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

ABA is very concerned about the direction this legislation is headed and we are concerned over the impact it will have on the ability of consumers, students and small businesses to get credit cards.

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Ken Clayton, senior vice president of card policy at the American Bankers Association, Washington Post.

There’s little doubt that the rating agencies helped inflate the housing bubble. But when we round up all the culprits, we shouldn’t ignore the regulators and affordable-housing advocates who pushed lenders to make loans in low-income neighborhoods for reasons other than the only one that makes sense: likely repayment… in 1995 the Clinton administration added tough new regulations. The federal government required banks that wanted 'outstanding' ratings under the act to demonstrate, numerically, that they were lending both in poor neighborhoods and to lower-income households. Banks were now being judged not on how their loans performed but on how many such loans they made. This undermined the regulatory emphasis on safety and soundness.

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Howard Husock, New York Times.

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,

Because the Community Reinvestment Act is really kind of a Cloward and Piven kind of scheme that really led to all of the things that, well, we're now having to bail banks out for.

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Glenn Beck, Fox News.

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.