Wall Street reform: A genuine people’s victory

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by Charlene Crowell

CharleneCrowell

(NNPA) – Last week’s media hype on Ms. Shirley Sherrod and the Department of Agriculture obliterated what should have been a triumphant moment for the nation: the President’s signing of the historic Dodd-Frank bill and the creation of a new bureau dedicated to consumer protection. As with all major legislation, a signing ceremony still occurred; but its significance was dwarfed by the tabloid effects of the Sherrod incident.

It took more than a year of federal deliberations to develop a bill that both the U.S. Senate and the House of Representatives could agree to support. From the outset, it seemed that the deep pockets of Wall Street bankers and their army of lobbyists would overwhelm a grassroots coalition of consumer groups, civil rights organizations, clergy, and unions in a modern day David and Goliath saga.

According to the Center for Responsive Politics, in 2009 alone, $465 million was spent by the financial industry on lobbying Washington. That expenditure translates into $1.4 million a day and includes 1,726 registered federal lobbyists paid to woo 100 U.S. Senators and 455 Members of Congress.

But in the end, little David’s people won – the everyday people who know what it means to be snookered financially – and gained a valuable governmental entity to fight predatory lending’s multiple forms.

Commenting on the new law, President Obama said, “The Wall Street reform bill represents the strongest consumer financial protections in history. You have a stake in it if you’ve ever been treated unfairly by a credit card company, misled by pages and pages of fine print or ended up paying fees and penalties you’ve never heard of before.”

Speaking on behalf of the Center for Responsible Lending, President Mike Calhoun said, “The current economic meltdown has been a nightmare for American families and a recurrence would be a disaster for our nation. The recently passed financial reform legislation puts in place key reforms that help create a brighter future, one in which our financial system flourishes. People will get loans they can afford to repay, and principles of fairness and value in financial products will trump easy money and self-enrichment.”

A few examples of the news protections are: Landmark consumer protection – An independent agency will be authorized to prevent the tricks and traps related to mortgages, payday loans and checking accounts. Credit cards and mortgages will offer terms in language easily understood; predatory lending will be prohibited; and banks will not be able to charge businesses hefty fees for debit-card purchases, among other consumer protections we expect the agency to put into place. Office of Minority and Women Inclusion – This new office will ensure equal employment opportunity and racial, ethnic and gender diversity. It will also work to increase the participation of minority-owned and women-owned businesses in the programs and contracts of each agency; and 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.

Mortgage reforms – Kickbacks for steering consumers into high rate loans when they qualify for lower rates will be banned. The legislation explicitly prohibits abusive loan fees and penalties for prepaying your loan early. And for the first time for all loans, lenders will no longer make loans that borrowers cannot repay.

Preventing taxpayer bailouts – Your hard-earned money will not be used to rescue companies that engaged in risky practices. With this legislation, one regulator will be in charge of watching for emerging threats to the nation’s entire financial system. It also gives government the authority to step in and safely shut down any failing financial firm.

Now would be an appropriate time to offer appreciation to all of the federal legislators who supported huge forward stride. If you need to know how your own legislators voted on this bill, the respective roll call votes are available on the Internet.

To review the House of Representatives June 30 vote, visit: http://clerk.house.gov/evs/2010/roll412.xml The results of the July 15 Senate vote are available at: http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm congress=111&session=2&vote=00206

Remember that it was a vigilant coalition of concern that refused to give up on reforming the myriad ills of abusive lending. In the months ahead, the focus will shift to implementation of the bill’s provisions. But for now, we have a great example of how ours really is a participatory democracy. This time, the people won!

Charlene Crowell is the Center for Responsible Lending’s communications manager for state policy and outreach and a finacial writer for the NNPA. She can be reached at: Charlene.crowell@responsiblelending.org

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