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consumer protection

Financial Regulatory Reform Passed by Conference Committee

US Capitol

Washington, DC- Early this morning, the Conference Committee passed the Financial Regulatory Reform Bill.  John Taylor, NCRC’s president and CEO, made this statement regarding its passing:

“NCRC is very pleased to see some major steps being taken to overhaul the banking system. The bill offers major consumer protections that did not exist prior to President Obama’s and Barney Frank’s call for reform. The creation of the Consumer Finance Protection Bureau (CFPB) as a independent agency should be able to create rules and regulations and protect consumers from future abuses. It is critical however that this independence not be undermined by the fact that the Federal Reserve Bank will house, pay for and be part of the oversight agency that has the authority to veto decisions of the CFPB. Only time will tell as to how much influence the banking regulators and others have over this new important agency.”

Major components of the bill include:

Consumer Agency:

  • A strong consumer agency was created to protect consumers and enforce regulations on mortgages, credit cards and other financial products.
  • Independent Funding.
  • Director appointed by the President and Confirmed by the Senate.
  • Enforcement of pay day lenders, and check cashiers.

Help for Homeowners:

  • Assistance to unemployed borrowers facing foreclosure.
  • Money provided for the neighborhood stabilization fund which helps with assistance to borrowers for foreclosed or abandoned properties.
  • Funds provided for counseling (Legal Aid).

 

Financial Reform Cannot Happen Without Removing Monetary Incentives

CONFERENCE WATCH:

NCRC Urges Committee Withstand Pressure to Remove Independent Appraisals, Sounds Concern on Rating Agencies’ Conflict of Interest But Praises Senate Vote on Homeowner Advocate in HAMP Program

Washington, DC (June 16, 2010) — Today John Taylor, CEO and President of the National Community Reinvestment Coalition, urged the conference committee to withstand pressure to remove independent appraisal requirements on mortgages in the financial reform bill and expressed disappointment with its failure to resolve the troubling conflict of interest between credit rating agencies and Wall Street. Taylor also urged inclusion of an Office of the Homeowner Advocate in HAMP to conduct loan modification appeals brought by homeowners and serve as a policy voice for homeowners.

Taylor said: “Financial reform cannot happen with removing the existing monetary incentives we have allowed the financial industry to build into financial products, including mortgages and the services rating agencies provide. We took a step backward yesterday by refusing to deal with the rating agencies’ conflict of interest. We cannot afford to take another step backwards by caving to pressure from the brokers and Realtors to remove independent appraisals on mortgages. Inflated valuations on homes helped blow the housing bubble bigger and bigger until it burst. To prevent another crisis, we need to remove the financial incentives to do more harm than good.”