by Charlene Crowell
(NNPA)—After two weeks of intense negotiations by a joint Capitol Hill conference committee, Washington lawmakers finally reached agreement on the single largest financial reform package since the 1930’s New Deal. The new reforms would establish stronger protections against abusive mortgages, help borrowers facing foreclosures, establish a strong Consumer Financial Protection Bureau, and rein in many of the risky activities of Wall Street and the large banks. Additionally, $2 billion will be equally shared in support of foreclosure prevention assistance and supplemental funding for the Neighborhood Stabilization Program.
The new reform package will be known as the Dodd-Frank Act, bearing the names of the two lawmakers whose leadership led to consensus: Sen. Chris Dodd of Connecticut, who is retiring from the upper chamber and Rep. Barney Frank of Massachusetts, conference committee chair and head of the House Financial Services Committee.
Commenting on the late-breaking development, President Obama remarked that he was “gratified” by the compromise, saying that it contains 90 percent of what he proposed nearly a year ago. The 2,000-page bill will now face a vote in each chamber. If lawmakers act swiftly, the bill could reach the president’s desk for signing by the Fourth of July holiday.
For communities of color, the stakes are high in ensuring that reforms remain strong and meaningful. The financial crisis has widened the racial wealth gap and ongoing foreclosures are hitting minority communities the hardest.
Fortunately, racial and ethnic minority members of Congress spoke in a unified voice to the range of financial issues that confront communities of color. Moreover, their requests are included in the final consensus version.
In a June 22 letter to Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, members of three caucuses—the Congressional Black Caucus (CBC), Congressional Hispanic Caucus (CHC) and the Congressional Asian Pacific American Caucus (CAPAC)—formally requested $3 billion to provide low-interest loans to assist unemployed or underemployed homeowners and an additional $1 billion for grants to help communities fight foreclosures, home abandonment and blight. Citing research by the Center for Responsible Lending, the members noted that beyond the millions of nationwide homes likely to enter foreclosure, some $1.86 trillion in lost wealth from plummeting property values would affect more than 91 million homes still occupied but located near foreclosed homes.
In part, the letter signed by caucus leaders Barbara Lee, Charles Gonzalez and Michael Honda, states, “Without additional funding, distressed properties would otherwise either sit vacant or be sold to unscrupulous absentee investors, who often fail to rehabilitate the properties and leave neighbors and local governments to deal with the costly blight.”
In addition to this joint request, conference committee members from the Congressional Black Caucus additionally secured support for an Office of Minority and Women Inclusion. Authored by Congresswoman Maxine Waters, the initiative, endorsed by the bipartisan conference committee, will “ensure equal employment opportunity and racial, ethnic and gender diversity.” The new agency will also work to increase “the participation of minority-owned and women-owned businesses in the programs and contracts” of each agency.
Directors of these offices would be presidential appointees and require Senate confirmation as members of the Senior Executive Service. Once confirmed, however, they would develop standards within each agency to assess diversity policies and practices in each federal financial agency, the 12 regional banks of the Federal Reserve, and the Fed Board of Governors.
This development is intended to eliminate the exclusionary practices that such federal programs as the Troubled Asset Relief Program wrought. Once touted as a major economic stimulus program, TARP has yet to stimulate most minority businesses even though $700 billion in taxpayer funding was authorized.
Both the Government Accountability Office (GAO) and the Office of Personnel Management have documented the dearth of African-American and Hispanic senior managers at federal financial services agencies. From 1993 to 2008, for example, minority senior managers at the U.S. Treasury Department numbered only 17.2 percent of its workforce.
The request for the new office was endorsed by all CBC members who serve with Waters on the House Financial Services Committee: Representatives Andre Carson, Bill Clay, Al Green, Gwen Moore, David Scott and Mel Watt .
The success of preserving these minority-focused provisions did not occur without public resistance. A June 14 editorial by the Wall Street Journal found the initiative to be political intrusion, saying in part, “If the Waters provision passes, federal regulators will have to put racial and gender lending at the top of their watchlist when they do their checks on the banks and hedge funds they are regulating.”
On June 18, a rebuttal by Waters refuted the paper’s claim, writing, “Nothing in this bill would require, cause, nudge or even hint that a financial services agency should abandon or subjugate its focus on systemic risk to make loans based on race or gender.
“What this legislation will do,” continued Waters, “is help address an indisputable problem, the lack of diversity in financial services. The provision is designed to broaden and improve the workforce of these agencies and expand opportunities for our nation’s small businesses—including minority and women-owned businesses–to participate in programs and contracts instead of continuing to rely on the same ‘old boy’ network.”
and handful of Wall Street firms responsible for the crisis in the financial markets.”
The Congresswoman is right. Whenever America’s vision has embraced the ideas and talents of all its peoples, our nation has moved closer to the ideals espoused in our living documents.
As we approach the annual Fourth of July festivities, now would be a propitious moment to remember that although our country’s Declaration of Independence proclaimed that “all men are created equal” the painful truth is that people of color have had a distinctly different American experience.
As long as people of color lack economic parity, we may have our freedom; but still lack the equality our nation promised.
(Charlene Crowell is the Center for Responsible Lending’s Communications Manager for State Policy and Outreach. She can be reached at: Charlene.firstname.lastname@example.org.)