vision and accomplishments.
Above all, the OCBA must put
all of its effort into carrying out its
mission and its mandate to serve
the African American and Black
communities of Oregon.
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July 4th, 2012 The Portland Skanner Page 5