Released: June 25, 2010
Financial Reform spells a win for consumers
Contact: Contact: Ruth Susswein, Consumer Action (301) 718-2511 | Linda Sherry, Consumer Action (202) 544-3088
The U.S. House and Senate conference committee passed a final bill today that includes a bureau devoted exclusively to consumer financial protection.
“Consumer Action has long supported a consumer financial watchdog that has both the independence and authority to help prevent the spread of unfair and deceptive practices,” says Deputy Director, National Priorities Ruth Susswein.
The financial reform package that passed today creates a Consumer Financial Protection Bureau (CFPB) with an independent director, independent budget, and the ability to write and enforce rules for financial products. Rules will apply to credit cards, mortgages, payday loans, and private student loans.
Homeowners are more likely to get an affordable loan now that kickbacks for steering borrowers into high priced loans has been banned. Lenders will be required to retain a portion of the loans they sell which is intended to encourage responsible lending.
“Unemployed homeowners have not been forgotten in this reform package,” says Susswein. “Funding has been allotted for temporary bridge loans to help families avoid foreclosure.”
The bill allows states to pass stricter consumer protection laws if need be and allows state attorneys general to enforce CFPB rules on national banks.
It also will provide free credit scores to consumers who’ve been denied a loan.
“Unfortunately, most car dealers slipped through the cracks and will not be covered by the new financial protection bureau,” says Susswein. “But Congress did provide the Federal Trade Commission (FTC) with new powers to protect consumers from unsavory and deceptive auto loans.”
The bill must now be voted on by the full U.S. House and Senate before the President can sign it into law.