Coalition EffortsConsumer Action is working on these important issues along with other organizations. If you would like to know more about these issues, please see "More Information" at the end of each article.
Preventing FinTech from avoiding regulation and preying on consumers
In a letter to the Office of the Comptroller of the Currency, Consumer Action joined consumer, civil rights, small business, and other community organizations to express strong opposition to new federal nonbank lending charters that would enable financial technology companies (also known as “fintech”) to avoid state consumer protection laws and state oversight, putting consumers and small businesses at risk.
ED’s complaint database a useful tool for students, but improvements could be made
President Obama’s Student Aid Bill of Rights directed the Education Department to implement an efficient and responsive complaint system to increase both accountability and transparency in higher education. Launched to the public last summer, the database serves as a useful tool for students and whistleblowers that holds colleges, loan servicers and collectors accountable, and prevents waste, fraud, and abuse of taxpayer dollars. However, advocates are pushing for system improvements to be made before the end of the year. These changes include making complaints public; seamlessly coordinating government agencies that manage complaint databases; and holding contractors accountable when the complainant is not satisfied with the resolution.
Stand up for low-income students by protecting Pell Grant funds
Consumer Action joined a group of 33 higher education groups and civil rights organizations in calling on Congress to restore year-round Pell Grants, increase the maximum Pell award amount and extend inflation adjustments. Millions of low-income students can receive up to $5,815 annually in Pell funding and advocates argue the money is vital in making higher education affordable and preventing students from being forced to take out pricey loans to pay for their degrees. In 2011 the Obama administration reached a bipartisan agreement to cut year-round Pell grants in response to funding shortfalls. However, advocates argue that the current Pell surplus provides a unique opportunity to reinvest in the program.
Green loans may cause homeowners to see red
PACE (Property Assessed Clean Energy) loans are a special kind of financing sponsored by local governments and used to pay for energy-efficiency improvements, such as solar panels, energy-efficient appliances and windows. The Department of Energy (DOE) provides best practice guidelines for homeowners, but these guidelines don’t adequately educate property owners of the loans’ drawbacks. In a letter to the DOE, Consumer Action joined advocates in urging the agency to better alert consumers of the serious risks associated with taking out the seemingly appealing loans.
More can be done to protect immigrant victims of Wells Fargo’s fraud
Consumer Action joined consumer and civil rights groups in pressuring credit bureaus to give immigrant victims of the Wells Fargo fake account scandal free copies of credit reports in their native languages so they can dispute any fraudulent accounts. In a coalition letter to Experian, TransUnion, Equifax, Early Warning Services and FIS, advocates asked that the reports be made available, at a minimum, in Spanish, Chinese, Vietnamese, Korean, Tagalog, Russian, Arabic and Haitian Creole.
Desperate students need protection from debt “relief” scams
Advocates called on the White House to crackdown on private companies that charge fees for student debt assistance, loan discharge forgiveness and consolidation services that are otherwise free. Often, the scams are passing off the federal government’s income-based repayment programs as their own and billing borrowers for it. These companies, known for preying on desperate student borrowers, must be closely monitored and shut down to protect borrowers and prevent them from paying for unnecessary services, adding to their mounting financial problems.
Monitoring availability and affordability of auto insurance requires key data
Consumer advocates have long argued that low-income drivers are price-gouged when it comes to car insurance quotes. In response, the Federal Insurance Office (FIO) set a standard that recognizes auto insurance as “unaffordable” when the average premium in a community exceeds two percent of the community's median household income. The FIO is also preparing to publish its first report on auto insurance affordability with help from the insurance industry. Advocates are urging the FIO to require mandatory participation from some of the biggest insurance companies, instead of relying on the companies’ voluntary submission of data. The group also asks the office to evaluate premiums at the zip code level to ensure the affordability analysis accurately represents the cost of insurance around the nation.
Consumers have a right to their day in court
Forced arbitration clauses are agreements that large corporations often hide in the fine print of contracts that Americans sign every day. These clauses have big consequences: By restricting access to the court system, these clauses prevent consumers who have been wronged from seeking meaningful legal recourse. The Consumer Financial Protection Bureau has proposed a new rule that will prohibit financial services companies and big businesses from including provisions in their fine-print agreements that prevent class-action lawsuits. It's a good start toward unraveling the growing stranglehold that forced arbitration has on consumer rights.
Solar panel loans cast shadow on low-income families
The U.S. Department of Energy (DOE) recently drafted a list of nonbinding best practices for states and localities that adopt property assessed clean energy (PACE) programs. However, the guidelines don't adequately protect consumers, and PACE loans should be subject to the same rigorous federal disclosure and consumer protections as mortgages. In a letter to the DOE, advocates argue that the loans will put lower-income borrowers at a greater default and foreclosure risk. PACE loans tend to carry significantly higher interest rates than second mortgages and are structure as assessments that can cause issues.
A need for racial justice in student lending
For nearly a decade the Department of Education has failed to take sufficient steps to ameliorate the disproportionately negative impact on student-borrowers of color, or even to conduct further research to discover the causes or the extent of disparities. In a letter to the Secretary of Education, John B. King, advocates urged the Department to leverage its tremendous resources and ensure that student loan policies work for all borrowers.