House to Vote on Financial Reform Legislation

UPDATE:  The House passed the financial reform legislation on December 11.

The House of Representatives is expected to vote this week on financial reform legislation that will address many of the practices and policies that contributed to the recent foreclosure crisis and the current recession.

A critical provision of the legislation will create a new federal agency, the Consumer Financial Protection Agency, which will be responsible for the enforcement of most financial consumer protection laws designed to curb abuse, deception, and discrimination. The new agency will have oversight over mortgages and many other consumer financial services and products, such as credit cards, checking and savings accounts, credit reports/scores, payday loans, residential leases, and wire transfers.

Currently, there are more than seven federal agencies tasked with oversight of financial services institutions, yet not one of them enforced laws to protect consumers and eliminate discrimination in lending practices that led to the mortgage and financial meltdowns and the recession.

The Leadership Conference has long been critical of the lack of federal regulation of the financial industry, given the impact predatory lending practices have had on minority and low-income communities.

“It should be clear to everyone by now that our current regulatory structure is incapable of standing up for consumers against the powerful financial services industry and its allies,” said Nancy Zirkin, executive vice president of The Leadership Conference.  “Consumers need to have an agency that looks after them.  Given sufficient resources and authority, that’s what the Consumer Financial Protection Agency will do.”

The Leadership Conference and its consumer rights allies in the Americans for Financial Reform coalition are committed to ensuring that the House passes the strongest possible bill to protect Americans from predatory and abusive lending practices.