Senator Roland W. Burris Touts Major Benefits of Financial Reform Bill for Minority Consumers
As the United States Senate continues to debate financial regulatory reform, U.S. Senator Roland W. Burris highlighted the disproportionate effects that the financial crisis has had on African American and minority families across the country.
At the height of the subprime lending boom, more than 54% of loans sold to African American borrowers to purchase homes, and more than 49% of refinancing by African Americans were higher priced loans. Borrowers who were sold subprime loans have suffered severe economic strain during the financial crisis and are at great risk of foreclosure. Subsequently, homeownership by African Americans has been on the decline.
The financial reform bill now under consideration, would directly address this inequity through the creation of a Consumer Financial Protection Bureau (CFPB) to police the behavior of financial institutions and enforce stringent consumer protections rules. The CFPB will have the authority to act a watchdog over all mortgage-related businesses such as lenders, servicers, mortgage brokers, and foreclosure scam operators. The CFPB will also be able to require brokers to implement the steps needed to offer minority borrowers loans they can afford and manage.
The implementation of a CFPB will also make the student loan process for minorities easier and more transparent. Minority students often need to take out student loans to cover the costs of higher education, including attendance to historically black colleges and universities. The CFPB will require student loan lenders to treat students fairly and provide them with all the information they need to make informed and smart decisions regarding their loans. The CFPB will also require that the Treasury Secretary, in consultation with the Bureau Director, designate a Private Education Loan Ombudsman to provide timely assistance to borrowers of private education loans, and to disseminate information regarding the availability and functions of the Ombudsman to borrowers, potential borrowers, and related institutions
"While millions of Americans have suffered as a result of the reckless behavior on Wall Street, few groups have been hit harder than minority populations," said Senator Burris. "Eliminating financial disparities in our economic system through commonsense reform is an important step toward restoring sanity to our financial system. A Consumer Financial Protection Bureau will act as a watchdog on behalf of the American people and provide the oversight required to end the unscrupulous practices of Wall Street that created this economic mess."
Overall, the Consumer Financial Protection Bureau will write consumer protection rules for all entities that offer financial services or products, and has the ability to enforce regulations on banks with $10 billion in assets.