Homeownership is a cornerstone of the American Dream. But in 2008, that dream turned into a nightmare for many Latinos when the housing bubble burst and the number of foreclosures skyrocketed, leaving thousands of Hispanic families without a place to live. With a full recovery a long way off, Latinos and other minority borrowers are still struggling to pick up the pieces after the economic collapse that absolutely decimated their already limited wealth. But amid devastation, there are real glimmers of hope and important victories that will offer victims much needed relief and assurance that at least a few champions in Washington are doing their best to protect homeowners from another devastating market collapse.
This week, homeowners across the nation join NCLR (National Council of La Raza) as we celebrate the one year anniversary of the opening of the Consumer Financial Protection Bureau (CFPB)--one of those champions stepping up for families. Established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the CFPB is primarily responsible for consumer protection, enforcing clear rules for financial companies that sell mortgages and other loans, and preventing abusive lending and collection practices. Already, the CFPB has created a number of crucial policies to protect homeowners, including:
- Requiring banks, mortgage lenders, credit card companies, and student and auto loan lenders to provide clearer explanations of their rates, terms, and fees
- Establishing a consumer complaint system with a searchable database so that consumers can report unfair financial practices and view complaints made by others
- Establishing additional mortgage and foreclosure protections so that military service members who have been deployed to new locations are protected
Recent polling conducted by Lake Research Partners--cosponsored by AARP, Center for Responsible Lending, Americans for Financial Reform, and NCLR--of likely national voters shows that Latinos overwhelmingly favor more accountability for Wall Street and stronger consumer protections. With good reason: the Hispanic community has been disproportionally impacted by the predatory lending practices. For Latinos and other communities of color, financial institutions have historically and presently steered our communities to toxic mortgages, buy here pay here dealerships and payday advance companies, to name a few. Costly credit, particularly predatory mortgage lending, has had shattering effects on the whole economy but disproportionally devastated Latino neighborhoods, depleting Latino families' limited wealth, employment opportunities, and the pathways to economic security.
Without a doubt, more needs to be done to protect all borrowers from predatory lending and steering. Financial companies on Wall Street must be held accountable with tougher rules and enforcement to prevent the practices that caused the financial crisis. In spite of attempts by some financial institutions and members of Congress to weaken the power of this agency, the CFPB remains strong under the leadership of Richard Cordray. NCLR is encouraged by their work and looks forward to continued efforts working together to protect and assist the creation of a fair lending system for all Americans. Wall Street wrote its own rules for far too long. Now, with the CFPB in charge, we finally have an ally willing to watch out for regular Americans.
This was first published on the NCLR Blog.