Banking and Credit

Banking and Credit

Since the Great Depression, Congress has passed a series of laws to preserve stability in the banking and credit industries, protect consumers from unfair and deceptive practices and make affordable credit available to middle class and low-income families and small businesses.  Beginning in the 1980s, the deregulation of financial institutions has fed speculative booms and devastating busts. Privatization of low-cost government credit for student loans and mortgages and weaker consumer protections has driven up the cost of credit and put consumers at risk.

Commentary

Information is power… and that’s the problem

May 02, 2012

Why #OccupyWallStreet?

October 07, 2011

The Truth in Lending Act, 1968: Don't Confuse People With Information

May 18, 2011
Debt burden

Credit Card Sharks Crying Wolf

May 20, 2009

Cry Wolf Quotes

“As an industry leader, Chase does not engage in several practices -- universal default, two-cycle billing and increasing a rate based on a change in a credit score -- addressed by the bill, but we believe the legislation as passed today has the potential of increasing overall costs to consumers, reducing access to credit, and reducing or eliminating low-rate options for consumers.”

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Stephanie Jacobson, first vice president of public affairs for Chase Card Services. CreditCards.com.

Any review of the history of the affordable mortgage movement in America demonstrates the power that CRA had in helping to shred mortgage underwriting standards throughout the industry and exposing us to the kind of market meltdown we've experienced. “If form follows, soon banks and other financial institutions operating under CRA will be cudgeled into lending to small businesses based on race and gender, which will be the opening of a new round of lower lending standards in the very risky small-business sector. The effort to save and extend CRA in the face of its role in the mortgage market's massive meltdown is testament to the unique power of this legislation to nourish an entire industry of nonprofits that, like Acorn, have been reliable supporters of politicians such as Barney Frank, Maxine Waters and a former community organizer and associate of Acorn by the name of Barack Obama.

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Steven Malanga, Investor’s Business Daily,

There are also subsidies to certain types of mortgages. The Community Reinvestment Act bans so-called ‘red lining’ -- requiring banks to offer mortgages in the entire geographic area in which they operate, not just to do business in suburbs. Loans in profitable areas were then used to subsidize loans in areas where banks were losing money.

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John Lott Jr., Fox News

It is simply wrong-headed policy…[Federal and state banking regulations] require or aggressively nudge banks into subsidizing parts of the community [The proposals] would only aggravate the problem.

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Lawrence J. White, a professor of economics at New York University's Stern School of Business, New York Times.

Evidence

Backgrounders & Briefs

A Timeline of the CARD Act

An interactive timeline of credit card reform.

Resources

The National Community Reinvestment Coalition works against unfair lending and banking practices, particularly those targeted towards low and middle income families.