Civil Rights Groups: New Financial Regulatory Agency Must Be Able to Protect Minority Consumers

Civil rights leaders recently testified in the House Committee on Financial Services about the role that the proposed Consumer Financial Protection Agency will play in protecting minority and low-income Americans.

The new agency would be tasked with prohibiting abusive, deceptive, and discriminatory lending practices.  Advocates hope that the agency will ensure that the consumer financial services market operates fairly and that traditionally underserved communities have access to mainstream financial services.

Hilary Shelton, Washington Bureau director of the National Association for the Advancement of Colored People, said in his testimony that the new agency could make it easier for the federal government to adequately monitor abusive practices.  “Current laws and enforcement allow a range of institutions to escape supervision because responsibility for consumer protection is fragmented across too many regulators. Too many finance companies are not regulated at all at the federal level,” Shelton said.

Janis Bowdler, deputy director of the National Council of La Raza’s wealth-building policy project, recommended that the new agency also be tasked with the responsibility of identifying trends that negatively impact minority communities and taking the necessary steps to prevent such behavior, as well as promoting financial counseling by trained professionals to families that are in need.

In order to eliminate opportunities for abuse, Michael Calhoun, president and CEO of the Center for Responsible Lending, recommended that the new agency have rulemaking authority over all consumer financial services providers and their products.  Calhoun also said that the new agency must be independent and have a strong, clear mandate to enforce its authority.

The House Finance Committee is currently considering legislation that will create the new agency.

Janis Bowdler, deputy director of the National Council of La Raza’s wealth-building policy project, recommended that the new agency also be tasked with the responsibility of identifying trends that negatively impact minority communities and taking the necessary steps to prevent such behavior, as well as promoting financial counseling by trained professionals to families that are in need.

In order to eliminate opportunities for abuse, Michael Calhoun, president and CEO of the Center for Responsible Lending, recommended that the new agency have rulemaking authority over all consumer financial services providers and their products.  Calhoun also said that the new agency must be independent and have a strong, clear mandate to enforce its authority.

The House Finance Committee is currently considering legislation that will create the new agency.