Washington, DC—Minority communities will have a fair chance at financial stability thanks to the bold efforts of the members of the U.S. House of Representatives Financial Services Committee, the Congressional Black Caucus, and the Congressional Hispanic Caucus to secure the creation of a Consumer Financial Protection Agency (CFPA). NCLR applauds Chairman Barney Frank (D–MA), Representative Luis Gutierrez (D–IL), and Representative Maxine Waters (D–CA) in particular, as well as the Obama administration, for their leadership and dedication on this issue.
A weak banking oversight system has left Blacks and Latinos vulnerable to deceptive and risky financial products. Minorities have fared worse than Whites in this harsh economic climate with disproportionately low levels of income, wealth, and homeownership. Latinos are 30% more likely to receive high-cost mortgages, nearly twice as likely as White families to have credit card rates over 20%, and are more likely to pay more for auto loans.
“Until now, the banks have had lawyers and lobbyists to protect them while consumers had no one,” said NCLR President and CEO Janet Murguía. “This new agency will allow families of color to achieve financial security by prohibiting unscrupulous industry players from deceiving hardworking families and steering them into unstable loans.”
When fully implemented, the agency will reign in deceptive practices among credit card providers, payday lenders, mortgage brokers, and others, creating a level playing field for all consumers. CFPA will also expand the availability of financial counseling that will truly empower families to make sound financial decisions. The agency will be able to move quickly to keep pace with an ever-changing market and safeguard the ability of states to protect their residents.
“NCLR is disappointed that some were able to carve out major loopholes for themselves, especially in the case of auto dealers,” said Murguía. “We look forward to working with the Senate to further strengthen the CFPA.”